Tag Archives: Nuclear power stations

Flagship reactor launch postponed again

As the French state continues to bail out its debt-ridden nuclear industry a new delay to its flagship reactor casts doubt on the future.

LONDON, 31 December, 2019 − The edifice already heading for the status of the largest and most expensive construction project in the world, the Hinkley C nuclear power station in the UK, is dragging its builder, the French giant EDF, into ever-deeper debt: the company’s flagship reactor is facing still more delay.

Although EDF is a vast company, owning 58 reactors in France alone, and is 85% owned by the French state, it owes around €60 billion ($67bn), a debt expected to increase by €3 billion ($3.35bn) a year.

This has led some city analysts, notably S&P Global, to downgrade the company’s prospects to “negative” − which is essentially a recommendation to shareholders to sell.

Apart from the problem that EDF’s fleet of reactors in France is operating well beyond their original design life and are in constant need of safety and maintenance upgrades, the company’s main problem is its flagship, the European Pressurised Water Reactor (EPR), which is getting into ever-greater difficulties.

In Europe there are four EPRs under construction: the two barely begun at Hinkley Point in Somerset in the west of England; one in northern France at Flamanville in Normandy; and the original prototype in Finland, known as Olkiluoto 3 (OL3).

The extraordinary fact is that, although OL3 was due to start up in 2009, it is still incomplete, and its start date has just been put back again – until 2021.

“Some have wondered how on earth EDF can still go forward with a project that looks like financial insanity for its own accounts”

In the midst of the Christmas festivities news was slipped out of another further substantial delay to this reactor, which is being built on Finland’s southwest coast.

Construction began nearly 15 years ago and was due to be completed within four years. But now the reactor is not expected to produce power until March 2021, instead of by the most recent estimate, September 2020.

Bizarrely, the delay is because some of the equipment in the station requires new spare parts to replace earlier versions that have never been used.

Or, as OL3 project director Jouni Silvennoinen said in a TVO statement: “Because of numerous delays we have to do maintenance to equipment and components already installed to ensure fluent start-up and continuous operation. The manufacturing and deliveries of the spare parts take time.”

The second EPR being built, at Flamanville, is in even deeper trouble. Work began in December 2007 on the 1650 megawatt unit, which was originally expected to start commercial operation in 2013, but that has now been put back to 2022.

The latest problem in this catalogue was the discovery of faulty welds inside the reactor’s containment vessel. These require replacement, an incredibly difficult, time-consuming and expensive operation. Because of these problems EDF has been forced to adjust both the schedule and the estimated cost of construction, to €12.4 billion ($13.85bn), three times the original estimate.

Delays expected

Because it has learned lessons from building these two prototypes, EDF says, it is confident that the giant Hinkley Point twin reactor project will go much more smoothly. The first Hinkley reactor is due for completion in 2025, although cost overruns and potential delays because of unforeseen “ground conditions” have already been announced.

But it is the delay at Flamanville that is having a knock-on effect at Hinkley Point and is partly causing EDF’s debt problems. The company was granted cheap loans to pay for the UK construction by the British Treasury, considerably reducing the cost to the company by saving it the need to borrow money at commercial rates.

However, the loan was conditional on Flamanville being up and running by the end of 2020, a condition clearly not going to be met. As a result the company is financing the build directly from its balance sheet – a big ask, because the estimated cost is more than $25bn (£19bn).

For comparison, the most expensive building in the world to date is the giant Abraj Al Bait hotel, in Mecca, Saudi Arabia, at $15bn. The latest EDF prediction is that Hinkley Point’s reactors will cost from £21.5bn to £22.5bn ($26.6bn-$27.9bn), and that is expected to rise.

David Toke, reader in energy politics at the University of Aberdeen, UK, in his regular blog on energy, puts it this way: “EDF faces massive financial losses as they continue to fund the building of Hinkley C.

“This is because they are paying for the power station from their balance sheet rather than use much cheaper UK Treasury loans that were originally agreed with the UK Government.

Shares depressed

“In short, paying for the construction costs out of shareholders’ dividends is very costly, something that depresses share prices and in effect loses tremendous amounts of money for the main shareholder, the French Government.

“In order to complete Hinkley C, EDF can only do so by issuing its own bonds, and thus accumulating debt that rests on its balance sheets. Such mounting debt reduces the possibility for issuing dividends to shareholders and thus depresses share prices.

