9 January 2017

Hinkley & Scotland

A report for the Scottish Greens published today (9 Jan) shows how more low-carbon power could be generated for less money by devolving control over Scottish consumers’ electricity bills. Across the UK, electricity consumers are set to pay around £16 a year for 35 years for the UK government’s new nuclear plant at Hinkley Point in Somerset but analysis by Dr David Toke, Reader in Energy Politics at the University of Aberdeen, shows that for the same amount, Scots could fund almost twice as much power from onshore and offshore wind farms. Mark Ruskell MSP, Energy spokesperson for the Scottish Greens, said: “Scotland is missing out as wind power costs fall rapidly, with some especially low prices being reported in Denmark and the Netherlands. With devolution of control over energy payments, we could achieve better value for money for Scottish consumers.”As well as not supporting the UK government’s love of nuclear with its toxic legacy, devolution of this funding mechanism would enable us to agree cheaper prices with renewable energy providers over a longer period, ending the uncertainty caused by the Tories’ anti-renewables position. The report we publish today shows how to get more low-carbon energy for less money. This merits serious consideration by both Scottish and UK governments.”

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Posted: 9 January 2017

8 January 2017


In the port of Whitehaven, a homemade banner affixed to an industrial garage confronts those arriving by train: “Save services at West Cumberland Hospital. Do not arrive D.o.A at Carlisle.” The local hospital risks losing its major trauma and maternity units – with ambulances facing a 40-mile journey in unpredictable rural traffic. Just about every shop window in Whitehaven and beyond bears a poster urging action. For the Labour party, which trails dismally in national polls, a row involving the crisis-torn NHS should be a gift, especially before a crucial byelection in the area. But right now the party cannot buy a break. The sprawling Copeland constituency, in which Whitehaven sits, is part of Britain’s self-styled “energy coast” – home to Sellafield and the proposed site of Europe’s largest nuclear power plant at Moorside. Nuclear energy is the area’s major employer and, as the Conservative party have been quick to underline, Labour’s leader Jeremy Corbyn is no fan of nuclear power. The nuclear question could be crucial in determining a contest that Labour can scarcely afford to lose. The byelection, for which no date has yet been set, has been prompted by the resignation of local MP Jamie Reed, who has gone to work for Sellafield. The loss of a formerly safe Labour seat would deepen fears that – after being all but wiped off the map in Scotland – the party is on the verge of some kind of implosion in the north of England. Copeland has already shunned Labour once, ignoring the party line and voting to leave the EU by a margin of 62%. The Tories, who squeezed Labour’s majority to just 2,564 in 2015, have not held this seat since 1935; a victory in Copeland would make them the first government to make a byelection gain since 1982. Copeland’s mayor, plain-speaking independent Mike Starkie, says the area is in desperate need of fresh thinking from central government – and that a new approach to immigration that prioritises skilled workers could be the answer. “The general perception here would be that people in Westminster don’t care about places like this,” said Starkie, who voted for Brexit. “We’ve got to be able to attract bright people from all over. The nuclear industry in Copeland employs 10,000 people directly and supports thousands more jobs in the supply chain. “If Sellafield shut tomorrow – which it can’t – we might as well lock the gates on the town,” says Starkie. Labour must convince locals that their leader doesn’t want this to happen. The problem, says Whitehaven councillor Christine Wharrier, is that “people assume Corbyn is anti-nuclear everything. There is a distrust there. They know he’s anti-nuclear weapons, so regardless of what he says about nuclear power – and he never has said he’s anti-nuclear power – it’s easy for the Tories.” “Employment at Sellafield is not at risk in any way whatsoever – it’s a decommissioning plant and those jobs will be secure for half a century,” she said. “But the Tories are playing to people’s fears. We saw the same with Brexit. People want to look after themselves and their families – and that means they’ll sometimes accept myths as fact.” Other Labour campaigners echo her concerns. “You’d be hard-pressed to find an elected Labour person in Copeland who doesn’t have a link to the nuclear industry,” said Whitehaven councillor Bill Kirkbride. “We’d have no economy otherwise. But the general view on the doorstep regarding the leader is an issue without a doubt. If they bring up the issue of Jeremy’s attitude to nuclear, we have to tell them he doesn’t write party policy. He’s entitled to his private thoughts like any MP and councillor.” Down the coast in Seascale – the windswept village that is home to Sellafield – Corbyn looms large in Tory councillor David Moore’s sights. “Labour will campaign on the NHS because they’re desperate to stay away from nuclear. Jamie Reed resigned from the shadow cabinet on the grounds of nuclear when he was elected first time around. So even the current Labour MP doesn’t trust Corbyn on nuclear. Why should local people?”

