Tuesday 14 August 2012

EDF Is Toying With Us

Here’s some more fun and games – expensive, too, and if EDF wins we'll be paying for it. 

The story so far: EDF is dangling in front of HMG the prospect of developing one of the ten new nukes it wants. It used to be 4 that EDF promised, but let that pass because HMG will be grovellingly, pathetically grateful for one. Ah, say EDF, but first you must cross our palms with a very high guaranteed electricity price. 

How high ? Well of course they propose to torture HMG in a smoke-filled room until they yield whatever EDF decides is enough, so we won’t know until they all emerge blinking into the sunshine waving a contract. But people are prone to doing their own maths and, based on EDF’s lamentable recent attempt to build one such new nuke in La France elle-même, (no start-up date in sight, at least 4 years late and massively over budget, EDF at war with nuke contractor Areva), various estimates have been derived, in the range £150-165 / MWh.

Quelle horreur, this is three times the current price (geddit?) of wholesale electricity. Can it really only be four years ago EDF told us it would be £45 ? This weekend, the wily frog has granted an interview to the lovely Emily Gosden, one of a production-line of DTel fruity-girl energy correspondents. In this, M.de Rivaz, for c’est lui, has let slip (well, planted, of course) the notion that he might just squeeze us in at less than recent estimates of the cost of offshore wind (another unaffordable technology), say, £140. 

As I’ve surmised before, we are presumably being softened up for £119.95, indexed-linked of course, to commence production in, oooh, 2020? (no guarantees, of course) which will be proclaimed a miracle. This, ladies and gentlemen, is no bargain. If it’s security of supply we want, it can be had a great deal cheaper – and earlier - than that. 



Anonymous said...

We should tell EDF to sling their hook and get on with building more CCGT generation running on fracked gas!

Cheap, reliable and "ours".. :-)


Anonymous said...

Perhaps we could recreate the Central Electricity Generating Board and announce that the next 50bn of QE is headed in their direction.

Budgie said...

I really am a sucker for this.

We all know that HMG are useless at negotiating - that they regularly snatch defeat from the jaws of victory, eg the truly bad deal we got from the EU - so it is not surprising that EDF is trying it on too.

However. However, we do need a mix of generating capacity because no one can predict tomorrow, let alone in 20 years time. So for strategic reasons we need (some) Nuclear in a mix.

Wind is out because it costs as much as Gas and Coal, but needs Gas as back up in addition, doubling costs (our MPs haven't cottoned on yet to the fact that the wind is intermittent).

It may amuse you to slag off Nuclear, ND ("What, little ol' me? I wuz just 'avin a pop at EDF, 'onest") and rwendland too, but bear in mind that we will waste far more tax money on the CAGW scam in its delusional entirety, than ever we will on Nuclear even at EDF's inflated expectations.

Nick Drew said...

The thing is, Budgie, just how much are you prepared to pay for 'some nuclear in the mix' ? twice today's price ? 3x ? 4x ?

Before the introduction of competition in the gas industry British Gas used to whine - why are you giving us competition? - we're safe and reliable!

to which the reply was - OK, but you are over-priced and we have the right to insist you are cost-effective, too

it is a fact that the utterly useless solar PV gets more subsidy per unit capacity in the UK than new nukes will - but there isn't much of it

nuke is large-scale, it's serious - and what's on offer (by people whose story changes every time they open their mouths) is this year, next year, sometime, ... to gratify some foreign (French or Chinese) nuke industry !

I well understand the diversification case, but EDF is just an embarrassment

Nick Drew said...

anon2 - please not the CEGB! British Gas on steroids

anon1 / pogo - yes, and why not latest-technology coal ? They are still building new coal plants - lots of 'em - in Germany, that supposed paragon of green energy policy

ivan said...

Maybe HMG should ask China how they are getting along with the thorium reactors based on the UK design and then use that as a bargaining chip with EDF. But then we all know budgie is right regarding HMG negotiating powers.

Sebastian Weetabix said...

The CEGB wasn't all bad. It was run by engineers with some modicum of sense and they were at least animated by a desire to make sure the lights stayed on, unlike these Green maniacs. But if only they could have been persuaded to make 10 reactors of the same design rather than make every single one different...

Anonymous said...

HMG, should tell EDF to go swivel [on their middle finger].
At the same time, we should tell the EU to do the same thing.

