Russia extends $11.38 bln loan to Bangladesh to build nuclear power plant http://tass.com/economy/925025 January 13 Bangladesh will repay the actually spent loan in equal six-month installments over a twenty year period MOSCOW, January 13. /TASS/. Russia’s government has extended a $11.38 billion loan to Bangladesh to build the Rooppur nuclear power plant. The relevant document was published on the government’s website containing legal information.
According to the draft inter-governmental agreement, the loan will be used from 2017 to 2024. Bangladesh will repay the actually spent loan in equal six-month installments over a twenty year period. The first installment will be paid out on March 15, 2017.
Two units of the Rooppur nuclear power plant, with a capacity of 1,200 MW each, which are being built with Russia’s assistance, are planned to be put into operation in 2022 and 2023.
In mid-December 2015, Russia’s Rosatom State Atomic Energy Corporation signed an EPC contract for a nuclear power plant in Bangladesh.
The construction work is being done in accordance with the inter-governmental agreement on cooperation in building a nuclear power plant in Bangladesh, dated 2011. The nuclear power plant will be located on the eastern bank of the Ganges River, 160 kilometers from the country’s capital of Dhaka.
January 14, 2017
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ASIA, marketing, Russia |
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EU clears French rescue of troubled nuclear firm Areva http://www.business-standard.com/article/pti-stories/eu-clears-french-rescue-of-troubled-nuclear-firm-areva-117011001343_1.html AFP | Brussels January 10, 2017 EU anti-trust regulators today cleared the French government’s massive restructuring of troubled state-owned nuclear reactor builder Areva.
Problem-prone Areva, which is 87-per cent owned by the French state, has faced severe difficulties since 2011, when the Fukushima disaster in Japan called nuclear power generation into question across the world.
In April, Paris notified the
EU Commission of an big restructuring plan to save the national champion that included a massive payout from public coffers.
“The European Commission has concluded that French plans to grant a capital injection of 4.5 billion euros (USD 4.75 billion) to Areva are in line with EU state aid rules,” a statement said.
The Commission added that other regulatory decisions were still needed, including a greenlight by the EU on the buyout of Areva’s reactor business by EDF, the French state-owned electricity supplier. Areva’s woes were compounded by construction problems affecting its first EPR reactor in Finland — now expected to open nine years late in 2018 — putting company finances deep into the red.
In addition, Areva’s former CEO Anne Lauvergeon has been charged in a case linked to the company’s disastrous 2007 purchase of a Canadian uranium mining firm.
EDF, also majority-owned by the French state, agreed in June 2015 to purchase up to 75 per cent of Areva’s reactor unit at a valuation of around 2.7 billion euros, with the deal expected to be finalised in 2017.
France sees nuclear energy as a key national industry and the government has been closely involved in talks to restructure the sector.
The French state has already poured in billions to keep Areva afloat and thousands of French workers in their jobs.
January 14, 2017
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business and costs, EUROPE, politics |
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Delays of years in construction times and the doubling of costs, are the new normal, while the prices of low-carbon alternatives, wind and solar, which can be deployed in weeks rather than decades, have continued to fall. It is now clear that solar farms and wind turbines produce cheaper power than new nuclear will ever be able to. In some cases even old nuclear stations are so costly to run that new wind and solar are cheaper.
Nuclear Revival Looks Bleak as Solar and Wind Costs Continue to Drop http://www.ecowatch.com/nuclear-revival-bleak-2188785870.html Climate News Network By Paul Brown, 12 Jan 17
The prospects for expansion of the nuclear industry worldwide look worse in 2017 than at any time since the first atom stations were built in the 1950s.
Toshiba, the giant Japanese company that owns the American reactor designer Westinghouse, is the latest company to face financial difficulties due to unforeseen cost overruns and delays that run into billions of dollars.
Westinghouse Electric’s troubles began after it bought construction contractor CB&I Stone & Webster and then had to write down the value of the acquisition by billions of dollars because of problems with building four new reactors for U.S. utilities.
Nuclear Problems
Électricité de France (EDF), the French company with ambitious plans to build four nuclear reactors in Britain, is in ever-deepening financial difficulties because it has failed to build new stations on time or on budget at Olkiluoto, Finland and Flamanville, in France. It is also embroiled in an ongoing scandal over faulty reactor parts.