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Posted: 8 January 2017

7 January 2017


UNION leaders representing workers at Hinkley A are meeting to discuss calling a strike ballot in a row over pensions. The unions say 16,000 workers at 19 sites across the country face cuts under plans by the Nuclear Decommissioning Authority to make savings of £660 million. The unions said the Government’s expectation is that the final salary pension schemes in place across the NDA will be reformed by April 2018. Justin Bowden, GMB national officer, said: “There is no justification for this attack on the pensions of these nuclear workers and their communities.”

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Posted: 7 January 2017

6 January 2017

New Nuclear

Nuclear companies struggle with finances but solar is fast becoming the cheapest form of power everywhere. The three companies seeking to build new nuclear reactors at Hinkley Point, Sizewell, Moorside, Wylfa and Oldbury are under growing financial pressure, raising doubts about whether the UK’s nuclear renaissance will ever get off the starting blocks.

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Posted: 6 January 2017

5 January 2017

Nuclear companies struggle with finances but solar is fast becoming the cheapest form of power everywhere

The three companies seeking to build new nuclear reactors at Hinkley Point, Sizewell, Moorside, Wylfa and Oldbury are under growing financial pressure, raising doubts about whether the UK’s nuclear renaissance will ever get off the starting blocks.

The French nuclear regulator – ASN – has been investigating a growing nuclear scandal in France involving steel components made at Areva’s Le Creusot factory which have been found to contain excessive carbon levels which could make them vulnerable to cracking. There is also evidence that some of the quality-assurance documentation for some components may have been falsified. Although all French nuclear reactors which were temporarily closed as a result have now re-started, the Financial Times reports that ASN now wants to dig further into several issues before they are willing to give a clean bill of health to the French nuclear industry.

In addition, the results of an investigation by EDF at Flamanville will be delivered to the ASN in the coming weeks. The regulator will then analyse the findings and issue a report in the first half of this year. if the structural weaknesses initially found on the reactor pressure vessel are as serious as feared it could have an effect on the development of the Hinkley Point C (and Sizewell C). Any significant problems could be catastrophic for EDF as replacing this important piece of the plant would mean restarting much of the construction work, which is already billions of euros over budget and several years late. (1)

If Flamanville’s start up is delayed beyond 2020 this would be bad news for Hinkley Point C. EDF’s plans depend partly on £2bn of financing from the UK government. To take this funding and get any more there is a condition: Flamanville must be operational by end 2020 at the latest, according to an agreement with the European Commission over state aid. This last point raises questions as to whether EDF could complete Hinkley without the aid. (2)

Another planned new nuclear power station is located at Moorside, adjacent to Sellafield in Cumbria. This is being promoted by a consortium of companies known as NuGen which was originally owned by the French company GDF Suez, the Spanish company Iberdrola, and Scottish and Southern Energy (SSE). Scottish and Southern Energy (SSE) withdrew from the consortium in September 2011 and sold its stake to GDF Suez and Iberdrola. Then in January 2014 Toshiba-owned Westinghouse Electric Company agreed to buy all Iberdrola’s stake and another 10% from GDF-Suez (now called ENGIE) giving it a 60% controlling stake. The plan is to build three AP1000 reactors with a total capacity of around 3.6 GW. Nugen expects to take its final investment decision by the end of 2018.

