  Dave Toke’s Blog 14th Dec 2019 There’s a bunch of highly misleading statements that the Government is to adopt so-called ‘Regulated Asset Base’ (RAB) financing of nuclear power projects.Yes, some of the mechanisms that are being proposed are also used in RAB, but the term is being grotesquely distorted to hide the fact that this is a cover for the Government risking very large sums of money to be lent to nuclear power developers.
Put simply, if the nuclear power projects are as expensive as they usually are the electricity consumer will lose an awful lot of money and prices will be jerked upwards. Either that or the
taxpayer takes a hit and funding of public services suffer big time. You can see the cover up printed in the Sunday Times yesterday where, we are told that ‘Ministers are expected to accelerate plans to introduce regulated asset base (RAB) financing, which is popular in the water and infrastructure sectors, for nuclear plants including the Horizon project’.
Under such schemes the developers are allowed to charge consumers in advance for the capital building projects. What Ministers are not emphasising of course, is that in industries such as water the Government does not lend lots of money to the privatised companies. They raise this on private markets. But in the case of nuclear power plants the bulk of the money needed to build them will be borrowed from the Government.
So if the nuclear plant has very big delays and cost overruns (as has happened to ALL nuclear power plant built in the West this century), the Government loses shedloads of money. The Treasury is likely to insist that this gets paid for by adding the (large) sums to electricity consumer bills. RAB has been used to try to finance nuclear power plant in the USA, in the states of Georgia and South Carolina recently.
The result was disaster and the developing company, Westinghouse, went bust. But this was ‘normal’ RAB where the developer takes the risk of cost overruns. But in the proposed UK
nuclear version it will be the electricity consumer who goes bust when the almost inevitable cost-overruns set in! The nuclear RAB is really a cover for a nuclear bailout. So let’s call it a ‘nuke bailout RAB’.
https://realfeed-intariffs.blogspot.com/2019/01/government-spreads-big-lie-about-rab.html |
FT 13th Jan 2019 Nick Butler: Who could blame the board of the Japanese company Hitachi if
its members decide at their meeting this week to scrap plans for a new nuclear power station at Wylfa on the North Wales island of Anglesey?
Hitachi has invested more than £840m in the project over the past six years. The technology has passed all the tests set by the UK’s nuclear regulator. But the company has been unable to get the government to put in place the clear and credible financial structure necessary to underpin the investment.
That failure has already led other investors to abandon the new plant planned at Moorside in Cumbria. Talk of scrapping the Wylfa project could be a bargaining tactic on the part of Hitachi but the reality is probably much simpler. Hitachi’s doubts have been well signalled during the
past few months and the company’s purchase of ABB’s power grid business at the end of last year gives it a range of investment choices.
Given Whitehall’s chronic indecision, the company is ready to use its capital elsewhere. Hitachi’s withdrawal would mark the collapse of the energy policy adopted in 2013 by the UK’s coalition government. Facing what were believed to be ever-rising energy prices the policy plumped for new nuclear, promising that 35 gigawatts of new capacity would be on stream by the mid 2030s – more than replacing the first generation of nuclear plants, which would by then have reached the end of their useful lives.
Because the price of gas seemed doomed to keep rising, new nuclear would come to look highly competitive over time as well as reducing dependence on imports. Since then much has changed, and the assumptions which underpinned the old policy now look laughably wrong.
The costs of all forms of energy (apart from nuclear) have fallen dramatically and there is no shortage of supply. Electricity demand is down thanks to efficiency gains and new technology.
The contract for the first new nuclear station being built at Hinkley Point in Somerset, which enjoys a guaranteed index-linked price for 35 years from the moment the plant is commissioned, looks exorbitant. The demise of Wylfa forces the need for a comprehensive review of energy policy.