Even Rosatom, the state-owned Russian company, keen to expand sales outside its own borders, is pegging back on its building plans at home. Alexander Lokshin, the first deputy director general, said on the company’s website that, because forecasts of energy use growth in Russia have proved to be inaccurate, the company had settled for life extensions of existing plants rather than a large program of building new ones.
While China and India continue to press ahead with nuclear projects, both countries are putting ever-greater effort into renewables, which provide much quicker returns. China has cut back on nuclear plans, but is continuing to build both its own home-grown designs and two reactors of EDF’s new design, which are still under construction although they should already be in operation.
South Korea seems to be the one bright spot for the industry. It now has 25 working reactors and is building more—including exporting four to be built at Barakah in the United Arab Emirates.
So while there are still plenty of reactors planned or under construction, they appear to be running late and over budget or are in countries where state ownership and subsidy props up the industry and disguises its flaws.
The industry is in most trouble in countries where nuclear has to compete on price with renewables and gas. Raising enough capital to build a nuclear station at market rates is no longer possible without state subsidy. In the European Union and the U.S., where a “free market” in electricity is supposed to prevail, government moves to boost the nuclear industry are increasingly controversial.
However, there are unlikely to be any bankruptcies. The governments of Japan, France and Britain will bail out these flagship companies because they employ far too many voters to let them fail. In addition, closing existing nuclear stations rapidly is technically difficult and would cause serious blackouts in France and possibly some neighboring countries.
But hopes of a nuclear renaissance now appear to be a pipe dream. This is partly because western companies have apparently failed to design new nuclear power stations that can be built on time and on budget.
Delays of years in construction times and the doubling of costs, are the new normal, while the prices of low-carbon alternatives, wind and solar, which can be deployed in weeks rather than decades, have continued to fall. It is now clear that solar farms and wind turbines produce cheaper power than new nuclear will ever be able to. In some cases even old nuclear stations are so costly to run that new wind and solar are cheaper.
Future of the Industry
The outcome of all this financial turmoil for the future of the industry is difficult to predict. It is probable that stations long under construction in the U.S., Finland, France and China, and due to be finished in the next two years, will be completed if no new technical problems arise. Starting them up will probably be a political rather than an economic decision.
But whether these companies embark on planned new constructions is the real issue. EDF continues with plans to build four European Pressurised Reactors in England, two at Hinkley Point in western England, which are supposed to be completed by 2025, and two more at Sizewell, east of London, where plans are still at the consultation stage. How the deeply indebted company will raise the finance for these projects is not clear.
Toshiba’s financial plight puts another British project, the plan to build three Westinghouse AP1000 reactors in north-west England, in jeopardy. With the company’s debts close to its value in equity, the company credit rating has been lowered. It is hard to see who will put up the enormous capital required to finance the building of three new reactors with designs that already have a dubious record on building times and cost overruns.
These seven giant reactor projects are the first of 10 planned for Britain. So far there has not been the slightest hint from either the companies or the UK government that the plans might need revision. Time will tell whether anyone will come up with the $50 billion in capital needed to build them.
January 13, 2017
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2 WORLD, business and costs, renewable |
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Global Photovoltaic Installation Market to Grow Nearly 11% through 2018 http://www.solarnovus.com/global-photovoltaic-installation-market-to-grow-nearly-11-through-2018_N10603.html 12 January 2017– Transparency Market Research announces the release of a new report titled “Solar Photovoltaic (PV) Installation Market Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2012 2018”. According to the report, the global solar photovoltaic installation market is anticipated to expand at a 10.70% CAGR from 2012 to 2018 to reach a value of US$145.9 bn by 2018.
Solar photovoltaic is an excellent source of renewable energy that presents higher efficiency output. This is a key factor driving the solar photovoltaic installation market. In addition, wide range of applications in different sectors, the rising awareness regarding the reduction of carbon footprint, government initiatives and schemes, low cost of installation and maintenance, and constantly evolving technologies have also driven the global solar photovoltaic installation market over the years. Asia Pacific presents strong potential for growth, according to the report. On the down side, limited life of batteries, wet climate in certain regions deteriorating the quality of solar panels, revised feed in tariffs, irregular intensities of solar radiations, and oversupply conditions in certain regions are some of the major challenges that the solar photovoltaic installation market faces.