In December it was reported that the French company – Engie – would like to abandon its 40% share of Nugen. (3) And nuclear power has turned into a financial quagmire for Toshiba. (4) Shares in the Japanese company plunged at the end of December wiping 40% off its value after an announcement that it may have to write down billions due to its acquisition of Westinghouse Electric which is struggling with 4 new reactors in the US which are late and over-budget. (5)

Horizon nuclear, is proposing to build two Advanced Boiling Water Reactors with a total capacity of 2.7MW at Wylfa on Anglesey. It expects to make its final investment decision in early 2019. (6) Horizon nuclear was originally a consortium of two German companies – Eon and RWE. Hitachi Ltd has now bought the project for about £700m in March 2012. Investing billions in new reactors would have forced a credit-rating downgrade on RWE, said Volker Beckers, CEO at RWE npower in May 2012 and Tony Cocker, CEO of E.ON UK said E.ON lacks the “financial firepower”. (7)

Horizon has now gone cap in hand to the UK and Japanese Governments. The two governments are to review investment and lending for Horizon through the Japan Bank for International Cooperation and the Development Bank of Japan. Financing of the project from the Japanese side is expected to reach Y1 trillion (£7 billion). Japan is particularly keen for the projects to go ahead after its previous attempt to export nuclear energy technology, to Vietnam, fell through. (8)  The UK Government might decide to fund up to 25% of the project according to the Telegraph. The likely cost of the proposed twin-reactor development at Wylfa has not been disclosed but a source close to the negotiations insisted a Reuters report that put the figure at £19bn was wide of the mark. (9)

The Financial Times commented that “all this comes as offshore wind progressively looks cheaper to run, even with all the subsidies, than Hinkley ever will.”  (10)  Swedish utility Vattenfall has agreed to build a giant offshore wind farm in Denmark that would sell power for €49.50 per MWh. Vattenfall has broken its own previous record of €60 per MWh. Once the cost of transmission is included this works out at around £75.50/MWh compared with £100.50/MWh for Hinkley Point C (once inflation has been added to the £92.50 at 2012 prices). (11)

The cost of solar and wind continues to fall. The World Economic Forum reports that solar and wind are now the same price or cheaper than new fossil fuel capacity in more than 30 countries. As prices for solar and wind power continue their precipitous fall, two-thirds of all nations will reach the point known as “grid parity” within a few years, even without subsidies. (12) Bloomberg reports that solar is now cheaper than coal in some parts of the world and in less than a decade is likely to be cheaper everywhere. (13)

  1. FT 4th Jan 2017
  2. FT (LEX Column) 4th Jan 2017
  3. BFM Business 7th Dec 2016
  4. Energy Collective 2nd January 2017
  5. In Cumbria 30th December 2016
  6. Telegraph 14th Feb 2016
  7. Guardian 15th May 2012
  8. Telegraph 23rd December 2016
  9. Telegraph 15th December 2016
  10. FT (LEX Column) 4th Jan 2017
  11. Energydesk 15th Nov 2016 See also Renew Economy 7th July 2016
  12. Quartz 26th December 2016 and Independent 5th Jan 2017
  13. Bloomberg 3rd Jan 2017