“Some with expert knowledge have wondered how on earth EDF can still go forward with a project that looks like financial insanity for its own accounts.”

Dr Toke argues that the only reason for continuing with the project is French pride.

But so far the French Government, which ultimately foots the bill for the nuclear industry’s investments − and its failures − has continued to back all three projects.

The cost to the French taxpayer is already astronomical, and while none of the four reactors produces any power, their costs continue to escalate. How long this can continue, nobody knows. − Climate News Network

As the French state continues to bail out its debt-ridden nuclear industry a new delay to its flagship reactor casts doubt on the future.

LONDON, 31 December, 2019 − The edifice already heading for the status of the largest and most expensive construction project in the world, the Hinkley C nuclear power station in the UK, is dragging its builder, the French giant EDF, into ever-deeper debt: the company’s flagship reactor is facing still more delay.

Although EDF is a vast company, owning 58 reactors in France alone, and is 85% owned by the French state, it owes around €60 billion ($67bn), a debt expected to increase by €3 billion ($3.35bn) a year.

This has led some city analysts, notably S&P Global, to downgrade the company’s prospects to “negative” − which is essentially a recommendation to shareholders to sell.

Apart from the problem that EDF’s fleet of reactors in France is operating well beyond their original design life and are in constant need of safety and maintenance upgrades, the company’s main problem is its flagship, the European Pressurised Water Reactor (EPR), which is getting into ever-greater difficulties.

In Europe there are four EPRs under construction: the two barely begun at Hinkley Point in Somerset in the west of England; one in northern France at Flamanville in Normandy; and the original prototype in Finland, known as Olkiluoto 3 (OL3).

The extraordinary fact is that, although OL3 was due to start up in 2009, it is still incomplete, and its start date has just been put back again – until 2021.

“Some have wondered how on earth EDF can still go forward with a project that looks like financial insanity for its own accounts”

In the midst of the Christmas festivities news was slipped out of another further substantial delay to this reactor, which is being built on Finland’s southwest coast.

Construction began nearly 15 years ago and was due to be completed within four years. But now the reactor is not expected to produce power until March 2021, instead of by the most recent estimate, September 2020.

Bizarrely, the delay is because some of the equipment in the station requires new spare parts to replace earlier versions that have never been used.

Or, as OL3 project director Jouni Silvennoinen said in a TVO statement: “Because of numerous delays we have to do maintenance to equipment and components already installed to ensure fluent start-up and continuous operation. The manufacturing and deliveries of the spare parts take time.”

The second EPR being built, at Flamanville, is in even deeper trouble. Work began in December 2007 on the 1650 megawatt unit, which was originally expected to start commercial operation in 2013, but that has now been put back to 2022.

The latest problem in this catalogue was the discovery of faulty welds inside the reactor’s containment vessel. These require replacement, an incredibly difficult, time-consuming and expensive operation. Because of these problems EDF has been forced to adjust both the schedule and the estimated cost of construction, to €12.4 billion ($13.85bn), three times the original estimate.

Delays expected

Because it has learned lessons from building these two prototypes, EDF says, it is confident that the giant Hinkley Point twin reactor project will go much more smoothly. The first Hinkley reactor is due for completion in 2025, although cost overruns and potential delays because of unforeseen “ground conditions” have already been announced.

But it is the delay at Flamanville that is having a knock-on effect at Hinkley Point and is partly causing EDF’s debt problems. The company was granted cheap loans to pay for the UK construction by the British Treasury, considerably reducing the cost to the company by saving it the need to borrow money at commercial rates.

However, the loan was conditional on Flamanville being up and running by the end of 2020, a condition clearly not going to be met. As a result the company is financing the build directly from its balance sheet – a big ask, because the estimated cost is more than $25bn (£19bn).

For comparison, the most expensive building in the world to date is the giant Abraj Al Bait hotel, in Mecca, Saudi Arabia, at $15bn. The latest EDF prediction is that Hinkley Point’s reactors will cost from £21.5bn to £22.5bn ($26.6bn-$27.9bn), and that is expected to rise.

David Toke, reader in energy politics at the University of Aberdeen, UK, in his regular blog on energy, puts it this way: “EDF faces massive financial losses as they continue to fund the building of Hinkley C.

“This is because they are paying for the power station from their balance sheet rather than use much cheaper UK Treasury loans that were originally agreed with the UK Government.

