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The News That Matters about the Nuclear Industry

Dash for gas — and move on from nuclear power folly FT

Full article here
https://www.ft.com/content/2a2d94a8-f461-11e6-95ee-f14e55513608

…….. after another grim week for the nuclear industry, it seems those stickers may have been right after all. …….. Even the eye-watering guarantee from the UK taxpayer for Hinkley Point C is not enough to cover the risk that building it will bankrupt EDF. Toshiba’s woes have claimed the scalp of its president. ……… but the combination of ever-rising safety demands and cheap hydrocarbons has destroyed its economics. Appealing for fresh state aid looks like a desperate last throw of the nuclear dice. If an industry cannot finance its own projects after half a century of development, it may be time to try another industry. Fortunately, other industries are available. The cheapest and quickest fix is to build gas-fired power stations, …….Unfortunately, the artificial barriers imposed by today’s energy policy are preventing this subsidy-free solution. For the longer term, the price of solar energy continues to fall and smart meters that really are smart will start managing the demand side of the equation. Even offshore wind looks a better bet than nuclear as battery technology evolves. Instead, we have a cat’s cradle of subsidies to generate electricity and, through grants for electric cars, subsidies to use more of it. This was self-evidently stupid, even before the impact of the seismic changes across the Atlantic, ……… Abandoning nuclear means facing reality on the likely path of future carbon dioxide emissions……………….

Quite right, quite meaningless

So, Rolls-Royce. A £4.6bn loss and an unchanged dividend. Something wrong here, surely? Aren’t dividends supposed to reflect what the company earns, rather than some sort of semi-obligation? Ah well, you see, £4.4bn of the loss is a writedown of currency hedging, not cash at all, merely a bookkeeping exercise to trim the hedges to their market height after the fall in sterling. It’s as if you had to set a fall in the value of your house against your income. The accounting rules oblige Rolls to do this and thus, as the profit and loss account becomes more and more accurate, it means less and less.

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February 17, 2017 - Posted by | Uncategorized

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