Since the UK government is too busy preparing for Brexit to focus seriously on any other issue, the review should be conducted independently. Advances in energy technology offer more
possibilities each year. But those options will never be taken up unless the old outdated policy is scrapped and a more realistic approach put in place.
https://www.ft.com/content/7b33e9fa-1648-11e9-9e64-d150b3105d21
PG&E ex-CEO gets $2.5 million severance amid wildfire woes
Former PG&E CEO Geisha Williams lands $2.5 million in cash for severance pay despite being in charge during lethal wildfires of 2017 and 2018
PG&E to file for bankruptcy due to wildfire lawsuits; shares tank
Utility cites ‘challenges’ from California wildfires, East Bay Times, By LEVI SUMAGAYSAY | lsumagaysay@bayareanewsgroup.com and GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group January 14, 2019 Citing “extraordinary challenges” from the devastating 2017 and 2018 California wildfires, PG&E said Monday that it will file for Chapter 11 bankruptcy protection.
In a filing with the Securities and Exchange Commission, the utility that serves 16 million Californians gave the 15-day notice required by law for filing for bankruptcy, one day after it announced the departure of Chief Executive Geisha Williams. The company’s stock dropped by more than half Monday in response to the early-morning announcement……..
One estimate, from Moody’s Investor Services, puts PG&E’s wildfire liabilities at $15 billion but PG&E said it may face liabilities of $30 billion or more. In its filing Monday, PG&E said it is aware of about 50 complaints from at least 2,000 plaintiffs related to November’s Camp Fire and said it expects more. It also said it knows of about 700 complaints on behalf of at least 3,600 plaintiffs from the 2017 California wildfires. PG&E further stated that if it is found liable for the 2017 and 2018 fires, “punitive damages, fines and penalties could be significant.” ………
San Francisco-based PG&E’s shares plunged 52.4 percent to close at $8.38 on Monday. Since October 2017, when it first became clear that PG&E might be liable for some wildfires, PG&E’s shares have nose-dived by 88 percent……… https://www.eastbaytimes.com/2019/01/14/pge-to-file-for-bankruptcy-shares-tank/
Times 13th Jan 2019 Ministers will be forced to pioneer a new way of financing nuclear power after Hitachi walked away from a £16bn plant in north Wales. The suspension of the Japanese giant’s Horizon project on Anglesey, expected to be confirmed at a board meeting tomorrow, will force the government to lure investors with a financing method that would pile costs on to consumers, even before a plant has been built.
Japan’s nuclear rethink could derail UK energy plans, https://unearthed.greenpeace.org/2019/01/09/japan-uk-nuclear-plans-go-awry/, Doug Parr, 11 Jan 19, Reports in the Japanese press claim Hitachi is set to suspend all work on Wylfa, its nuclear power project in Wales.
Hitachi to suspend UK nuclear power ops, post $2 billion special loss https://energy.economictimes.indiatimes.com/news/power/hitachi-to-suspend-uk-nuclear-power-ops-post-2-billion-special-loss/67484807
Hitachi is set to vote on the planned suspension at its board meeting next week, the Nikkei said without citing sources REUTERS | January 11, 2019, TOKYO: Hitachi has decided to suspend its 3 trillion yen ($28 billion) nuclear project in Britain and to post a special loss of about $2 billion for the year ending March, the Nikkei business daily reported on Friday.
Hitachi is set to vote on the planned suspension at its board meetingnext week, the Nikkei said without citing sources.
The loss is expected to be 200 billion to 300 billion yen ($1.9 billion to 2.8 billion), it said.
Hitachi representatives could not be immediately reached for comment
Hitachi set to cancel plans for £16bn nuclear power station in Wales Guardian, Adam Vaughan@adamvaughan_uk-12 Jan 2019
Move by Japanese firm would be blow to UK plans to replace coal plants and ageing reactors The Japanese conglomerate Hitachi looks certain to cancel its plans for a £16bn nuclear power station in Wales, leaving Britain’s ambitions for a nuclear renaissance in tatters.
An impasse in months-long talks between the company, London and Toyko on financing is expected to result in the flagship project being axed at a Hitachi board meeting next week, according to the Nikkei newspaper.
The company has spent nearly £2bn on the planned Wylfa power station on Anglesey, which would have powered around 5m homes.
Another Japanese giant, Toshiba, scrapped a nuclear plant in Cumbria just two months ago after failing to find a buyer for the ailing project.