Posted: 5 January 2017

5 January 2017


Taxpayers may still have to guarantee up to £2 billion in cheap loans for the Hinkley Point nuclear plant despite ministerial promises to the contrary, it has been claimed. The original plan for the exchequer to underwrite loans to build the power station in Somerset was announced by George Osborne when he was chancellor in 2015. EDF had sought the government guarantee to help to ensure that the project had access to finance. Last September ministers suggested that it was no longer needed after Theresa May’s “pause” of the nuclear deal. At the time Greg Clark, the business secretary, told the Commons: “EDF has confirmed to me that it will not be taking up that £2 billion guarantee, so the taxpayer is fully insulated from the costs of construction.” A letter from EDF in September said that it did not “anticipate” using the guarantee. However, subsequent government statements suggest the possibility that it will remain on the books. In a written answer to MPs and peers in October, ministers said: “The government is confirming that it has approved the provision of a guarantee for up to £2 billion to the project for the construction of its new EPR nuclear plant in Somerset, backed by commitments from the shareholders.” In their answer in October ministers continued: “The guarantee will be available from 2018 to 2020 if necessary conditions are met and is at government’s discretion. Even if made available, and EDF have indicated to the secretary of state for the Department for Business, Energy and Industrial Strategy that it is not their current intention to take up the guarantee, I judge the likelihood of any call under the guarantee to be very low.” Labour cr iticised the development yesterday. Barry Gardiner, the shadow international trade minister, said: “The assurance that Greg Clark gave me was categoric: EDF were not taking up the guarantee. Whilst I took him at his word, it appears that the Treasury were aware the secretary of state was suffering from baroque speech. That is why the guarantee is still marked as a liability on their books.”

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Posted: 5 January 2017

4 January 2017


French watchdog deepens probes into Areva nuclear parts. Concerns about quality and documentation could have knock-on effect on Hinkley Point. Investigators are widening probes into potentially faulty nuclear reactor components made at a factory operated by Areva, the French manufacturer, after the problems contributed to multiple shutdowns of power plants this year. Julien Collet, deputy director of the ASN, France’s nuclear regulator, said he wanted to “go much further” with investigations into Areva’s components, including one probe into the falsification of documents that certified the quality of certain parts. Separately, the ASN is expected to issue a report next year about issues with components made by Areva for a new nuclear power plant at Flamanville in France. The report’s findings could have a big impact on the proposed Hinkley Point C nuclear plant in the UK, because it is due to use the same technology as Flamanville. The ASN is leading investigations into two scandals relating to Areva’s supply of components for France’s existing nuclear power stations. First, French investigators said in June that some steel components made at Areva’s Le Creusot factory – notably parts used in steam generators – had excessive carbon levels, which could make them vulnerable to cracking. Second, Areva announced in May that it had found evidence suggesting employees had doctored quality-assurance documents relating to many different nuclear reactor components made at Le Creusot for up to 40 years. Both affairs have contributed to French nuclear power plants run by EDF, the utility, being shut down. David Emond, head of Areva’s component manufacturing business, said employees at Le Creusot appeared to have altered documents relating to certain components in a way that was “unacceptable practice” from as early as 1972. He said employees would sometimes round numbers up or down – for example, about chemical levels – so that they fell within technical safety limits. Mr Emond said that the inspection of 6,000 documents, or about 2.4m pages going back to 1965, would take until the end of 2017. Currently no doctored documents had been found after 2013, but “that does not mean we will not find some next year”, he added. Mr Emond stressed that while 70 components with falsified documents had found their way into French nuclear reactors – and 120 into overseas power plants – no safety problems has so far been discovered. Beyond Areva’s potentially faulty components in France’s existing nuclear power stations, there is another – potentially even larger – issue looming. In 2014, the reactor vessel at the planned new nuclear power plant at Flamanville – which was made at Areva’s factory in Chalon/Saint-Marcel – was found to have potentially critical structural weaknesses as a result of excessive carbon levels. It is not yet known how serious these weaknesses are. The results of an investigation by EDF, which is leading the construction of Flamanville, will be delivered to the ASN in the coming weeks. The regulator will then analyse the findings and issue a report in the first half of 2017. Any significant problems with the reactor vessel could be catastrophic for EDF, however, as redoing this important piece of the plant would mean restarting much of the construction work, which is already billions of euros over budget and years late. Any further delays at Flamanville could pose significant problems for Hinkley. This is partly because the financial support package the UK government has offered for Hinkley is premised on Flamanville being operational by 2020. If Flamanville’s reactor vessel is found to be flawed, it could push back the completion date – currently scheduled for the end of 2018 – beyond 2020.

