Later this week, we're told, the long-trailed announcement will be made of a new approach to financing nuclear power plants in the UK.
As we've long been warmed up to accept, no company is willing to take upon itself nuclear construction risk. That was just about all that remained in the lap of developers, after EDF had blazed the trail with the outrageous Hinkley Point C contract that May so cravenly signed back in 2016 under stern instruction of the miserable tadpole Hollande (thereby proving to the entire watching world she was unfit to conduct the Brexit process). But EDF itself quickly signalled that if we wanted any more nukes the next deal would need to be even better.
(Note always that HPC is a not-quite-free option for EDF - they still have no obligation to complete construction of the plant. It can be argued they have no idea how to do it anyway, seeing that Flammanville has been put back yet another few years ...)
Still, the frogs are dangling the next one, Sizewell C, before the desperate eyes of HMG - and of course the Chinese and Japs and Koreans can all make their own offerings - if the contract is rich enough, and free of risk for themselves.
The chosen financing model to gratify their rapacity is the Regulated Asset Base model. Details are awaited; but it's a familar enough tool, used across the USA in various forms for decades, and latterly for that grotesque and unnecessary project, the Thames Tideway. But familarity alone is no recommendation.
The lazy headlines are that the 'taxpayer' stands to pick up the tab for the inevitable monstrous cost overruns. Maybe; but it's even more likely it will be the poor old electricity bill-payer, which may seem a fine distinction but it highlights an important point. Everyone needs electricity (and water) and their utility value to all of us is so great, we can be made to pay almost anything for them. No new taxes required. By these means we can be, have been, and will again be screwed into the ground, giving foreign firms the right to enjoy themselves on a grand scale at our expense for many decades to come.
The only possible argument in favour is that nukes have only ever been built by public finance, so we may as well don the nose-pegs and get on with it. That assumes we need them at all - and I say we don't. Or, if we do, we're f****d, because manifestly the French don't know how to build them within, say, 10 years of their airy estimates - so we'll always need large-scale Plans B, C and D. Why not just settle for a good, cost-effective Plan B and have done?
Anyhow, knowing that several of our BTL regulars actually favour new nukes - have at it in the comments!
ND
24 comments:
Technology always marches faster than governments and state-owned companies can handle. By the time the new mega plants come online, we'll all have solar panels, wind turbines and large capacity batteries installed at home.
Well, those who can afford to own their own home might.
Everyone needs electricity (and water) and their utility value to all of us is so great, we can be made to pay almost anything for them. No new taxes required. By these means we can be, have been, and will again be screwed into the ground, giving foreign firms the right to enjoy themselves on a grand scale at our expense for many decades to come.
Struck by this comment. When generation was under the control of (the engineers at) the CEGB, we were told that it was inefficient and outdated. Now that the control has been passed onto quasi-governmental foreign organisations, is this supposed to be better.
At least the engineers knew what they were doing even if they put in a 20% safety/cost margin.
Anon - if it had only been 20% ...
But it wasn't. I can tell you (from bitter experience) in detail of instances of triple and even quadruple redundancy being built by these engineers.
They love building things! It's what they do! To every problem, their solution was Build More Stuff. It was truly grotesque.
The problem of what's the optimum level of redundancy / self-sufficiency / safety etc it a subtle one, as old as the Dutch and the height of their dykes, with no single 'correct answer' (though there are some sound mathematical and risk-management principles to deploy).
but monopolies with power over prices always go insanely OTT
old problem of risk assessment being carried out by folk with no skin in the game.
The Environment Agency are one of the worst. They've decided that London's flood protection should be increased from a 1 in 100 year event to 1 in 1,000 year event. This means if you're developing anything new on the waterfront you not only have to pay for raising the river wall but for burying huge concrete storage pipes deep in the ground to hold rainwater until the next low tide.
Of course the developers who have to pay, to maintain their margins on (mostly)new build housing, then claim justification for having to reduce / eliminate social / shared ownership housing.
What's missing is the EA having to explain to disappointed low income folk denied affordable housing that their pain is worth it, saving someone in 850 years time from having a wet sofa.
Agree - never trust technocrats not under direct democratic control.