In order to give readers a better understanding of the scope and dynamics of the solar photovoltaic installation market, the report studies the overall market by segmenting it on the basis of grid type, application, technology, and geography. Based on grid type, the solar photovoltaic installation market is bifurcated into off-grid solar PV and grid-connected solar PV. By technology, the market is segmented into thin film solar PV, crystalline silicon solar PV, and others such as organic solar PV and concentrator PV.
On the basis of application, the solar photovoltaic installation market is categorized into utility scale, commercial, and residential solar PV systems. The use of solar photovoltaic installations in the commercial and residential sectors has risen substantially over the past few years, with major installations in hotels, offices, and hospitals.Geographically, the global solar photovoltaic installation market is divided into Europe, the Middle East, and Africa (EMEA), Asia Pacific, North America, and the Rest of the World. Europe currently dominates the worldwide solar photovoltaic installation market. Asia Pacific is anticipated to witness considerable growth over the next three years owing to rising demand for solar PV systems in countries such as Japan, China, and India.
The research report features a detailed section on the competitive landscape of the solar photovoltaic installation market. Key players are identified and reviewed based on key criteria such as business overview, financial standing, recent developments, and business strategies. With the help of SWOT analysis, the strengths, weaknesses, opportunities, and threats of the major players are discussed. In addition, Porter’s Five Forces give readers a clear understanding of the impact of buyers, suppliers, competitors, substitutes, and new entrants on the overall vendor landscape.
The noteworthy players competing in the global solar photovoltaic installation market include Yingli Green Energy Holding Co. Ltd., Solar World AG, Trina Solar Ltd., Sun Power Corporation, Suntech Power Holding Co. Ltd., Jinko Solar Holding Company Ltd. Corporation, Schott Solar AG, Canadian Solar Inc., First Solar Inc., Solar Frontier Ltd., and Sharp Corporation.
January 13, 2017
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2 WORLD, business and costs, renewable |
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Toshiba Loses Billions On U.S. Nuclear Write-Offs http://oilprice.com/Alternative-Energy/Nuclear-Power/Toshiba-Loses-Billions-On-US-Nuclear-Write-Offs.html By Leonard Hyman & William Tilles – Jan 11, 2017 As a sort of financial casino, Wall Street permits its customers to indulge in all sorts of financial risk. Short selling, for example, betting on a stock’s decline as opposed to its rise. If you short at $10 and it goes to $2? Awesome. If it instead goes the other way, from $2 to $10, you just lost 5 times your principal.
But how can you lose several billion dollars, or ten times your principal investment, on a U.S. asset that you bought for $220 plus million? That’s the question that Toshiba executives are asking themselves.
The goodwill write off triggering this financial commotion relates to cost overruns at two U.S. nuclear construction sites, V.C Sumner and Vogtle in Georgia.
Toshiba, a titan of Japanese industry and owner of Westinghouse Electric dropped a bombshell on the stock market at the end of December and its stock fell by one third. The bond agencies cut Toshiba’s ratings, analysts wondered if the company would have any equity left and sources claimed that Toshiba was thinking of selling its most valuable subsidiary in order to fill the hole in its balance sheet.
This announcement comes in the wake of a previous accounting scandal in which Toshiba was accused of inflating profits. After that, Toshiba seemed ready to raise more equity capital but held off. Now it looks as if the company will have to raise more money on even more dilutive terms for existing shareholders.
What prompted the sudden announcement and what does that announcement mean to the nuclear sector? Let’s go back to 2015. In that year, Toshiba’s Westinghouse subsidiary bought Stone & Webster (S&W), the nuclear construction and services company, from Chicago Bridge & Iron (CBI). It paid $229 million in cash for S&W, and estimated that goodwill, subject to writeoff, was under $87 million, with that number to be determined by December 31, 2016. Near the end of December, Westinghouse informed its corporate parent, Toshiba that “the cost to complete U.S. projects will far surpass the original estimates…leading to a possible recognition of goodwill far exceeding the original…estimate…current estimation shows a level of…several billion U.S. dollars….”
Toshiba is one of a handful of nuclear engineering and manufacturing firms in the world. Its Westinghouse unit produces one of the approved designs (AP 1000) for U.S. construction. Toshiba also owns one of the nuclear construction sites in the UK. If a firm of this size and expertise is surprised by the cost of nuclear construction, that is not a good sign.
