As so frequently stated hereabouts since forever (since 2007, to be precise), the whole point of French energy policy is to have someone else pay for France's humungous nuclear decommissioning liabilities.
Now they'd like "negotiations" over Hinkley Point C and Sizewell C to be merged into one big financing deal. Well, well.
First of all, what "negotiations" are needed over HPC, pray? We already have a definitive financing deal: a binding contract that clearly has EDF on the hook for the stonking cost overruns. (Its alternative is to walk away: such is that inane deal, struck by the dickhead Osborne and signed by the fragrant May, that EDF is under no obligation to finish the thing at all.) Do contracts signed by the French mean anything? Silly question.
Second, why would we buy a second nuke - of the very same design - from the same imbeciles who clearly acknowledge they can't finish the first, under a different deal structure where we are on the hook for the inevitable overruns?
Is there any point in telling Starmer and Miliband to grow a pair - maybe just one pair between the two of them? EDF are shit project managers; and successive governments have been shit negotiators. Each deserves the other.
ND
8 comments:
EDF seem to have forgotten they already have a joint deal to develop HPC **and** Sizewell C. The original 2015 CfD deal for HPC had an option for EDF to do SZC as a follow-on, and if taken up the CfD rate would drop from £92.50 (2012 pounds) to £89.50/MWh reflecting the HPC learning making SZC cheaper to build!
And that £89.50/MWh is CPI inflation linked and runs for 35 years from switch-on, making it about £127/MWh in today's money. I've somewhat lost track of the average UK wholesale leccy price lately, but it seems about £80/MWh for the grid spot System Buy / Sell Prices, and it should be rather less for pre-agreed long term supply contracts. So per that old 2015 contract, EDF would be making about £50/MWh over and above average spot prices, maybe for about 35 years. If new nuclear was so great and economic, you'd expect EDF to love that 2015 deal and stick to it, wouldn't you.
Getting my envelope out, lets see what £50/MWh above the cost of other generation methods would deliver to EDF over the 35 year SZC CfD term. So thats £50/MWh for the 3,200 MWe SZC generation at the claimed ~95% availability for 35 years, in £billions:
50 * 3200 * 0.95 * 24 * 365 * 35 / 10^9 = 46.60
So on the not-goog-enough for EDF 2015 contract, EDF would get paid around £46.60 billion more than alternative generation over 35 years. That's money us leccy consumers will have to pay EDF. So what is that per UK household per year (leaving out business)?
(46.60 * 10^9 / 35) / (28.4 * 10^6) = 46.88
So to fund EDF to build SZC the average household would have to pay on average an extra £47/year above what other generation would cost. (Roughly, with arm-waving approximate maths ignoring discount rates etc, and what new technology etc might bring in the future.)
But that existing deal is not good enough for EDF, and they want more; much more I suspect.
Oh look, EDF haven't quite forgotten that 2015 CfD deal for SZC they agreed with the UK. They still have the 2015 press release on their website!
https://www.edfenergy.com/energy/nuclear-new-build-projects/hinkley-point-c/news-views/agreements-in-place
"sets a price for Hinkley Point C’s electricity of £92.50 per MWh (in 2012 money) for 35 years or £89.50 per MWh if a final investment decision is taken on Sizewell C."
"Each deserves the other."
And WE deserve neither.
Whatever happened to all those CEGB engineers. The ones with tweed jackets, leather arm patches and a briar pipe. They seemed pretty good at large projects. Not always cheap but it usually worked in the end.
Otherwise thumbing through the catalogue there seem not too many suppliers around - not a lot of choice. We seem a bit sniffy about the Chinese and Rosatom may not be flavour of the month. EDF may not be cheap and ready to screw us over but the other players look to be much the same.
Then I would be reluctant to have anything to do with the UK government. An unreliable customer, slow, fickle and interfering with a bad reputation for delay and messing about. So jack up the price sky high - they don't have any choices and would be lucky to get anyone.
A job lot of tweed jackets, arm patches and briar pipes it is - for male and female identifying engineers with at least three sets of loos and good air con. And lots and lots and lots of securidddy to really screw things up.
The CEGB nuclear engineers have mostly retired, it was 1998 when Blair announced "no new nuclear". And thanks to that announcement, no new ones have been trained in the years after.
Rosatom is the obvious partner: No investment needed !
"In May 2010, Russia and Turkey signed an agreement that a subsidiary of Rosatom would build, own, and operate a power plant in Akkuyu comprising four 1,200 MWe VVER1200 units."
"Electricity will be purchased at a price of 12.35 US cents per kW·h and the remaining power will be sold in the open market by the producer. According to energy analysts this price is high."
Strangely enough, there're been no takers for such tantalising deals in western countries. Environmental considerations aside, the business case for nuclear power is primarily based on delivering energy sovereignty.
Not a particular convincing offer from Russia in ensuring that one. As Ukraine found with the Zaporizhzhya NPP, where customers get into a dispute with Russia, its thoughts quickly turn to repossessions.
@jim If you want a nuclear plant then you could do a lot worse than going with the South Koreans. They seem pretty friendly and competent. See UAE reactor if you want an endorsement.
"No investment needed" is a very large carrot dangled in front of a flat broke country nonetheless. A pity Blair didn't care about energy sovereignty in 1998.
I'm not sure we care very much about sovereignty, or our mines wouldn't be shut and our coast wouldn't have LNG terminals, electricity interconnectors, gas pipelines.
While considering Russia’s most generous offer, I cannot but help be reminded of the old adage about “the high cost of low prices”.
I’d rather take my chances with the Frogs, ta very much.
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