OT but maybe of interest - Peter Thiel - a sort of Dominic Cummings with a lot more money - on tech.
https://medium.com/@bonniekavoussi/notes-from-peter-thiels-speech-at-the-national-conservatism-conference-on-july-14-2019-6a51b26b202
This is a political economy question. A General Motors executive once said, “What’s good for GM is good for America.” This wasn’t exactly true, but now money-centered banks are negatively correlated with the U.S. when it comes to trade. When money flowed from abroad into the U.S., these banks invested in subprime real estate, and this caused the 2008 financial crisis. Every time the current account deficit goes down, we have a banking crisis...
The current account deficit should go from 3% to 0%. We should have a controlled crash landing for the banks for when we fix our trade deficit and current account deficit. Anyone on Wall Street will fight tooth and nail against sensible trade, and we need to keep them away from the negotiating table...
We’ve had this doctrine of American exceptionalism, but instead we are now exceptional in bad ways: We are exceptionally overweight, we are exceptionally addicted to opioids, it is exceptionally expensive to build infrastructure here, we are exceptionally un-self-aware, and we are exceptionally un-self-critical.
Nationalism is not my country, right or wrong. It is: How does my country compare to other countries? Nationalism is going to be extremely critical, not unreflective.
Generally
... surely we need more base-load nukes to power the electric cars that will take over from petrol in 2030 (or was that 2025)
However,
Sitting in Bristol, in an office, I look out and see every office block in sight has single-glazed metal framed windows as well as the one I sit in.
I would prefer the govt helped people to use less electricity to begin with rather than fund an arm of the french state.
how about
- insulating all the houses and mandate double glazing
- providing good public transport so they do not want to drive
- localising generation with consumption
Lovely. The aircon just kicked in.
Quiet too, we have extinction rebellion blocking bristol bridge.
Anyone else think the Extinction Rebellion lark is just a way to skive real commitments and bring the festival mentality to the streets? Someone disgruntled with paying for glasto tickets and thought they'd make there own version...?
If any of you have not read "Sustainable Energy Without The Hot Air" Abbreviated to SEWTHA - I thoroughly recommend it and consider it essential reading to argue cogently about the UK's Energy mix, global warming or any pet project you think is going to be the magic answer. (the PDF version is available free here: http://www.inference.org.uk/sustainable/book/tex/sewtha.pdf) I must confess that it's been a while since I've read it in full - cover to cover, but here goes.
Nuclear (fission) should be considered at a global level first - can electricity from nuke reactors be produced in sufficient quantities across the globe to account for the worlds energy requirements?
Before you consider the herculean task of building and running reactors safely in the most deprived and unsophisticated parts of the world - there is the question of "is there enough fissionable material on earth to fuel these reactors?" SEWTHA argues that to make nuclear power really "sustainable" a long lasting source of uranium is required - the answer to the source is by extracting it from the sea, technology which is unrefined. However if it can be extracted from the sea - there is potentially enough uranium on the earth to provide every person on earth (6 billion at time of writing) with 420 kWh/day/person for 1000 years. That would more than satisfy everyone's energy needs.
(The sustainability definition through out the book: will the source of the energy last a 1000 years with out running out or affecting the climate?)
So from a macro context - yes, nuclear is great. Provided that there are enough of them built across the world, sufficient protocols, standards etc are put in place to make them safe to run in Nigeria, Iran, Venezuela, Indonesia et al. (said with a straight face....) they are technically the answer.
Now from a micro context - just looking at the UK context we've been properly shafted on the MWh strike price (ND i'm sure you know better than I) it's £90/MWh about double compared to a gas or coal plant (even with the artificial and economically damaging carbon floor price added to the cost of a MWh coming from a fossil fuel source). So financially it doesn't make sense.
Then there is the question of liability - there isn't a chance in hell that any foreign company or government can truly be held accountable for a nuclear disaster in the UK. Furthermore most of the nuclear intellectual horsepower now seems to reside abroad so any problems equals an import of expertise presumably at distress purchase prices.
Then there is local opposition and NIMBY-ism only going to get better for the atomic industry after the HBO series Chernobyl.
to sum up: Nuclear? Yes. But it has to be a global effort - otherwise the reality is that we are expensively pissing in the wind.