Withdrawal by Hitachi would be a major blow to the UK’s plans to replace dirty coal and ageing reactors with new nuclear power plants, and heap pressure on ministers to consider other large-scale alternatives such as offshore windfarms.
It would also mark an end to Japan’s hopes of exporting its nuclear technology around the world.
Hitachi and the UK and Japanese governments have been negotiating over a guaranteed price of power from Wylfa and a potentially £5bn-plus UK public stake in the scheme.
Talks have proved “tricky to find a solution that works for all parties”, industry sources said.
Unions said the prospect of Wylfa being cancelled was extremely worrying and losing two projects in such a short period “should set alarm bells ringing” about the government’s commitment to nuclear………
an insider said: “There has been a serious rift in Hitachi, and the group that said this is too large and risky an investment of Japanese capital have won out. They pointed to the uncertainty created by Brexit to say this was another reason to pull the plug.” ……….
Nuclear critics said a collapse of the scheme was not a disaster but an opportunity for a policy shift. Doug Parr, the chief scientist of Greenpeace UK, said: “We could have locked ourselves into reliance on an obsolete, unaffordable technology, but we’ve been given the chance to think again and make a better decision.”
Sara Medi Jones, the acting secretary general of CND, said: “With offshore wind now cheaper than nuclear it’s clear there is a clean and workable alternative. We just need the political will to make it happen.”
Just one new nuclear power station, EDF Energy’s Hinkley Point C in Somerset, has been given the green light and begun construction. The French company and Chinese firm CGN both want to build more. https://www.theguardian.com/environment/2019/jan/11/hitachi-cancel-plans-nuclear-power-station-angelsey-wales
State board OK’s Alliant ending nuclear power purchase, The Gazette, 11 Jan 19, Alliant Energy’s request for a settlement that will allow the utility to end its purchase of energy from Duane Arnold Energy Center has been approved.
The Iowa Utilities Board’s approval of Alliant’s request to recover a one-time $110 million payment allows the utility to end its purchase of power from the state’s sole nuclear power plant. The plant, based in Palo, is slated to shut down in late 2020 — five years sooner than the current power purchase agreement between NextEra Energy Resources and Alliant Energy.
The Iowa Utilities Board announced the settlement agreement in a Thursday news release.
Duane Arnold, which first began producing power in 1975, is about 9 miles northwest of Cedar Rapids and is one of the larger employers in Linn County. The power plant, at 3277 Daec Road, is owned by Florida-based NextEra Energy Resources……..https://www.thegazette.com/subject/news/business/state-board-approves-alliants-plan-to-close-duane-arnold-in-2020-20181213
Nikkei Asian Review 11th Jan 2019 , Hitachi to suspend all work on UK nuclear plant. Funding deadlock looks set to sink Japan’s last overseas nuclear project. Hitachi plans to put a U.K.
Japan’s Nuclear Export Struggles Narrow the Field of Suppliers, Only a handful of nations now seem capable of building new reactors, with the ability of the U.S. also in doubt. Greentech Media, JANUARY 10, 2019 Japan is struggling to find viable foreign buyers for its reactor technology in an expensive and competitive global nuclear market.
Only half a dozen nations currently have credible nuclear export capabilities. And besides Japan, the true export potential of at least two — the U.S. and France — is in doubt.
A recent report in the Japanese daily Mainichi Shimbun said a government strategy to export nuclear power technology had “run aground amid rising safety costs and deteriorating prospects for project profitability.” Proposed projects in Turkey and the United Kingdom had both hit roadblocks, the Mainichi Shimbun noted……..
Also, and perhaps more importantly, Japanese nuclear vendors are not state-owned like developers from China, Russia and South Korea. That puts Japanese firms at a disadvantage in terms of accessing finance and accepting risk.
These problems are not restricted to Japanese firms, though. They also apply to U.S. vendors.
Struggles in the U.S. nuke sector
While Japanese nuclear is at least enjoying something of a gradual recovery at home, with nine reactors back online after Fukushima and a further 17 looking to restart, in the U.S. the domestic sector is a mess.
This month saw Dominion Energy absorbing Scana Corporation after the latter failed to keep construction of two reactors at the Virgil C. Summer Nuclear Generating Station afloat.