But from a financial perspective, if a firm of Toshiba’s size, and one of the premier nuclear engineering firms in the world, is in financial straits due to nuclear overruns, just how big and how accurate in project costing does a firm need to be to take on the risks of nuclear construction? Due to the size of the projects, no small firm can ever take them on. But will the point come when not even large firms execute a nuclear project unless an even larger entity, such as the federal government or the ratepayers over a wide area, guarantees payment of all cost overruns?
Toshiba’s difficulties may reverberate beyond Tokyo’s financial district. They call into question the ability of the most expert of firms to evaluate the risks of what has become bespoke nuclear construction. That will raise costs for new nuclear power since paying a return “of and on” capital is still its biggest cost.
January 13, 2017
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business and costs, Japan, USA |
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France, which owns 87% of Areva, said it would offer €4.5 per Areva SA share to minority investors which include Kuwait’s investment fund and French energy group Total Paris: France will buy out minority shareholders in Areva and delist the troubled nuclear group, the government said on Wednesday as talks with potential investors in a new nuclear fuel company being spun out of Areva neared a conclusion.
The state, which owns 87% of Areva, said it would offer €4.5 per Areva SA share to minority investors which include Kuwait’s investment fund, French utility EDF and French energy group Total.
Areva’s shares have fallen by as much as 90% from their 2007 highs as the group chalked up repeated losses. The stock was suspended on Tuesday at €5.2.
European Union (EU) antitrust regulators approved the French government’s plan to inject €4.5 billion ($4.8 billion) into Areva on Tuesday, saying the rescue would not unduly distort competition.
The ruling will allow Areva, whose capital has been wiped out by years of losses, to restart as a smaller firm focused on uranium mining and nuclear fuel production and recycling.
Legacy Areva SA—the firm left over after this split and the sale of Areva’s reactor unit to state-controlled EDF—will get a €2 billion capital increase and will hold the liabilities related to the troubled Olkiluoto 3 project in Finland, which has been hit by delays.
Areva said negotiations with unspecified investors in the new company were being finalised. It said last month that two investors have made a €500 million ($526.40 million) offer for a combined 10% stake in the new entity.
Paris: France will buy out minority shareholders in Areva and delist the troubled nuclear group, the government said on Wednesday as talks with potential investors in a new nuclear fuel company being spun out of Areva neared a conclusion.
The state, which owns 87% of Areva, said it would offer €4.5 per Areva SA share to minority investors which include Kuwait’s investment fund, French utility EDF and French energy group Total.
Areva’s shares have fallen by as much as 90% from their 2007 highs as the group chalked up repeated losses. The stock was suspended on Tuesday at €5.2.
European Union (EU) antitrust regulators approved the French government’s plan to inject €4.5 billion ($4.8 billion) into Areva on Tuesday, saying the rescue would not unduly distort competition.
The ruling will allow Areva, whose capital has been wiped out by years of losses, to restart as a smaller firm focused on uranium mining and nuclear fuel production and recycling.
Legacy Areva SA—the firm left over after this split and the sale of Areva’s reactor unit to state-controlled EDF—will get a €2 billion capital increase and will hold the liabilities related to the troubled Olkiluoto 3 project in Finland, which has been hit by delays.
Areva said negotiations with unspecified investors in the new company were being finalised. It said last month that two investors have made a €500 million ($526.40 million) offer for a combined 10% stake in the new entity.
A person familiar with the situation said the two investors are Japan’s Mitsubishi Heavy Industries and JNFL. Talks are continuing with China’s National Nuclear Corporation about also taking a minority stake.
“These talks are continuing and focus on governance issues, and on the issue of the balance between the different third-party investor parties,” French industry minister Christophe Sirugue told Reuters in an interview.
Sirugue, who said he had discussed the governance issue with Chinese vice-premier Ma Kai during his visit to France in November, added that the make-up of the board of the new company is another important issue in the talks. Reuters
January 13, 2017
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business and costs, France, politics |
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Generators call New York nuclear subsidies an ‘existential threat’ to wholesale markets, Utility Dive by Robert Walton @TeamWetDog 12 Jan 17
Dive Brief:
January 13, 2017
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business and costs, Legal, USA |
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China Is Building Britain ANOTHER Nuclear Reactor, Daily Caller ANDREW FOLLETT Energy and Science Reporter 12 Jan 17 Britain’s nuclear regulators are considering whether another Chinese-funded and designed nuclear reactor should be built in Bradwell, Essex.