Shares depressed

“In short, paying for the construction costs out of shareholders’ dividends is very costly, something that depresses share prices and in effect loses tremendous amounts of money for the main shareholder, the French Government.

“In order to complete Hinkley C, EDF can only do so by issuing its own bonds, and thus accumulating debt that rests on its balance sheets. Such mounting debt reduces the possibility for issuing dividends to shareholders and thus depresses share prices.

“Some with expert knowledge have wondered how on earth EDF can still go forward with a project that looks like financial insanity for its own accounts.”

Dr Toke argues that the only reason for continuing with the project is French pride.

But so far the French Government, which ultimately foots the bill for the nuclear industry’s investments − and its failures − has continued to back all three projects.

The cost to the French taxpayer is already astronomical, and while none of the four reactors produces any power, their costs continue to escalate. How long this can continue, nobody knows. − Climate News Network

China may own UK's nuclear stations

FOR IMMEDIATE RELEASE
Britain, a pioneer of nuclear power, is handing over its industry to the French and Chinese in a move likely to see a doubling of electricity prices.

LONDON, 17 October – The Chinese are to help finance and build a new generation of nuclear power stations in the United Kingdom, helping out the French giant EDF which can no longer afford the £14 billion cost of the first station on its own.

The agreement, announced in China by George Osborne, the British Chancellor of the Exchequer [Finance Minister] at the end of a visit, is bound to be controversial. Initially the Chinese will take only about a 30% interest in this first station, but in future reactor building programmes they will be allowed to own a majority stake.

The British Government deal with EDF, which already operates all the existing civil nuclear stations in the UK, is to heavily subsidise the new construction by guaranteeing the price of electricity for 35 years.

The exact price is yet to be announced but it is expected to be double the existing price of electricity and is sure to spark an inquiry by the European Union, which bans subsidies because they interfere with competition.

Many will see the decision to build two European Pressurized Reactors at Hinkley Point in Somerset as extraordinary in view of the appalling cost overruns and delays of two similar ventures in Finland and France.

The same design of plant being built in Finland, Olkiluoto 3, is seven years late and billions over budget. Construction began in 2005 and the station was due to produce electricity in 2009. The latest estimate is that it will be on line in 2016.

EDF is building a second reactor at Flamanville in France. Work began in 2007, and the reactor was due to be completed in 2012 at a cost of 3 bn euros. Currently the completion date has slipped to 2016, and the cost has almost tripled to 8.5 bn euros.

“It may be shocking to some that businesses and investors from Britain… will not own the new generation of nuclear power plants, and they may instead belong to China’s nuclear power giants as well as to the French.”

Mr Osborne claimed the deal was good for investment in Britain and for jobs, and asserted that it would mean lower long-term energy costs for consumers.

Despite his optimism EDF has already told British companies that they are unlikely to get many contracts. This is because it is 20 years since any British companies were involved in building nuclear power stations and they no longer have the expertise to do so. Most of the jobs are likely to go to French and Chinese companies.

Robert Peston, the BBC’s business editor, summed up some reaction in Britain: “When you think about the history of nuclear power, it may be shocking to some that businesses and investors from Britain – whose scientists and engineers were pioneers in this technology in the early days – will not own the new generation of nuclear power plants, and they may instead belong to China’s nuclear power giants as well as to the French.

“The Government is refusing to finance these hugely pricey projects directly – although it will allow the owners of any new nuclear generators to charge well above the current market price for any power they produce in years and decades to come, so that the billions in development and construction costs can be recouped.”

The announcement comes at a time when some older power stations in Britain are being closed because they are producing too much carbon dioxide and have not been modernised. The Government has been warned that Britain is in danger of power cuts in the next five years if there are cold winters.

However, the proposed nuclear stations will make no difference to this situation because they are likely to take 10 years to come on line if the current pattern of delays and cost overruns is repeated. – Climate News Network

FOR IMMEDIATE RELEASE
Britain, a pioneer of nuclear power, is handing over its industry to the French and Chinese in a move likely to see a doubling of electricity prices.

LONDON, 17 October – The Chinese are to help finance and build a new generation of nuclear power stations in the United Kingdom, helping out the French giant EDF which can no longer afford the £14 billion cost of the first station on its own.

The agreement, announced in China by George Osborne, the British Chancellor of the Exchequer [Finance Minister] at the end of a visit, is bound to be controversial. Initially the Chinese will take only about a 30% interest in this first station, but in future reactor building programmes they will be allowed to own a majority stake.