We have coal, gas and oil aplenty under our feet for God's sake, Thorium already mentioned should be the: 'new' nuclear option.

Budgie said...

ND, why are you using the argument that foreign generators are not providing us with the power we need at the price we want?

That is my point. Jonny Foreigner does not owe us a living, or even lights. This is what comes from your policy of allowing Mr Foreigner to buy up most of our essential services.

When only you, or we in the UK, believe in free trade, and all the Mr Foreigners don't, it is us that gets stuffed.

rwendland said...

Note how EDF PR is now trying to frame the debate comparing nuclear costs with that of offshore, rather than onshore wind, to try to push the message "slightly cheaper than **offshore** wind". The EDF "bargain price" of £119.95/MWh (12p/KWh) you postulate is about 37% higher than current onshore wind costs. (E.ON offer the estimate "between £80/MWh and £95/MWh", with midpoint £87.50/MWh; similar to other current estimates.)

And by 2020, before EDF have new nuclear built, most in the industry think offshore wind costs will have fallen to £100/MWh or less, under that the EDF bargain nuclear price. The Crown Estate have carried out much research, and estimate 2020 offshore wind prices at around £95/MWh.

So whichever way you look at it, EDF's new nuclear leccy will cost even more than wind. The one good thing about CfD, is that it will be impossible for the nuclear industry to hide this fact, as the CfD contract prices of all generation types will I think be public.

(And to pre-empt Budgie's comment that wind needs 100% backup (it doesn't - National Grid doesn't think balancing (backup) will cost much. (We have masses of 90s era dash-for-gas CCGT plant near EOL that can switch to backup rather than be scrapped.)

rwendland said...

SW, re CEGB nuclear. They did intend Sizewell B to be the first of a run of 4 identical PWRs - as I recall with sisters Hinkley C, Wylfa B and Sizewell C. But privatisation intervened, which took away cheap govt finance, which made the economics really dreadful.

Even with cheap govt finance, Sizewell B leccy worked out at 8p/KWh, when baseload costs were about around 2.5p/KWh. If you excluded first of kind costs, Sizewll B leccy was still 6p/KWh.

Interesting Sizewell B leccy expensiveness ratio against baseload is very similar to today. 6/2.5 = 2.4 for Sizewell B, and now the Hinkley C EPR ratio looks like it will be about 11.95/5.1 = 2.34. Nothing much has changed with nuclear economics over the last 20 years, and the 2000s claimed "nuclear renaissance" has been proved to have been a huge PR stunt!

Budgie said...

12th August 2012, Richard North (http://www.eureferendum.com/) said: "at one point last week, Britain’s 3,500 [Wind] turbines were contributing 12 megawatts (MW) to the 38,000MW of electricity we were using. (The Neta website, which carries official electricity statistics, registered this as "0.0 percent")". Seems like 100% back up needed some of the time then.

And if the back up is already existing (as rwendland claims) then we don't need to build the windmills in the first place.

Pogo said...


The National Grid paper HC517 (WIND56) seems a tad confused, apart from stating "In the North East US, we provide power directly to millions of customers." which seems rather strange as I thought it operated in the UK. :-)

It's also somewhat inconsistent with its balancing costs, suggesting at 2.6 that it's "no more than a few pence a year on a typical bill" and then at 2.8 that it "makes up around 1% of a consumers bill" - so either the average consumer's bill is less than about 30 quid, or that they haven't done their sums properly - my electricity bill is in excess of a thousand pounds per annum, so I'm contributing a couple of orders of magnitude more than "a few pence".

To pick up on your suggested use of old CCGT systems for backup... (a) they're at EOL because they're clapped-out, thus unreliable and inefficient, and more to the point, (b) you don't use CCGT as backup because it's not capable of responding quickly whilst maintaining its efficiency advantage over OCGT - the heat exchangers that produce the steam to drive the secondary generators can't keep up and hence CCGT operates effectively as OCGT, if anything slightly less efficiently due to back-pressure and other constrictions.

And finally, as "Budgie" says - "if the back up is already existing then we don't need to build the windmills in the first place"

There's an interesting paper at HC217 (EIND59) http://www.publications.parliament.uk/pa/cm201213/cmselect/cmenergy/writev/517/m59.htm written by a consulting engineer that reckons that having to provide OCGT backup in combination with functioning wind turbines causes more CO2 production than generating the same amount of electricity by CCGT alone.