The reactor would be funded and designed by the state-controlled China General Nuclear Power Corporation (CGN) and the French power company Électricité de France (EDF). It could take British authorities up to four years to formally approve or reject the new reactor.
“The robust independence of the UK’s regulators is seen across the world as a key strength for nuclear in Britain,” Zhu Minhong, General Manager of CGN in Britain, told Reuters. “CGN and EDF will bring to this enterprise their joint experience in China, Britain and France over many years.”
The U.K.’s previous attempt to build a nuclear power plant with the exact same Chinese company didn’t got well.
British Prime Minister Theresa May almost cancelled a previous China-backed nuclear power plant at Hinkley Point due to its high costs and environmentalist opposition. The U.S. charged the Chinese company behind the Hinkley Point plant with nuclear espionage in August.
A columnist for a Chinese state-run media outlet called May’s reluctance to approve of the Hinkley Point nuclear power project a result of “China-phobia.” CGN agreed to pay about $8 billion of the reactor’s $24 billion dollar cost.
China’s ambassador to Great Britain issued an ultimatum over the delay earlier in August, pointing out Chinese companies have invested more in the U.K. over the past five years than in France, Germany and Italy combined.
EDF agreed in July to build the Hinkley Point nuclear reactors by 2025 after years of delays. If the reactors aren’t built, U.K. taxpayers could be on the hook for $31.6 billion, according to documents released by the government. EDF is still planning to build the reactors, despite the company’s serious financial problems and the fact that the project is below investment grade.
EDF previously delayed making a decision about Hinkley Point several times before finally approving it after already investing $2.85 billion. EDF is more than $40 billion in debt and has a history of abandoning or delaying similar reactors in France……. http://dailycaller.com/2017/01/10/china-is-building-britain-another-nuclear-reactor/#ixzz4VZwv59yK
January 13, 2017
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business and costs, China, politics, UK |
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Toshiba may face still heavier losses in U.S. nuclear business: source http://www.japantimes.co.jp/news/2017/01/12/business/corporate-business/toshiba-may-face-heavier-losses-u-s-nuclear-business-source/#.WHfi9NJ97Gg KYODO Toshiba Corp. anticipates that total losses at its nuclear business in the United States could be larger than earlier stated due to a write-down at its subsidiary Westinghouse Electric Co., a source familiar with the matter said Wednesday.
The development may further taint the financial standing of the company that has been battling to overcome a massive window-dressing scandal.
Toshiba is finalizing the size of an impairment loss at Westinghouse, which could reach tens of billions of yen, ahead of the release of its group earnings report for the April to December period in mid-February, the source said.
Last month Toshiba said it may need to write down the value of assets at CB&I Stone & Webster Inc., a nuclear plant builder Westinghouse obtained in 2015, possibly by several hundred billion yen.
Toshiba believes the devaluation of CB&I Stone & Webster may have seriously undermined the value of Westinghouse, the source said.
The source said Toshiba estimated the final write down in connection with U.S. nuclear plant operations may reach up to ¥500 billion as of the end of last year, but the total amount could change as the company combed through their financial data.
Toshiba has been focusing on nuclear energy operations as its core business but has been struggling to win orders for new power plants both at home and abroad, particularly after the 2011 Fukushima nuclear disaster.
The company booked an impairment loss of about ¥250 billion in its U.S. nuclear business in the last fiscal year through March 2016.
January 13, 2017
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British nuclear weapons workers to go on strike over Atomic Weapons Establishment pensions dispute The Independent, 12 Jan 17 Staff manufacture and maintain nuclear weapons including the Trident programme Lizzie Dearden @lizziedearden Employees responsible for manufacturing and maintaining the UK’s nuclear weapons are to go on strike.
Workers at the Atomic Weapons Establishment (AWE) are to stage two 48-hour walk-outs as part of a long-running dispute over pensions.
Unite said 600 of its members, who work as managers, craft and manual workers at the AWE’s two sites at Aldermaston and Burghfield in Berkshire, will strike on 18 and 30 January.