The British Government deal with EDF, which already operates all the existing civil nuclear stations in the UK, is to heavily subsidise the new construction by guaranteeing the price of electricity for 35 years.

The exact price is yet to be announced but it is expected to be double the existing price of electricity and is sure to spark an inquiry by the European Union, which bans subsidies because they interfere with competition.

Many will see the decision to build two European Pressurized Reactors at Hinkley Point in Somerset as extraordinary in view of the appalling cost overruns and delays of two similar ventures in Finland and France.

The same design of plant being built in Finland, Olkiluoto 3, is seven years late and billions over budget. Construction began in 2005 and the station was due to produce electricity in 2009. The latest estimate is that it will be on line in 2016.

EDF is building a second reactor at Flamanville in France. Work began in 2007, and the reactor was due to be completed in 2012 at a cost of 3 bn euros. Currently the completion date has slipped to 2016, and the cost has almost tripled to 8.5 bn euros.

“It may be shocking to some that businesses and investors from Britain… will not own the new generation of nuclear power plants, and they may instead belong to China’s nuclear power giants as well as to the French.”

Mr Osborne claimed the deal was good for investment in Britain and for jobs, and asserted that it would mean lower long-term energy costs for consumers.

Despite his optimism EDF has already told British companies that they are unlikely to get many contracts. This is because it is 20 years since any British companies were involved in building nuclear power stations and they no longer have the expertise to do so. Most of the jobs are likely to go to French and Chinese companies.

Robert Peston, the BBC’s business editor, summed up some reaction in Britain: “When you think about the history of nuclear power, it may be shocking to some that businesses and investors from Britain – whose scientists and engineers were pioneers in this technology in the early days – will not own the new generation of nuclear power plants, and they may instead belong to China’s nuclear power giants as well as to the French.

“The Government is refusing to finance these hugely pricey projects directly – although it will allow the owners of any new nuclear generators to charge well above the current market price for any power they produce in years and decades to come, so that the billions in development and construction costs can be recouped.”

The announcement comes at a time when some older power stations in Britain are being closed because they are producing too much carbon dioxide and have not been modernised. The Government has been warned that Britain is in danger of power cuts in the next five years if there are cold winters.

However, the proposed nuclear stations will make no difference to this situation because they are likely to take 10 years to come on line if the current pattern of delays and cost overruns is repeated. – Climate News Network

China may own UK’s nuclear stations

FOR IMMEDIATE RELEASE Britain, a pioneer of nuclear power, is handing over its industry to the French and Chinese in a move likely to see a doubling of electricity prices. LONDON, 17 October – The Chinese are to help finance and build a new generation of nuclear power stations in the United Kingdom, helping out the French giant EDF which can no longer afford the £14 billion cost of the first station on its own. The agreement, announced in China by George Osborne, the British Chancellor of the Exchequer [Finance Minister] at the end of a visit, is bound to be controversial. Initially the Chinese will take only about a 30% interest in this first station, but in future reactor building programmes they will be allowed to own a majority stake. The British Government deal with EDF, which already operates all the existing civil nuclear stations in the UK, is to heavily subsidise the new construction by guaranteeing the price of electricity for 35 years. The exact price is yet to be announced but it is expected to be double the existing price of electricity and is sure to spark an inquiry by the European Union, which bans subsidies because they interfere with competition. Many will see the decision to build two European Pressurized Reactors at Hinkley Point in Somerset as extraordinary in view of the appalling cost overruns and delays of two similar ventures in Finland and France. The same design of plant being built in Finland, Olkiluoto 3, is seven years late and billions over budget. Construction began in 2005 and the station was due to produce electricity in 2009. The latest estimate is that it will be on line in 2016. EDF is building a second reactor at Flamanville in France. Work began in 2007, and the reactor was due to be completed in 2012 at a cost of 3 bn euros. Currently the completion date has slipped to 2016, and the cost has almost tripled to 8.5 bn euros.

“It may be shocking to some that businesses and investors from Britain… will not own the new generation of nuclear power plants, and they may instead belong to China’s nuclear power giants as well as to the French.”

