nuclear-news

Nuclear power ” Very Disappointing “ – economists

EdF’s major shareholder, the French government, is looking to reduce the share of nuclear in France’s generation to around 50 per cent from more than 70 per cent, and intends to fill that hole with (cheaper) renewables.

EdF has effectively handballed the risk of new nuclear to consumer and the UK government. The consumer is picking up the tab through higher electricity bills, and the UK government is using taxpayers money to guarantee 65 per cent of the project cost. 

Nuclear Energy Verdict:” Very Disappointing “ Clean Technica, Giles Parkinson, 112 Nov 13 (very good graphs, diagrams) …..we have received an analysis from Deutsche Bank, which makes some other observations about the cost of nuclear, the comparisons with gas, the price of abatement, and the cost of upkeep for France’s existing fleet.

The first point made by Deutsche is that this deal underlines the fact that nuclear is not cheap, but really, really expensive – a point that should not be forgotten in Australia, where there is still a push for nuclear in some quarters despite the abundant alternatives (in particular solar) that are not available to the UK.

As we have noted in the other article, the £92.50/MWh strike price is nearly double the current average cost of generation in the UK. Deutsche takes issue with the UK government’s claim that the contract is “competitive with other large-scale clean energy and with gas’.  It notes that this contract would only be cheaper than gas generation if the crude oil price (to which UK gas is linked) averages more than $150 barrel in real terms over the next 40 years. This, says Deutsche Bank, is around 3 times the average oil price over the last 40 years, and a 50 per cent premium to the average oil price over the last 5 years……signing the proposed nuclear contract would commit the UK to buying electricity which would be expensive by historic standards.” It later describes the 35 year contract as “a poor trade for reducing risk.”

Then Deutsche Bank looks at the carbon cost of nuclear. It calculates that if the oil price were to remain at the current level of $100/barrel (in real terms), the cost of gas generation would be around £68/MWh (before paying for carbon emissions). Taking into account the amount of carbon emissions saved and the extra generation costs of nuclear, the nuclear generation comes at an implied cost of £65/tonne of carbon dioxide saved.

It notes that this carbon cost is more than ten times higher than the current traded price of carbon emissions in the EU ETS, is roughly twice the targeted level of the UK carbon price floor in 2020 set out by the Treasury in December 2011 (£30/tonne in 2009 prices), although it is less than the  £70/tonne price floor envisaged in 2030…….

EdF’s major shareholder, the French government, is looking to reduce the share of nuclear in France’s generation to around 50 per cent from more than 70 per cent, and intends to fill that hole with (cheaper) renewables.

Still, Deutsche Bank notes that EdF has effectively handballed the risk of new nuclear to consumer and the UK government. The consumer is picking up the tab through higher electricity bills, and the UK government is using taxpayers money to guarantee 65 per cent of the project cost.  With the involvement of Chinese nuclear interests, that leaves EdF with an exposure of just £3.5 billion.
http://cleantechnica.com/2013/11/09/nuclear-energy-verdict-disappointing/#3DDqsl91tRbzLge4.99

November 12, 2013 - Posted by Christina Macpherson | business and costs, France, UK