A spokesperson said workers felt “deeply betrayed” by promises made decades ago guaranteeing their pensions, when they were transferred from the Ministry of Defence (MoD) to the private sector, being broken………
“The four days of strike action later this month are not being taken lightly. It is not a ‘political’ strike, but one taken reluctantly by our members who have no desire to see thousands of pounds wiped off their retirement incomes.”
Unite claimed new pensions proposals, which would see the AWE’s pension contributions lowered, violated pledges made in a ministerial statement to the Commons in the 1990s. The AWE, owned by a consortium of Lockheed Martin, Jacobs Engineering and Serco, is contracted by the MoD to build and maintain nuclear warheads for Royal Navy submarines. http://www.independent.co.uk/news/uk/home-news/british-nuclear-weapons-factory-workers-berkshire-go-on-strike-prospect-union-awe-atomic-weapons-a7523516.html
January 13, 2017
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Nuclear Energy Dangerous to Your Wallet, Not Only the Environment http://www.counterpunch.org/2016/01/01/nuclear-energy-dangerous-to-your-wallet-not-only-the-environment/ Pete Dolack writes the Systemic Disorder blog and has been an activist with several groups. His book, It’s Not Over: Learning From the Socialist Experiment, is available from Zero Books.
by PETE DOLACK The ongoing environmental disaster at Fukushima is a grim enough reminder of the dangers of nuclear power, but nuclear does not make sense economically, either. The entire industry would not exist without massive government subsidies.
Quite an insult: Subsidies prop up an industry that points a dagger at the heart of the communities where ever it operates. The building of nuclear power plants drastically slowed after the disasters at Three Mile Island and Chernobyl, so it is at a minimum reckless that the latest attempt to resuscitate nuclear power pushes forward heedless of Fukushima’s discharge of radioactive materials into the air, soil and ocean.
There are no definitive statistics on the amount of subsidies enjoyed by nuclear power providers — in part because there so many different types of subsidies — but it amounts to a figure, whether we calculate in dollars, euros or pounds, in the hundreds of billions. Quite a result for an industry whose boosters, at its dawn a half-century ago, declared that it would provide energy “too cheap to meter.”
Taxpayers are not finished footing the bill for the industry, however. There is the matter of disposing radioactive waste (often borne by governments rather than energy companies) and fresh subsidies being granted for new nuclear power plants. None of this is unprecedented — government handouts have the been the industry’s rule from its inception. A paper written by Mark Cooper, a senior economic analyst for the Vermont Law School Institute for Energy and the Environment, notes the lack of economic viability then:
“In the late 1950s the vendors of nuclear reactors knew that their technology was untested and that nuclear safety issues had not been resolved, so they made it clear to policymakers in Washington that they would not build reactors if the Federal government did not shield them from the full liability of accidents.” [page iv]
Nor have the economics of nuclear energy become rational today. A Union of Concerned Scientists paper, Nuclear Power: Still Not Viable Without Subsidies, states:
“Despite the profoundly poor investment experience with taxpayer subsidies to nuclear plants over the past 50 years, the objectives of these new subsidies are precisely the same as the earlier subsidies: to reduce the private cost of capital for new nuclear reactors and to shift the long-term, often multi-generational risks of the nuclear fuel cycle away from investors. And once again, these subsidies to new reactors—whether publicly or privately owned—could end up exceeding the value of the power produced.” [page 3]
The many ways of counting subsidies
Among the goodies routinely given away, according to the Concerned Scientists, are: Continue reading →
January 9, 2017
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business and costs, politics, Reference, USA |
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Climate change threatens ability of insurers to manage risk
Extreme weather is driving up uninsured losses and insurers must use investments to fund global warming resilience, says study, Guardian, Damian Carrington, 7 Dec 16, The ability of the global insurance industry to manage society’s risks is being threatened by climate change, according to a new report.
The report finds that more frequent extreme weather events are driving up uninsured losses and making some assets uninsurable.
The analysis, by a coalition of the world’s biggest insurers, concluded that the “protection gap” – the difference between the costs of natural disasters and the amount insured – has quadrupled to $100bn (£79bn) a year since the 1980s.
Mark Carney, the governor of the Bank of England, warns in the new report that: “Over time, the adverse effects of climate change could threaten economic resilience and financial stability [and] insurers are currently at the forefront.”