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Posted: 4 January 2017

3 January 2017


Toshiba’s audacious entry into the U.S. nuclear renaissance, once heralded as a major step forward for the industry, has turned into a financial quagmire and a potential major headache for current and future projects involving the Westinghouse AP1000 reactor. The Japanese company said this month it may have to write down billions related to an acquisition made by U.S. unit Westinghouse Electric that was completing the new generation of reactors at two U.S. facilities. The projects, directed by utilities Southern Co. and Scana Corp., are several years behind schedule and billions of dollars over budget. Westinghouse’s purchase of contractor CB&I Stone & Webster Inc. was expected to result in a settlement with the utilities regarding legal disputes over construction delays, supply chain issues for major components, and cost overruns. However, the acquisition turned out not to be a match made in heaven. Westinghouse and CB&I wound up in court over how expensive the delays will be and who should pay for them. Toshiba’s financial woes, and the rate at which it is spending down its cash reserve, put a number of current and future nuclear reactor projects at risk. Without enough cash, or credit, the question is whether the firm will be able to start new projects or finish acquiring components and services for the reactors that are under construction and take them through the final phases of regulatory approval to start operations to generate electricity. These plans include future efforts in the UK to build three Westinghouse AP1000 reactors at the Moorside project. Toshiba will not have the billions in new capital to pay for its 60% equity stake in the project nor will it have a financial profile necessary to make new investors confident enough to share the risk of building the units. Current plans to have the first unit operating by 2024 may need a new majority investors to be realized by that date. In China projects include completion of four reactors (Sanmen 1 & 2, Haiyang 1 & 2) under construction in China, and in the U.S. there are four more, two in Georgia (Vogtle) and two in South Carolina (V C Summer).

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Posted: 3 January 2017

2 January 2017


More than 450 safety lapses have occurred at Sellafield nuclear plant. Radiation and contamination episodes, spillages of active materials and fires in the facility happen regularly. The British government insists Sellafield is safe but admitted it was a “uniquely challenging” place to work. It follows a recent BBC Panoroma documentary which contained allegations of problems from past and present employees. A report from the Office for Nuclear Regulation, seen by the Irish Sun on Sunday, shows issues are routinely documented that are of concern to Ireland — if a disaster similar to Chernobyl or Fukushima occurs. It cites 12 lifting events which had “nuclear safety implications” and notes that “smouldering, smoking material or fire” was discovered five times up to March 2012. In September 2014, a “lagging blanket on high-pressure steam pipework ignited” at the plant while in July 2013, smoke was seen coming from a gas turbine. There were 24 cases of “radiation or contamination” events affecting personnel and 33 incidents involving the “unplanned leak or spillage of active or potentially active process liquor or material”, up to March 2012. Calling for the closure of Sellafield, Sinn Fein MEP Matt Carthy told the Irish Sun on Sunday: “One EU member state is putting the lives and the environment of another at risk. There is no evidence the Irish Government has ever taken this issue seriously, and it is beyond time for them to start. “It must be closed and there should be a halt to construction of any further nuclear power plants near the Irish Sea.”

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Posted: 2 January 2017

31 December 2016


SHARES in Toshiba, the prime mover behind plans for a nuclear power station in west Cumbria, have gone into freefall. Forty per cent has been wiped off the Japanese company’s value after it said on Monday that its US subsidiary, Westinghouse Electric, may have overpaid by several billions of dollars for another nuclear construction and services business. To compound matters, the company is embroiled in an accounting scandal. Its shares plunged to 259 yen (£1.81) on Thursday before staging a modest recovery on Friday. It is not clear what, if any, impact the crisis will have on plans for a £10bn nuclear power station at Moorside, Sellafield. However, the agency Moody’s has downgraded Toshiba’s ratings and warned that the writedown could affect the company’s ability to pay its debts. Toshiba holds a 60 per cent stake in Moorside developer NuGen, alongside ENGIE of France. A decision on whether to proceed with the project is due in 2018. NuGen has been seeking further backers for the scheme and is understood to have held talks about potential investment from the Korea Electrical Power Corporation.

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Posted: 31 December 2016