Mr Osborne claimed the deal was good for investment in Britain and for jobs, and asserted that it would mean lower long-term energy costs for consumers. Despite his optimism EDF has already told British companies that they are unlikely to get many contracts. This is because it is 20 years since any British companies were involved in building nuclear power stations and they no longer have the expertise to do so. Most of the jobs are likely to go to French and Chinese companies. Robert Peston, the BBC’s business editor, summed up some reaction in Britain: “When you think about the history of nuclear power, it may be shocking to some that businesses and investors from Britain – whose scientists and engineers were pioneers in this technology in the early days – will not own the new generation of nuclear power plants, and they may instead belong to China’s nuclear power giants as well as to the French. “The Government is refusing to finance these hugely pricey projects directly – although it will allow the owners of any new nuclear generators to charge well above the current market price for any power they produce in years and decades to come, so that the billions in development and construction costs can be recouped.” The announcement comes at a time when some older power stations in Britain are being closed because they are producing too much carbon dioxide and have not been modernised. The Government has been warned that Britain is in danger of power cuts in the next five years if there are cold winters.

However, the proposed nuclear stations will make no difference to this situation because they are likely to take 10 years to come on line if the current pattern of delays and cost overruns is repeated. – Climate News Network

FOR IMMEDIATE RELEASE Britain, a pioneer of nuclear power, is handing over its industry to the French and Chinese in a move likely to see a doubling of electricity prices. LONDON, 17 October – The Chinese are to help finance and build a new generation of nuclear power stations in the United Kingdom, helping out the French giant EDF which can no longer afford the £14 billion cost of the first station on its own. The agreement, announced in China by George Osborne, the British Chancellor of the Exchequer [Finance Minister] at the end of a visit, is bound to be controversial. Initially the Chinese will take only about a 30% interest in this first station, but in future reactor building programmes they will be allowed to own a majority stake. The British Government deal with EDF, which already operates all the existing civil nuclear stations in the UK, is to heavily subsidise the new construction by guaranteeing the price of electricity for 35 years. The exact price is yet to be announced but it is expected to be double the existing price of electricity and is sure to spark an inquiry by the European Union, which bans subsidies because they interfere with competition. Many will see the decision to build two European Pressurized Reactors at Hinkley Point in Somerset as extraordinary in view of the appalling cost overruns and delays of two similar ventures in Finland and France. The same design of plant being built in Finland, Olkiluoto 3, is seven years late and billions over budget. Construction began in 2005 and the station was due to produce electricity in 2009. The latest estimate is that it will be on line in 2016. EDF is building a second reactor at Flamanville in France. Work began in 2007, and the reactor was due to be completed in 2012 at a cost of 3 bn euros. Currently the completion date has slipped to 2016, and the cost has almost tripled to 8.5 bn euros.

“It may be shocking to some that businesses and investors from Britain… will not own the new generation of nuclear power plants, and they may instead belong to China’s nuclear power giants as well as to the French.”

Mr Osborne claimed the deal was good for investment in Britain and for jobs, and asserted that it would mean lower long-term energy costs for consumers. Despite his optimism EDF has already told British companies that they are unlikely to get many contracts. This is because it is 20 years since any British companies were involved in building nuclear power stations and they no longer have the expertise to do so. Most of the jobs are likely to go to French and Chinese companies. Robert Peston, the BBC’s business editor, summed up some reaction in Britain: “When you think about the history of nuclear power, it may be shocking to some that businesses and investors from Britain – whose scientists and engineers were pioneers in this technology in the early days – will not own the new generation of nuclear power plants, and they may instead belong to China’s nuclear power giants as well as to the French. “The Government is refusing to finance these hugely pricey projects directly – although it will allow the owners of any new nuclear generators to charge well above the current market price for any power they produce in years and decades to come, so that the billions in development and construction costs can be recouped.” The announcement comes at a time when some older power stations in Britain are being closed because they are producing too much carbon dioxide and have not been modernised. The Government has been warned that Britain is in danger of power cuts in the next five years if there are cold winters.