The ClimateWise coalition of 29 insurers, including Allianz, Aon, Aviva, Lloyd’s, Prudential, Swiss Re and Zurich, conclude that the industry must use more of its $30tn of investments to help fund increased resilience of society to floods, storms and heatwaves.
The Bank of England warned in 2015 that insurance companies could suffer a “huge hit” if their investments in fossil fuel companies were rendered worthless by action on climate change and some insurershave already shed investments in coal.
The ClimateWise report, published on Wednesday, also says the industry must also use its risk management expertise to convince policymakers in both the public and private sector of the urgent need for climate action.
The industry’s traditional response to rising insurance risks – raising premiums or withdrawing cover – would not help deal with the rising risks of global warming, it said……..
The economic impact of these natural catastrophes is growing quickly, according to Swiss Re, with total losses increasing fivefold since the 1980s to about $170bn today. This increase is partly due to an increase in extreme weather but also due to an increase in assets as cities and towns have grown, especially in vulnerable locations such as on coasts……. https://www.theguardian.com/environment/2016/dec/07/climate-change-threatens-ability-insurers-manage-risk?CMP=share_btn_tw
January 7, 2017
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2 WORLD, business and costs, climate change |
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NuGen ‘remains committed’ to Moorside nuclear plant http://www.in-cumbria.com/NuGen-remains-committed-to-Moorside-nuclear-plant-b026a08f-7adb-4f7a-b6ff-c67aa3026e0a-ds by Duncan Bick January 5, 2017 NUGEN says it “remains committed” to plans for a nuclear power station in Cumbria, despite the crisis affecting its majority shareholder Toshiba. Forty per cent was wiped off the Japanese company’s value in the last week of 2016 after it said that its US subsidiary, Westinghouse Electric, may have overpaid by several billions of dollars for another nuclear construction and services business.
To compound matters, the company is embroiled in an accounting scandal.
Its shares plunged to 259 yen (£1.81) on Thursday before staging a modest recovery on Friday. Yesterday they settled at slightly more than 277 yen when the Tokyo stock exchange closed.
Toshiba holds a 60 per cent stake in developer NuGen, alongside ENGIE of France.
They are due to decide next year whether to proceed. If the do, a £10bn power station will be constructed at Moorside, Sellafield. The credit agency Moody’s has downgraded Toshiba’s ratings and warned that the writedown could affect the company’s ability to pay its debts.
But a spokesman for NuGen said: “NuGen’s shareholders [Toshiba and ENGIE] remain committed to the development of our Moorside project.
“NuGen is actively engaged in exploring a universe of investment opportunities to bring in additional investments, including debt and equity, to help fund the construction of Europe’s largest new nuclear power station.”
He added: “NuGen welcomed the recent signing of a memorandum of cooperation between the UK and Japanese governments.
“The agreement shows confidence in the progress and deliverability of Moorside and commitment to nuclear as a solution to meeting the UK’s low carbon electricity requirements.”
NuGen has been seeking further backers for the scheme and is understood to have held talks about investment from the Korea Electrical Power Corporation.
If Moorside does go ahead, Westinghouse, once owned by British Nuclear Fuels, would supply three reactors.
They would have a capacity of up to 3.8GW, enough to supply 7.5 per cent of the UK’s electricity.
January 6, 2017
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Toshiba admits to a ruinous overpayment for an American nuclear firm Its share price plunged by 40% in three days as investors worried about its financial viability, The Economist, Jan 7th 2017 | TOKYO THE probe in 2015 into one of Japan’s largest-ever accounting scandals, at Toshiba, an electronics and nuclear-power conglomerate that has been the epitome of the country’s engineering prowess, concluded that number-fiddling at the firm was “systemic”. It was found to have padded profits by ¥152bn ($1.3bn) between 2008 and 2014. Its boss, and half of the board’s 16 members, resigned; regulators imposed upon it a record fine of $60m.
Now its deal-making nous is in doubt too. In December 2015—the very same month that it forecast hundreds of billions of yen in losses for the financial year then under way, as it struggled to recover from the scandal—Toshiba’s American arm, Westinghouse Electric, bought a nuclear-construction firm, CB&I Stone & Webster. One year on, on December 27th, Toshiba announced that cost overruns at that new unit could lead to several billions of dollars in charges against profits.
