nuclear-news

Will UK taxpayers have to subsidise French nuclear company EDF?

The hidden costs of nuclear power (UK) Left Foot Forward Joss Garman, November 12th 2009 Analysis by Left Foot Forward suggests that EdF will have to pay £50 billion to build four new nuclear reactors prompting speculation that the Government will have to back down on its refusal to subsidise the industry.

Citigroup’s nuclear power report, which this blog examined yesterday, says:

• A conservative estimate for the cost of one “EPR” European Pressurised Reaction (the frontrunner nuclear reactor design favoured by the UK government) = £5 billion
• Annual increase in construction costs = 15 per cent

Estimating the start of construction as 2013 (optimistic given licensing problems with the EPR and the regulations that will need to be in place), this means three years of added costs between now and then. The net present value for one EPR in today’s money is therefore £7.6 billion.

Now consider this:

• EdF wants four EPRs at £7.6 billion = £30.4 billion
• EdF effectively paid £10 billion for British Energy (£12.5bn minus £2.5bn for a 20 per stake sold to Centrica)
• EdF have already paid around £1bn for land access to sites, scoping work etc
• Factor in decommissioning waste costs of about £500 million per reactor times four = £2 billion (this figure is very sketchy though – it could quite easily be almost anything from between 5 per cent – 50 per cent of capital costs.)So £30.4bn + £10bn + £1bn + £2bn = £43.4 billion

Effectively, this means EdF will have to pay around £45 billion for four new EPRs plus the few British Energy creaking reactors they bought recently. If they are forced to pay more for waste disposal and decommissioning the final sum could therefore be around £50 billion. And that is before you consider that EdF has a corporate debt of around £22.5 billion.

No wonder that EdF has started asking the government to intervene………………..

November 13, 2009 - Posted by Christina Macpherson | business and costs, UK | antinuclear, EDF, France, nuclear, nuclear costs, nuclear secrecy, nuclear spin