Stop Hinkley Press Release
Is nuclear new build on the wane?
There is increasing evidence that the plans by foreign companies EdF and Eon to build nuclear reactors in the West Country may be on the wane.
A fresh report by the Adam Smith Institute (1) provides some doubt over the plans of the respective companies due to changes of circumstances in their own countries.
The changes in Germany which may affect Eon's plans to build at Oldbury relate to the recent election of a centre-right wing government which supports the life extension of German reactors previously outlawed under a Green-Socialist alliance. This means they are likely to invest in their domestic market in refurbishing these reactors while also trying to reduce their £40 billion debt.
EdF who propose to build two reactors at Hinkley Point are facing a £32 billion debt and their Chief Executive was last week replaced following his request to the French Government for a 20 percent price-hike in electricity prices. President Sarkozy only permitted a two percent rise which will produce about £0.6 billion. The proposed reactors are likely to cost about £5 billion apiece.
But EdF must also consider its domestic market as half its ageing fleet of reactors is coming up for their 30 year inspection. The regulators will then licence them for the final ten years of their 40 year life. EdF is hoping to extend the licences for up to 50 and then 60 years. This would mean an upgrade as all the systems would have aged, especially the control systems.
Many of the major components have already been exchanged, see Geriatric Design Assement (2) so some may be extended, but the regulator, ASN is sure to insist on some upgrades.
Areva, EdF's partner, is possibly technically bankrupt, but for its 85% state ownership, with losses at Olkiluoto in Finland of at least Euro 3 billion and similar losses set to accrue on the two Evolutionary Pressurised Reactors (EPRs) sold to the Chinese. The UK regulatory new build team (GDA) and STUK the Finnish regulator have condemned the new control systems as being unsafe and they have to be re-designed. They have to spend further billions on the mines in Niger and Namibia in order to fuel the Chinese EPRs as part of the deal.
EdF has already stated that it will not build the UK EPRs with UK state subsidy but has asked for a platform in carbon prices which would disadvantage rival fossil fuel generators. In France it has invited E.On to share the capital cost of its reactor at Penly. And today it was announced that EdF and E.On have swapped assets in France and Germany to reduce their debt (3). No earnings will arise from new UK reactors until at least 2018 and perhaps later due to possible delays with the Control and Instrumentation systems.
If EdF pull out of new build in the UK, Centrica's 20 percent stake would become worthless due to the age of the remaining AGR reactors such as Hinkley Point B. Centrica owns British Gas.
Another issue the companies have to deal with is that the Government has indicated the fixed price they must pay to the government for decommissioning and long term nuclear waste management is much higher than the companies expected. So discussions are probably very tense on the subject.
Jim Duffy from Stop Hinkley said: "Finances are very tight for the nuclear companies who plan to build in the west-country. It's hard to see where their money will come from for these expensive projects while they have big commitments in their home countries. As EdF were hoping to get a twenty percent price rise in French electricity prices they seem to have been much too overconfident. Perhaps they also quietly expect the UK government will in due course bale them out in the same way. I don't think the public would stand for a 20 percent energy price rise for the dubious privilege of having nuclear reactors installed with all their other risks taken into account."
Jim Duffy, Stop Hinkley Coordinator