Sunday, March 13, 2016

Hinkley Point C Nuclear Plant in More Trouble

Subtitle: No Billionaire Investors Rushing To Write A Check

Well, this has got to sting, probably more than a little, for the nuclear cheerleaders who (falsely) claim that nuclear power is the cheapest way to produce electricity, and should be built world-wide just like France did: obtaining 80 percent or more of all electricity from nuclear reactors.   The fact is, the UK's much-trumpeted future nuclear plant at Hinkley Point C is in deep financial trouble even before the first shovel of dirt is displaced.   see link to a WSJ article from March 12, 2016,  titled "EDF Asks French Government for Aid for Hinkley Point Nuclear Plant."    (note: EDF is France's 85% state-owned electric company, Electricit√© de France SA)   

From the article:  "  (EDF CEO) Mr. Levy said EDF wouldn’t engage in the £18 billion ($25.89 billion) project unless it was able to secure necessary financial commitments from the state (France), which holds almost 85% of the utility."

And, here is the problem:  EDF already has debt troubles, and taking on more debt to build Hinkley Point C nuclear plant is seen by union members on EDF's board of directors to be simply too much debt.   EDF's credit-worthiness is under review, and the French company Areva that manufactures nuclear reactors is also having serious financial trouble.  Areva is reported to have lost money in each of the five past years.   Furthermore, the much-touted new-generation nuclear reactor design from Areva, the EPR, is not faring well in the commercial world.  Only two plants are building the behemoth (and it is huge), one in France and one in Finland.  Both projects are seriously in trouble, both far over budget and many years behind schedule.  SLB has articles on both the Flamanville, France, and Olkiluoto, Finland nuclear projects.     With those projects as the only two examples, and both miserable failures, the UK proposed project with the same EPR technology cannot hope to be built for the stated amount ($26 billion), and on schedule.    

Apparently, it requires something like sinking the national electric company (EDF in this case) to bring the economic truth out on modern, state-of-the-art nuclear power plants: they are far too expensive to construct and result in outrageous power prices to customers that are forced to buy the electricity.  see link to previous SLB articles on this topic. 

It is indeed interesting that of all the billionaires on the planet, none are reported to be rushing to the Hinkley Point C table to write a check for the £18 billion.  UK's billionaires include Reuben, Grosvenor, Grayken (Ireland), O'Brien (Ireland), Ratcliffe, Lewis, Barclay, Branson, Graff, Bruno Schroder (a banker), Calder, Dyson, Coates, and others, but none has stepped up to invest to the best of my knowledge.    Indeed, such absence of action gives one reason to wonder if nuclear plants are really all that great as an investment.   

In the case of proposed Hinkley Point C, power sold into the wholesale market is to be triple the price of that from existing power plants.  

The UK is indeed in a pickle.  Domestic coal has (almost) run out, so it must import the stuff.  Natural gas exists offshore in the North Sea, or UK could import LNG as required.  Nuclear is far too expensive (not to mention the always-present danger of meltdowns and radiation release).  Solar is not an option for the cloudy and rain-swept island.  Wind is indeed an option but requires massive storage systems to produce power reliably.   Fortunately, there is a long coastline so that under-sea pumped storage is quite handy. 

It appears that UK must turn to bio-renewables for at least part of its power, the human waste-to-syngas technology patented by Dr. Chan Park of UC-Riverside, and the municipal solid waste-to-syngas technology patented by Peter A. Nick and four other chemical engineers from California.  

UPDATE 1:  3-19-2016, it appears that the French government will approve funds for Hinkley Point C after all.  There may be some financial moves to make this possible.  One must admire the French, even in a doomed battle to provide work for their citizens in designing and building nuclear power plants.   Once the plant is under construction, the delays and cost over-runs will zoom the cost to build far past $32 billion, making it very likely the most expensive nuclear plant ever built.   The plant will operate at a loss, forever.  Time will tell, if and when this plant ever gets built and running, and if the financial reporting is transparent and accurate.  -- end update 1. 

Roger E. Sowell, Esq.
Marina del Rey, California
copyrignt © 2016 by Roger Sowell, all rights reserved. 

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