Andrew - agree 100% that efficiency / insulation etc should be massively pursued. (a) Often genuine market failure there**; (b) often way to the left of the MAC curve; and (c) creates local jobs, not French jobs
Not so sure about distributed generation, though. It's coming anyway, but (a) some things are more efficient / flexible done centrally (and that is not an excuse for CEGB mentality, see earlier comment); and (b) as a key example of this, there are problems of backup etc which get ever more acute if the grid withers and falls away. Also see batteries below
GridBot - good comment. Yes, the world sorely misses David MacKay, the greatest loss imaginable in this sphere.
And yes, £90 (BTW it's £100 now, with indexation) is an outrage. I'm not at all convinced we'll need as much baseload as that, going forward, and certainly not at that price. The cost and macro-feasibility of providing backup is improving rapidly, and I'm much more optimistic about that than I was, say, 3 years ago. There are some very clever battery-based techniques++ under development (long way to go, mind, but it's moving rapidly and favourably). And (e.g.) there's no way EVs will all be charged at 6pm each day! It will be cleverly optimised through the night. And eventually, EV batteries will be capable of 2-way flow. (Tesla refuses to do this at present.)
In other words, offshore wind starts to look very attractive indeed: Physically dispersed [though not really a major source of diversification]; a UK speciality; costs looking good; no nuke-type safety issues; no bloody protesters.
Final word on nukes: SMNRs look good on paper on a number of these counts. But the politics will kill it: as written about here before, they need to be sited close to big towns ...
** 'market failure' is often bandied around, but usually it means "the market doesn't support my crazy idea, for *ahem* very good reasons"
++ BTW, there are potentially horrific battery problems looming because much of the dirty-chemicals aspects are carried out by child labour in countries that don't care, and there will be some big lawsuits winging in unless this changes pretty soon
@ND: triple redundancy is an absolute must in safety critical engineering such aerospace and power grids. Slightly off topic but one of the (many!] reasons Boeing is in the shit is because the bean counters refused to allow triple redundancy in the Angle of Attack sensors that feed into the MCAS.
The thing about engineering is when we get it wrong people die. PPE essay writers don’t seem to grasp that.
If we are to have “zero carbon” (it’s all bollocks on stilts, but anyway, just for fun) and electric cars then we are going to need a dozen more nukes. But why an old sizewell design? Why not modular reactors to the RR design used in subs?
SW - maybe, but not quadruple for gasflow metering!
Modular? Like I said above - fine, but as I suggested above, you nominate the 50 cities that will need to have at least one each on their doorsteps, and see what happens.
As written about here before, actually those 50+ sites have already been identified, but they are Secret. I think we know why.
"there are potentially horrific battery problems looming"
including internal short circuits burning down houses. Lot of power in a home battery.
Yep, seen the after effects of a battery string on a large UPS when it vaporised a spanner. Room was black with smoke. Sparky lucky to survive without serious injury.
Whatever the prospects of SMNRs internationally (I'm doubtful for the next 20-30 years), the Rolls-Royce version is not at all small (~500 MWe), and as far as I can see is mainly subsidy bait. The Guardian seems to have summarised it well:
https://www.theguardian.com/environment/2018/sep/30/energy-firms-demand-billions-from-uk-taxpayer-for-mini-reactors
"Energy firms demand billions from UK taxpayer for mini reactors"
Some of the detail is in the "Market framework for financing small nuclear" report by Her Majesty’s Government's "Expert Finance Working Group on Small Nuclear Reactors"?
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/732220/DBEIS_11_-_Market_Framework_for_Financing_Small_Nuclear_EFWG_Final_Report_.pdf
"there remains a market failure in getting technologies and projects to commercial delivery" (ie no one sensible whats to finance our R&D project)
"[our job is to] explore a range of potential financial models ... that HMG could establish to give confidence to the market"
NB Any chance you could try explaining what the promised Regulated Asset Base model actually is in a few succinct paras ND? As far as I can see, it effectively creates something like bonds, a guaranteed income stream (from us, the future electricity consumer) that the nuke builders can flog off to raise capital cheaply. But how do the risks fall?