However, the proposed nuclear stations will make no difference to this situation because they are likely to take 10 years to come on line if the current pattern of delays and cost overruns is repeated. – Climate News Network

UK confusion over nuclear future

FOR IMMEDIATE RELEASE  It’s the nuclear closure programme that never was. The UK government insists it needs new nuclear power stations urgently built to replace ageing installations − and yet its safety watchdog is granting lengthy extensions that could see old ones continue for decades LONDON, 9 September − The UK Government has been telling its parliament and the public that because eight large nuclear stations are scheduled to close over the next 10 years, the country needs urgently to build some new ones to keep the nation’s lights on. Yet EDF, the French state-owned company that bought the eight nuclear stations in 2009 for £12.5 billion, has no intention of closing any of them. A Government spokesman denied that its statements were misleading and explained the apparent contradiction by saying that if the stations did not pass their periodic safety reviews then they would have to close. However, there is no reason to believe they will fail safety tests.  The state safety watchdog, the Office for Nuclear Regulation, told Climate News Network that keeping them open is fine by them. The stations are constantly monitored, and periodically have major safety reviews. As long as they remain safe, they can remain in operation, provided EDF wants them to. It is a commercial decision, the watchdog says.

“Britain will be getting almost half its electricity from nuclear power − something it has never told parliament”

This strange situation means that if the Government is successful in its policy of building eight new large nuclear stations, Britain will be getting almost half its electricity from nuclear power − something it has never told parliament or discussed as part of its energy policy. Currently, EDF’s existing nuclear stations produce nearly 20% of the country’s electricity.  Until earlier this year, according to the Government, two of them would be closing in 2016: Hinkley Point B in Somerset, England, and Hunterston B in north Ayrshire, Scotland, both of which came into operation in 1976. These were supposed to be the beginning of a whole series of closures that the Government used to argue that new stations were urgently needed. However, EDF successfully applied for a seven-year extension to the lives of the two stations. The closing date for them has now changed on the Government website to 2023, but this could extend again to 2030, provided safety is still not an issue.  The policy of EDF is to continue going for life extensions for its reactors as long as it can. This means that five more stations that are, according to the Government, due to close in 2018, 2019 and 2023, are all expected to be granted seven more years.

Cheap to run

To EDF, this rolling programme of seven-year extensions makes good economic sense. Nuclear power stations, once built, are reasonably cheap to run, and every country in the world keeps them open as long as possible. Put simply, unless prohibitive costs are involved in periodically updating the safety requirements, running them makes considerable profits. The second reason is that it costs a minimum of £2 billion to decommission a nuclear reactor, according to the European Union, and there are two reactors at each of these EDF stations. If they closed, that huge decommissioning liability would have to be shown on the nuclear generator’s balance sheet − figures that would soon overtake the net worth of the company, thus making it technically bankrupt. A Department of Energy and Climate Change spokeswoman said she did not believe the Government’s stance was misleading. The dates quoted for the closure of stations were their expected lifetimes, unless they were granted extensions. The Government, she said, could not anticipate what would happen. Meanwhile, the plans to build new stations continued – and the spokeswoman said EDF is still currently “inching forward” in its negotiations with the Government on how to finance building them.

Price doubles

The cost of new stations is in stark contrast to the price EDF paid for the old ones. The whole of British Energy cost EDF £12.5 billion to buy, for which it got eight large nuclear power stations, as well as considerable assets, including sites for new ones. This values the old stations, at best, at just over £1 billion each. This is in contrast to the cost of building a new reactor of at least £8 billion, which is why EDF is unwilling to start on new ones until the Government comes up with a generous guarantee of a minimum price for the electricity.  The price EDF is asking for would be double what consumers are currently paying. The problem the Government faces is that it was elected on the promise that it would not subsidise nuclear power. Various attempts to call a guaranteed price “a low carbon electricity tariff”, rather than a subsidy, have not satisfied critics. This is also complicated because the European Union is also against subsidies, because they distort competition. Despite this hurdle, EDF still plans to build new nuclear stations in Somerset and in Suffolk, England, although the decision to go ahead has been postponed several times. The expected completion date of the first new station has been put back from 2018 to 2022, and even that is considered to be optimistic. There is at least one other nuclear player in the market waiting to see how the negotiations go between EDF and the British Government. This is the Japanese electronics giant Hitachi. It plans to build new plants at other sites at Wylfa on the isle of Anglesey, Wales, and at Oldbury, in Gloucestershire, England. These proposals have also been welcomed by the Government, but again no details of how much Hitachi will get for the electricity have been agreed. Whatever happens ,the Government spokeswoman said, it is still committed to its policy of new nuclear build to keep the lights on and ensure security of supply. − Climate News Network