A little over 100 miles away, Georgia state lawmakers have expressed concerns that a couple of new reactors at the Alvin W. Vogtle Electric Generating Plant, which are already half a decade behind schedule, could see further delays.
Six reactors out of a total of 104 have shut down across the U.S. since 2012, according to the Center for Climate and Energy Solutions, and a further 13 are due to close before 2025.
Meanwhile, a 2017 study by the Massachusetts Institute of Technology found two-thirds of U.S. nuclear power capacity could become unprofitable over the next few years.
When publicly owned U.S. nuclear developers do not even have a viable domestic market to play in, it is hard to see how they might compete overseas. There are efforts underway to revive the U.S. nuclear industry, but industry advocates say much more support is needed.
U.S. nuclear export prospects are thus beginning to look a lot like those in Japan — and also those in France, which has been struggling to launch its Evolutionary Power Reactor technology. Like the U.S. and Japan, France seemingly has little appetite to attach state guarantees to nuclear projects abroad……
https://www.ecowatch.com/nuclear-power-cost-renewables-2625524662.html, By Grant Smith, 9 Jan 19,
Resona bans lending to those developing, making or possessing nuclear weapons https://mainichi.jp/english/articles/20190107/p2a/00m/0bu/024000c, January 7, 2019 (Mainichi Japan) TOKYO — Resona Holdings Inc., a major financial group in Japan, has announced a policy of not extending loans to borrowers that are involved in the development, production or possession of nuclear weapons.
The statement, the first of its kind by a major Japanese banking institution, came amid similar moves by an increasing number of European banks and institutional investors following the adoption at the United Nations of the Treaty on the Prohibition of Nuclear Weapons in 2017.
Whether other Japanese corporations will follow Resona’s action is a focus of attention for the future. There were other lenders banning loans for the production of nuclear weapons, but the Resona policy prohibits any loans to such companies even when such transactions are for non-nuclear related purposes.
The new posture was incorporated in a document titled “Efforts toward socially responsible investment and loans,” which was announced in November last year. According to the paper, Resona refuses to lend to those that are associated with the development, production or possession of weapons of mass destruction, such as nuclear, chemical and biological weapons, or inhuman weaponry including antipersonnel mines and cluster munitions.
Entities that can be subject to relevant restrictions or sanctions, or even those with the potential to be hit with such punitive measures, will be rejected as borrowers, the document says.
An official with Resona, which has never lent to companies making nuclear weapons, explained that the banking group decided to introduce the policy “because we thought it important for providers of funds to make such efforts toward a sustainable society.”
According to the Dutch nongovernmental organization PAX, 63 financial institutions had similar lending policies as of October 2017, an increase of nine from the previous year.
A Mainichi Shimbun poll of four Japanese mega banks — Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, Mizuho Financial Group and Sumitomo Mitsui Trust Holdings — as well as four major life insurance companies — Nippon, Dai-ichi, Meiji Yasuda and Sumitomo — found that all of the eight companies and groups have policies to refrain from lending and investment over inhuman weapons. Yet the entities did not specify the production of nuclear weapons as a condition to disengage from borrowers.
Officials at Sumitomo Mitsui and Mizuho replied that their companies ban loans to be used in the production of nuclear weapons, while a Mitsubishi UFJ official explained that the company is “making careful judgment in each transaction.”
(Japanese original by Satoko Takeshita, Business News Department)
Japanese gov’t plan to export nuclear power technology floundering, January 4, 2019 (Mainichi Japan) (Japanese original by Takayuki Hakamada and Ryo Yanagisawa, Business News Department) TOKYO — The Japanese government’s strategy to export nuclear power technology has run aground amid rising safety costs and deteriorating prospects for project profitability. While the government has aimed to maintain the country’s nuclear technology and expert resources through construction of atomic reactors abroad amid stalled nuclear plant development at home, its projects with Turkey and Britain have both hit snags.
“The Turkish government is in the midst of evaluating the project. I believe it will respond to us in some way or other,” said Shunichi Miyanaga, president of Mitsubishi Heavy Industries Ltd., in mid-December about a plan to build a nuclear power plant in Sinop, northern Turkey. Miyanaga’s comment suggested that the fate of the project had been left up to the Turkish government.