If we end up with an abandoned half-built reactor (over cost, some technical failure, or U turn from some future accident a la Japan), who ends up paying? Seems to me it will be the future electricity consumer, for at least the portion of CAPEX deemed to have entered the RAB, which will be the vast majority by the time it is acknowledged as cancelled. By this time the builders and suppliers will have booked a lot of profits.
Either we go for nuclear or we drop the carbon bullshit. Renewables will not work.
But what do I know? I’m just an engineer. I didn’t do PPE.
The distinction between old school generation and the brave new world of RAB finance is that engineers make things work. They may have triple redundancy which is simply a method of coping with probability of events. (You could reduce redundancy and pay out for personal injury like Boeing)
Turn the whole thing over to finance types and you get value transferred from the asset (by way of overengineering) to the financier (by way of subsidy).
As I pass one of the nuclear fleet that has my company's stuff in it, I'm pleased we took the time and effort in overspecing it. It's what engineers do.
RW - try explaining what the promised Regulated Asset Base model actually is in a few succinct paras?
will have a go after (/if) we see details: because there are several variants. I've had dealings with it in the US, and never liked it. (From the consumers' perspective, that is!) In the meantime you could do worse than read what Helm said last year:
http://www.dieterhelm.co.uk/assets/secure/documents/The-Nuclear-RAB-Model-12.06.18.pdf
SW - nor me. You'll think I'm being sarcastic or patronising here, but I'm not.
I've worked with engineers all my commercial life, incl. a fair share of brilliant ones. I always say to them: you're actually better than you know. Because it's always "sorry, it can't be done - laws of physics, y'know**" until push comes to shove and then, Lo! It can be done. I could give examples from here to the end of the page.
________
** or, if really up against it, "elf'n'safety, y'know"
ND
On "Sustainable Energy Without The Hot Air"
I have hopes for liquid air batteries and wind / solar as a distributed solution.
yes, it is not as cheap as nuke baseload (This technology reaches a new benchmark for a levelized cost of storage (LCOS) of $140/MWh for a 10-hour, 200 MW/2 GWh)
Disclaimer: I am long
but if it fails and you live nearby, you might feel a bit cold rather than a bit glowy.
Also Long LMT and am patiently waiting for the "fusion power in a standard container" that was touted about 5 years ago.
OT - anyone else been watching the Apollo 11 stuff and wondering where our future went?
"It was great to see the footage from the space age but also depressing to know that that world is gone for good and the future it promised will never be. By the end of it I felt like Charlton Heston in the original Planet of the Apes, when he sees the wreckage of the Statue of Liberty."
https://practicallyserious.files.wordpress.com/2014/07/liberty3.jpg
Just nearly killed myself.
I've been repairing an electric shower and cut through a high power cable with a pair of croppers. Luckily it was rubber handled. I'd tripped the wrong MCB. Eye sight ain't wot it used to be.
*BANG !* A bloody great flash and dirty great black burn mark in the corner of the room where the pull switch is.
I told mum. Her response was not "Don't touch electricity !" as would be expected but "I always make sure I'm wearing Wellington boots when I do anything like that."
We really don't deserve electricity. Perhaps the greenists might keep us from harm.
Putting a bit too much electro in Electro-Kev!
Stay safe, friend
I feel for you E-K. A moment to remember! I did the same once - molten blob of copper went flying across the room. Very luckily I wasn't in the way.
I was removing a no longer needed shower cable, after triple checking I'd turned it off! But somehow it was a different circuit from another of the 4 fuse-boxes in the nightmare wiring that came with the house (previously a HMO of sorts). Lesson learned. Good job I'd put the thick rubber gloves on!
At one place of employment undergoing building work a digger driver cut through the main computer power supply cable - a mainframe.
Big bang and flash outside, all the lights and screens went off, we rushed to the windows where smoke was rising from behind the temporary portacabin housing the beast.
We managed to persuade a trainee that something in his code must have done it! He'd just written his first program and hit 'enter' when it happened.
Digger hydraulics fused solid, driver luckily was unharmed though I imagine his boss wasn't too pleased.
Lord Finchley tried to mend the Electric Light
Himself. It struck him dead: And serve him right!
It is the business of the wealthy man
To give employment to the artisan
That's Bollock. Er, I mean, Belloc
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