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Japanese energy utilities say they’re not uniting, to reduce nuclear costs

Japan’s Kansai, 3 others deny report of nuclear tie-up  Oct 28 Kansai Electric Power Co and three other energy utilities based in western Japan on Friday denied a report in the Nikkei newspaper that they are considering a tie-up in their nuclear businesses, which are struggling after the Fukushima disaster.

The Nikkei reported that Kansai Electric, Shikoku Electric Power, Chugoku Electric Power and Kyushu Electric Power were in talks to jointly rebuild old nuclear plants and run them together to cut costs. It did not cite sources.

The Nikkei added the moves could lead to a full merger of the companies’ nuclear operations as part of a realignment of Japan’s atomic power sector, which is all but shutdown nearly six years after the meltdowns at the Fukushima Daiichi plant, located in eastern Japan and run by Tokyo Electric Power .

“There is no truth to the report,” Kansai Electric said in a statement. Chugoku Electric and Shikoku Electric issued similar statements, while a Kyushu Electric spokesman also denied the report.

Japan’s industry ministry this week proposed spinning off the nuclear business of Tokyo Electric Power, as part of a possible reorganisation of the nuclear industry in the country.

Ten companies operate nuclear reactors in Japan but only two of 42 operable units are up and running, amid strong public scepticism towards nuclear power after Fukushima. Courts have also intervened to stop plants operating.

Over the years since Fukushima, the regional utilities have been hit by higher fuel costs, massive investments in upgrades to strengthen atomic plants and, since April, the opening of the retail electricity business to new competitors. (Reporting by Osamu Tsukimori; Editing by Aaron Sheldrick and Joseph Radford)

October 29, 2016 Posted by | business and costs, Japan | Leave a comment

France’s coming election helps govt to avoid nuclear plant closure decision

France avoids nuclear plant closure decision as election looms

France has delayed a decision on promised nuclear reactor decommissioning, effectively putting on hold a process that could ultimately be overturned with a change of government next year.

A government investment roadmap published on Friday stopped short of identifying reactors for closure under 2015 legislation that commits France to reducing atomic energy to 50 percent of its electrical power mix, from more than 75 percent currently.

Instead, the Energy Ministry plans leaves it to state utility EDF to issue a strategic review of plants and energy requirements around April of next year.

However, the final decision on whether the reactors are scrapped is a political one.

France goes to the polls in the first round of presidential voting in April, followed by legislative elections in June – meaning the issue looks unlikely to be resolved before a new president and assembly has been elected.

Former Prime Minister Alain Juppe, the conservative candidate currently leading the race, has called Socialist President Francois Hollande’s 50 percent target absurd and vowed to scrap it, in common with several other right-wing candidates.

Lawmaker Herve Mariton, a Juppe ally and prominent energy specialist among the conservative Les Republicains, has also rejected Hollande’s plan to close EDF’s ageing Fessenheim plant after a new reactor opens at Flamanville in 2018.

Opinion polls show conservative candidates easily defeating any potential Socialist rivals in the presidential election, which takes place in two rounds, the second due in May.

Environmental group Greenpeace said the French government was failing to implement the 2015 energy law and had betrayed last year’s Paris Climate Agreement to curb climate-warming emissions by not doing enough to support renewable energy alternatives.

In order to meet the 2015 commitment, France would have had to decide on the shutdown of 22 reactors by now, it said.

According to the energy investment plan published on Friday, a decision to close Fessenheim, France’s oldest nuclear plant, will be taken by the end of the year. The plan also pledged to almost double renewable power output to 150-167 terawatt hours (TWh) by 2030. The plan also seeks to cut nuclear power output by 10 to 65 TWh by 2023.

October 29, 2016 Posted by | France, politics | Leave a comment

The financial risks of climate change

Veteran UK banker Paul Fisher on climate change and the financial sector, Saturday Paper, 29 Oct 16  MIKE SECCOMBE
A veteran of Britain’s central bank, Paul Fisher says climate change will have a massive impact on the global financial sector. He talks about managing the risks.
Paul Fisher recently retired as deputy head of the Bank of England’s Prudential Regulation Authority, after a long career in financial markets, financial stability and monetary policy. In September 2015 the bank released a report on the risks to the financial system of dealing with climate change……
 Anybody who is a long-term asset-holder potentially is exposed to climate risk. You can divide the risks two ways; there’s physical risk if the climate does change, or as it does change, and that’s fairly easy to think about – floods or whatever. But more interestingly you’ve got the transition risk, and two things are going to happen. [First] the economy will need to restructure in order to try to minimise climate change and that will present both new opportunities for new businesses to grow, and it will be a threat to some existing business models. So you’ve got that structural change. But perhaps even more importantly you’ve got the policy change. Governments have committed to reducing climate change to below 2 degrees Celsius [and] that will evolve a whole series of policies of which we don’t know the full details yet. As those policies come through you could see the repricing of financial assets. People investing in infrastructure will find that is vulnerable to policy [change] risks. We saw a big utility company in Germany, RWE [hit by a share price plunge after Germany changed its energy policy away from coal and nuclear to more renewables]. We see the coal industry in the United States, for various reasons, collapsing. Peabody, for example.

MS It seems to me that the insurance industry, because it has a long-time horizon and takes a very actuarial approach, would be well ahead of the game on this. Is that an accurate reading?

PF In the UK that’s certainly true. The UK is one of the world’s largest insurance markets. Lloyd’s of London writes a lot of catastrophe, risk insurance, so they’ve been on this case for some time. They are experts and certainly helped the Bank of England in doing its work. The other insurers and pension funds, and savings managers generally, are also picking up on it. You are starting to see more of the bigger firms announcing investment policies to reflect climate risk. Banking, I would say, is a bit further behind, but coming along. In some countries now – China for example – if you lend to a polluting company, then you as the lender can be held to account, not just the polluter. China is one of the major forces in the world trying to get this on the agenda, which is relevant to Australia, of course, as a big exporter. Here you have big superannuation companies looking at long-term asset issues……..

Climate change is … becoming a material risk for more and more firms. If you could have taken it into account and you didn’t and the risks crystallise, you will be held to account for failing in your duties. This is the way the interpretation is going. The law is never static on this sort of thing and it will be interpreted by the courts as time goes on and more evidence mounts that if you didn’t take climate risk into account and it crystallises, you can’t expect the courts to be very sympathetic……..

MS However, Australia’s economy is particularly tied to the fossil fuel industry.

PF This isn’t about stopping the economy from growing. It’s about how we get the maximum sustainable growth rate. It’s about making people more fuel efficient. It’s about making sure energy prices properly reflect the costs that are imposed on society, not just whatever the market price would otherwise be. This isn’t anti-Australia or anti-Australian industry, it’s about what you have to do to get Australian business working on a sustainable basis … given what’s happening to the planet. A lot of people are working behind the scenes quietly with firms to try to get the right position.

MS Nonetheless, we will see a lot of stranded assets here, won’t we?

PF Possibly, but the longer it’s left and the less is done, the more of those stranded assets you get……

MS How did a scientific and economic issue become an ideological one?

PF Once it moves to the financial sector, as it has now, ideology’s out the window. This is a financial risk if you’ve got a long-term asset portfolio. Forget the ideology, do the risk analysis, otherwise you’re not meeting your responsibilities. We need to sweep the politics to one side and say this is just a commercial business risk, like any other, that we need to take into account. It’s coming, and ignoring it or pretending it isn’t there is not going to help.

October 29, 2016 Posted by | general | Leave a comment