At the end of July last year, Mitsubishi Heavy told the Turkish government that the cost of the project would total somewhere around 5 trillion yen, more than doubling from the original estimate of roughly 2.1 trillion yen. As the plan envisages recovering the costs through profits from power generation at the nuclear facility, it would not become profitable unless Turkey purchases the generated electricity at a higher price than originally expected. If Turkey does not comply with the increased burden, Japan would withdraw from the plan.
The nuclear plant project was pitched by Prime Minister Shinzo Abe to then Turkish Prime Minister Recep Tayyip Erdogan in 2013. At the time, Abe vowed at a press conference in Ankara, “We will share our experiences and lessons from the (2011) disaster at the nuclear plant (run by the Tokyo Electric Power Co. in Fukushima) with the rest of the world, and will strive to contribute to enhancing the safety of nuclear power generation.”
However, the catastrophe prompted the international community to turn a wary eye toward nuclear power, leaving the costs for safety measures at nuclear plants to swell. The steep fall in the Turkish lira over the past year by more than 30 percent also added to the project’s deteriorating profitability.
Under these circumstances, Tokyo plans to propose to Ankara that it would provide comprehensive energy cooperation in such spheres as coal-fired thermal power generation and liquefied natural gas, in place of the atomic plant project. Because the nuclear power project is based on an agreement struck by both leaders, such a proposal by Tokyo could face a backlash from Ankara, but Japan’s focus is already shifting to how to withdraw from the project without undermining bilateral diplomatic ties with Turkey.
Meanwhile, a nuclear plant construction project undertaken by Hitachi Ltd. on the Isle of Anglesey in central Britain has also run into rough waters, after the project’s costs soared to approximately 3 trillion yen, about 1.5 times the initial estimate.
n May last year, Hitachi Chairman Hiroaki Nakanishi held talks with British Prime Minister Theresa May, where the latter agreed to expand her government’s support for the project. However, British citizens have been wary of the scheme out of concern that it could lead to rising electricity bills should Japan’s request to raise the sale price of electricity be accepted.
As the May administration is suffering from sagging approval ratings amid turmoil over Britain’s exit from the European Union, it is becoming increasingly difficult for London to comply with an increased burden. At home, Japanese companies are also becoming more reluctant to invest in the project out of fears of poor profitability and accident risks. Given the circumstances, Tokyo is also likely to exit the project.
The Abe administration has made the export of nuclear power technology a pillar of its growth strategy, but to little avail thus far. While the government intends to pursue measures to counter China and Russia’s aggressive drive to export nuclear plants by stepping up financial support for partner countries and through other measures, such a strategy may end up bringing more harm than good………..
a senior official of an economy-related government body said, “It is difficult for Japanese manufacturers, which can’t even build nuclear plants in their own country, to win confidence (abroad),” suggesting that the government’s strategy to export nuclear power technology in itself is unreasonable.
https://mainichi.jp/english/articles/20190104/p2a/00m/0bu/030000c
26 April – Chernobyl: Inside the Meltdown airs on National Geographic on Sunday 26th April from 4pm
29 April – Nuclear Expert Webinar #1 – Radiation Impacts on Families with Mary Olson and Cindy Folkers
4 May -West Suburban Peace Coalition to discuss Iran war at May Educational Forum
Monday, May 4, 7:00 – 8:00 PM Central Standard Time
Title: : How Trump’s Narrative Tries to Shape the Reality of the War on Iran.
Contact Walt Zlotow, zlotow@hotmail.com 630 442 3045 for further information
14 May – online event From Bombs to Data Centres: the Face of Nuclear Colonialism
Pine Ridge Uranium is the real threat, not Tehran- Tell Burgum: Stop the Extraction.
Chernobyl: The Lost Tapes – A good documentary on Chernobyl on SBS available On Demand for the next 3 weeks– https://www.sbs.com.au/ondemand/tv-program/chernobyl-the-lost-tapes/2352741955560
To see nuclear-related stories in greater depth and intensity – go to https://nuclearinformation.wordpress.com
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