Mismanagement and incompetence as the nuclear industry plunders Britain’s public purse
Nuclear plundering of the public purse – the Sellafield and Moorside billions, Ecologist, Martin Forwood 13th December 2016
While the government is cutting vital public expenditure across the board there’s one industry for which no costs are too great, writes Martin Forwood. The price of an ‘evaporator’ at the Sellafield nuclear complex is escalating towards £1 billion, while billions more of taxpayer finance are being lined up to finance cooling systems, power lines and transport links for the adjacent Moorside new-build nuclear power plant.
The Brexit vote and Donald Trump’s elevation to the US Presidency have turned the international status quo upside down.
But some things – like the nuclear industry’s insatiable appetite for taxpayers’ money – never change.
Sellafield’s Evaporator D project, with NuGen’s Moorside in hot pursuit, is a prime example as it limps along, sustained only by ever increasing helpings from the public purse.
With nuclear power rightly acknowledged as being a hideously expensive way of boiling a kettle, then Evaporator D – known to the Sellafield workforce as the ‘Big Kettle’ – must be breaking all records.
Initially costed at £90 million (2007) and originally due to come into operation in 2010/11, the cost has increased eight-fold to £740m – as at September 2015. With a ‘challenging’ operational date currently pencilled in as 2017/18, and with updated figures yet to be published, the sky is clearly the limit for Evaporator D.
The tortured progress of the new Evaporator, designed to reduce (by evaporation) the volume of the dangerous liquid High Level Wastes (HLW) produced by spent fuel reprocessing, reveals a catalogue of project mismanagement and eye-watering cost hikes that show little sign of abating.
Promoted specifically by BNFL and subsequently by the NDA as being urgently needed to support continued reprocessing operations in the B205 (magnox fuel) and THORP (oxide fuel) plant, Evaporator D is currently being shoe-horned into the HLW complex.
There it will join its three fellow but semi-crippled evaporators (A,B & C) whose increasing unreliability through age and internal corrosion had underpinned the urgency for Evaporator D.
A tale of mismanagement and incompetence
Despite claiming not to recognise the £90m estimate of 2007, the NDA was nevertheless happy to confirm a price tag of £100m in 2008, since when the cost of Evaporator D has risen in almost annual increments – with the biggest hike to over £600m.
That number comes in a damning report by the National Audit Office that was highly critical of the NDA’s project management and that of its subsequently sacked contractor Nuclear Management Partners (NMP) who had acted for the NDA as Sellafield’s Parent Body Organisation since 2008. As the NAO reported,
“Gaps in the capability of subcontractors in the supply chain to undertake work to the standards required for nuclear installations have had direct consequences for the speed and efficiency of project delivery. For example, the Authority estimates that £50 million of the £244 million increase in the cost of evaporator D and part of the 18-month delay since 2009 is because the subcontractor lacked experience in welding to the necessary nuclear quality standards.
“The Authority was aware of these risks when it approved the start of construction. It relied on Sellafield Limited’s assurances that its subcontractor could manage the risks. The Authority did not obtain assurance from Sellafield Limited that it had put in place appropriate quality assurance and training.”
The cramped conditions in and around the HLW complex was a major factor in employing the novel option of having the main elements of the Evaporator built off-site (by Interserve at Ellesmere Port) and delivered by barge to Sellafield beach in the form of 11 modules, the largest weighing 500 tonnes and measuring 12.5 x 7.5 x 27 metres tall. The Evaporator, whose top and bottom sections are shown above being fabricated at Ellesmere Port, will operate in an upright position once installed at Sellafield.
Novel as the option was, it soon fell foul of a range of problems that included a disorganised supply chain, design changes, the quality of module fabrication, and seismic qualification.
With the modules delivered to Sellafield beach and hauled onto site between 2011 and 2013, Evaporator D’s cost increases from 2013 onwards are largely attributed by the NDA to the ‘transfer of incomplete modules to site’. This resulted in extensive additional cutting and welding work being needed – in a confined work space – to connect together the component parts of the Evaporator system.
And now Evaporator D looks set to miss the ‘reprocessing boat’
The greatest irony of all is, of course, that despite the early hullabaloo about its urgent and crucial support role for reprocessing at Sellafield, Evaporator D can be of service to THORP reprocessing (due to finish in 2018) for no more than one year at best.
At worst it will be of service only for THORP’s post-2018 clean out, the remnant days of B205 reprocessing which is due to end around 2020 and other site decommissioning work.
Faced with this prospect and the embarrassing reality that its much vaunted Evaporator D could indeed miss the THORP reprocessing boat for which it was primarily designed, the NDA and Sellafield Ltd damage limitation teams have recently swung into top gear – by stressing the Evaporator’s future decommissioning role through its ability to deal with the larger waste particles expected to be encountered during the coming years of clean-up work.
For a project whose £740m cost will undoubtedly escalate further, aggrieved taxpayers may take some comfort from Sellafield’s 2012 announcement that plans for a fifth (£600m) Evaporator E had been scrapped. But they should now cast a wary eye to NuGen’s new-build project just across the road from Sellafield where the prospect of further pilfering from the public purse is simmering on the back-burner.
Moorside nuclear power plant – another massive drain on taxpayers’ money …….