Part of the $229m that Westinghouse paid for CB&I Stone & Webster included $87m of goodwill (a premium over the firm’s book value based on its physical assets). It is that initial estimate that is now being recalculated.
Toshiba had looked to be bouncing back from its accounting nightmare………
Toshiba’s central part in a plan by the government of Shinzo Abe, the prime minister, to pep up growth by exporting nuclear-power technology to emerging countries may help. In June Westinghouse clinched a deal in India to build six new-generation AP1000 reactors, Toshiba’s first order since the triple meltdown at the Fukushima Dai-ichi nuclear plant in 2011. Toshiba is also involved in that site’s costly and complex clean-up. Some think that Japanese banks, known for keeping zombie firms on life support, will stand behind it, come what may. Shares in Toshiba’s two main lenders, Sumitomo and Mizuho, slid last week after the profit warning. Investors expect more big bank loans or a debt-for-equity swap, which allows a bank to turn bad loans into shares.
The consensus on Toshiba’s latest screw-up is that a long-standing culture of poor management is to blame…..http://www.economist.com/news/business/21713896-its-share-price-plunged-40-three-days-investors-worried-about-its-financial
January 6, 2017
Posted by Christina Macpherson |
business and costs, Japan, secrets,lies and civil liberties, USA |
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The future of nuclear energy in Japan, nearly six years after the 2011 Fukushima disaster http://www.abc.net.au/news/2017-01-05/the-future-of-nuclear-energy-in-japan-after-fukushima/8162686 By Tokyo correspondent Rachel Mealey Japan has been pursuing a dream of nuclear energy since the 1960s.
The country’s first nuclear reactor was completed in 1965 and between then and 2011, Japan invested hundreds of billions of dollars into the industry.
Money is still being funnelled into the industry, but these days it is mostly just for upkeep of idle reactors.
When disaster struck the Fukushima nuclear plant in Japan in March 2011, there were 54 nuclear reactors operating in the country and generating about one third of Japan’s power.
But with the triple, reactor-core meltdown at Fukushima came concerns about nuclear power in other areas of Japan. The government of the day ordered an immediate review of the safety aspects of the remaining reactors.
Today, there are just four reactors in operation across Japan (although one is “paused” while a legal challenge is heard).
Eleven are in the process of being decommissioned — six of these are at Fukushima — and decisions are yet to be made about 42 other reactors.
Tom O’Sullivan, an energy sector analyst in Japan, said five or six other reactors should come back online in 2017, but there were localised protests to some of those planned restarts.
“Some of the polling that has been done indicates that 60-70 per cent of the Japanese people actually oppose the restarting of the reactors,” Mr O’Sullivan said.
In April 2016, a major earthquake struck Japan’s southern-most island of Kyushu.
An operating nuclear reactor was just 120 kilometres from the epicentre of the quake. Roads and bridges were damaged and landslides cut off access to some areas — aggravating the fears of local people about how they would evacuate if another nuclear disaster was to occur.
Future energy needs questioned
In the years to come, the Japanese Government has major decisions to make about the future of the nuclear industry. Nuclear reactors have a natural operating life of 40 years.
“The average age of the Japanese reactors is now close to 30 years, so most of them have only a remaining operating life of 10 years,” Mr O’Sullivan said.
“Once they start hitting the 40-year time limit, they’re going to have to write off some of the residual costs associated with them. Then of course you have the additional, significant issue of having to decommission them and the costs in that regard are very, very significant.”
The Government has had very little to say in recent months about its energy policy.
The most recent utterings of Prime Minister Abe were back in March — when Japan was marking the five-year anniversary of the nuclear disaster. He said his Government was aiming to achieve 20-22 per cent of energy needs met by nuclear by 2030.
Environmental group Greenpeace said that aim would be close to impossible to achieve.
“The reality is, they will never get to that 20 or 22 per cent. I think inside Government, there are factions that basically believe that maybe we can reach that target, but a more realistic assessment says maybe it will be a lot less,” Greenpeace nuclear spokesman Shaun Burnie said.
“I think the Japanese Government will be forced to change its energy policy. This cannot go on indefinitely. Nuclear utilities are unable to operate their reactors.”
January 6, 2017
Posted by Christina Macpherson |
business and costs, Japan, politics |
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