FOR IMMEDIATE RELEASE  It’s the nuclear closure programme that never was. The UK government insists it needs new nuclear power stations urgently built to replace ageing installations − and yet its safety watchdog is granting lengthy extensions that could see old ones continue for decades LONDON, 9 September − The UK Government has been telling its parliament and the public that because eight large nuclear stations are scheduled to close over the next 10 years, the country needs urgently to build some new ones to keep the nation’s lights on. Yet EDF, the French state-owned company that bought the eight nuclear stations in 2009 for £12.5 billion, has no intention of closing any of them. A Government spokesman denied that its statements were misleading and explained the apparent contradiction by saying that if the stations did not pass their periodic safety reviews then they would have to close. However, there is no reason to believe they will fail safety tests.  The state safety watchdog, the Office for Nuclear Regulation, told Climate News Network that keeping them open is fine by them. The stations are constantly monitored, and periodically have major safety reviews. As long as they remain safe, they can remain in operation, provided EDF wants them to. It is a commercial decision, the watchdog says.

“Britain will be getting almost half its electricity from nuclear power − something it has never told parliament”

This strange situation means that if the Government is successful in its policy of building eight new large nuclear stations, Britain will be getting almost half its electricity from nuclear power − something it has never told parliament or discussed as part of its energy policy. Currently, EDF’s existing nuclear stations produce nearly 20% of the country’s electricity.  Until earlier this year, according to the Government, two of them would be closing in 2016: Hinkley Point B in Somerset, England, and Hunterston B in north Ayrshire, Scotland, both of which came into operation in 1976. These were supposed to be the beginning of a whole series of closures that the Government used to argue that new stations were urgently needed. However, EDF successfully applied for a seven-year extension to the lives of the two stations. The closing date for them has now changed on the Government website to 2023, but this could extend again to 2030, provided safety is still not an issue.  The policy of EDF is to continue going for life extensions for its reactors as long as it can. This means that five more stations that are, according to the Government, due to close in 2018, 2019 and 2023, are all expected to be granted seven more years.

Cheap to run

To EDF, this rolling programme of seven-year extensions makes good economic sense. Nuclear power stations, once built, are reasonably cheap to run, and every country in the world keeps them open as long as possible. Put simply, unless prohibitive costs are involved in periodically updating the safety requirements, running them makes considerable profits. The second reason is that it costs a minimum of £2 billion to decommission a nuclear reactor, according to the European Union, and there are two reactors at each of these EDF stations. If they closed, that huge decommissioning liability would have to be shown on the nuclear generator’s balance sheet − figures that would soon overtake the net worth of the company, thus making it technically bankrupt. A Department of Energy and Climate Change spokeswoman said she did not believe the Government’s stance was misleading. The dates quoted for the closure of stations were their expected lifetimes, unless they were granted extensions. The Government, she said, could not anticipate what would happen. Meanwhile, the plans to build new stations continued – and the spokeswoman said EDF is still currently “inching forward” in its negotiations with the Government on how to finance building them.

Price doubles

The cost of new stations is in stark contrast to the price EDF paid for the old ones. The whole of British Energy cost EDF £12.5 billion to buy, for which it got eight large nuclear power stations, as well as considerable assets, including sites for new ones. This values the old stations, at best, at just over £1 billion each. This is in contrast to the cost of building a new reactor of at least £8 billion, which is why EDF is unwilling to start on new ones until the Government comes up with a generous guarantee of a minimum price for the electricity.  The price EDF is asking for would be double what consumers are currently paying. The problem the Government faces is that it was elected on the promise that it would not subsidise nuclear power. Various attempts to call a guaranteed price “a low carbon electricity tariff”, rather than a subsidy, have not satisfied critics. This is also complicated because the European Union is also against subsidies, because they distort competition. Despite this hurdle, EDF still plans to build new nuclear stations in Somerset and in Suffolk, England, although the decision to go ahead has been postponed several times. The expected completion date of the first new station has been put back from 2018 to 2022, and even that is considered to be optimistic. There is at least one other nuclear player in the market waiting to see how the negotiations go between EDF and the British Government. This is the Japanese electronics giant Hitachi. It plans to build new plants at other sites at Wylfa on the isle of Anglesey, Wales, and at Oldbury, in Gloucestershire, England. These proposals have also been welcomed by the Government, but again no details of how much Hitachi will get for the electricity have been agreed. Whatever happens ,the Government spokeswoman said, it is still committed to its policy of new nuclear build to keep the lights on and ensure security of supply. − Climate News Network