French Nuclear Industry in Chaos
NuClear News No 91, Jan 2017 On 14th December some thirty Greenpeace activists blocked the EDF headquarters in Paris to denounce the financial scandal and technical bankruptcy of the Company. They hung a banner on the front of the HQ building which declared that EDF has a debt of 74 billion euros, but because of nuclear power, this figure will rise even higher. (1)
As we reported last month Greenpeace commissioned an audit by AlphaValue, the equity research company. The report indicated that EDF grossly underestimates the cost of nuclear electricity. If it disclosed the true cost of running its fleet of reactors in France while financing two new ones in the UK, it would be declared bankrupt. (2) (3)
France is set to have its usual nuclear power capacity almost completely restored by midJanuary, after a number of plants come back online following inspections. Only 4 out of 58 nuclear power plants will be offline by the middle of January, so worries about shortages have eased. EDF has confirmed that seven nuclear reactors shut down for safety checks would be up and running again by the end of December and there should be no problem with power supplies this winter.
Grid operator RTE said that three of the seven reactors offline – Gravelines 2, Dampierre 3 and Tricastin 3 – would resume production from December 20th and that four more would restart before December 31st. The seven reactors are among 12 that have been slated for inspections under orders from the nuclear regulator ASN following the discovery of high carbon concentrations, which could weaken their steel. (4)
EDF has asked ASN if it can postpone the outage of the 1.5-GW Civaux-1 and the 900-MW Tricastin-2 reactors to March and February respectively. The Civaux-1 and Tricastin-2 reactors are currently both due to go offline December 23 and return on January 15. (5)
While this particular crisis may appear to have an end in sight, the French industry’s problems are now moving overseas. Manufacturing problems and forged paperwork as identified at Le Creusot are rare in the nuclear industry, where strict adherence to production and operating rules are supposed to be a crucial buffer against nuclear accidents. Independent nuclear energy consultant Mycle Schneider says “Having worked for over 30 years in France, I did not think this was possible for this country, [but it is] likely we have seen only the tip of the iceberg.”
Inspectors from the U.S. China and four other countries are investigating the decades-long cover up of the manufacturing problems at Le Creusot to see whether flaws represent a safety threat to their reactors. After investigators discovered files suggesting Le Creusot employees had concealed for decades manufacturing problems involving hundreds of components sold to customers around the world, the French regulator, ASN, ordered Areva to check 6,000 manufacturing files by hand, covering every nuclear part made at Le Creusot since the 1960s. Finnish inspectors visiting Le Creusot said they learned of potential flaws in a component slated for the reactor at Olkiluoto. In the U.S., the NRC has identified at least nine nuclear plants that use large components from Le Creusot.
“I’m concerned that there keep being more and more problems unveiled,” said Kerri Kavanagh, who leads the U.S. Nuclear Regulatory Commission’s unit inspecting Le Creusot. Regulators are considering returning to Le Creusot or inspecting Areva’s Lynchburg, Va., offices to deepen their probe of the plant, a U.S. official said.http://www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo91.pdf
Nuclear industry prolongs the delusion that UK’s Hinkley nuclear station is proceeding well
Hinkley Point C Wylfa Newydd NuClear News No 91, Jan 2017 Back at the Nuclear Industry Association’s annual conference EDF’s Humphrey Cadoux-Hudson tries to keep the delusion going telling delegates that “1,000 workers [are] currently on site” and “first nuclear concrete expected in Q1 2017”
In fact the first pour of concrete (for the reactors) will not start until 2019. At the moment a temporary jetty is being built but it will take about a year to complete and construction of workers’ accommodation may start in 2017. In the meantime about a 100 HGV lorry movements a day are carrying, spoil, limestone, rebar, metal shearing aggregate and plate material. 40 buses a day carry shift workers between Bridgwater and the site, but ironically these buses can’t be used by local residents who have had their local services scrapped.
So there will be two more years of falling renewable costs and rising nuclear costs before construction at Hinkley can get underway in earnest. And two more years of revelations about the mess that EDF and Areva have gotten themselves into. ) http://www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo91.pdf
South Korea might join the throng marketing their costly nuclear reactors to Britain
Hyung-hwan discussed cooperation on British nuclear energy projects in a meeting in London on Thursday with Britain’s business minister Greg Clark, South Korea’s energy ministry said in a statement.The statement from Seoul didn’t disclose details of discussions on nuclear energy, but said the two countries will hold a follow-up meeting in the first half of next year.
A British government statement issued said the two countries underlined a commitment at the meeting to keep working together on science, innovation and technology, without mentioning nuclear power.
Korea, Asia’s fourth-largest economy and the world’s fifth-biggest user of nuclear power, is keen to export its nuclear reactor technology, developed through state-run utility Korea Electric Power Corp (KEPCO).
Earlier this year, Britain gave the green light to the $24 billion Hinkley Point C project, its first new nuclear power plant in decades.
Along with that project, NuGen, a joint venture between Toshiba and French utility company Engie, plans to build three reactors at the Moorside site on the coast of Cumbria, in northwest England.
According to Seoul’s statement on Friday, Korea’s energy minister also had a meeting with NuGen chief Tom Samson during his British visit. The minister said Korean participation in Nugen projects would contribute to their success.
Earlier this year a person familiar with the situation told Reuters KEPCO had engaged in talks with Toshiba and Engie about buying a stake NuGen. A NuGen spokesman declined to comment on whether talks were taking place with KEPCO, which also declined to comment.
(Reporting by Jane Chung; Editing by Kenneth Maxwell)
Engie, (formerly GDF Suez) might pull out of UK nuclear power plan at Moorside in Cumbria
Moorside NuClear News No 91, Jan 2017 Unfortunately for nuclear supporters utilities in the UK are, like PGE, beginning to realise that the old utility model is dying. Engie, formerly GDF Suez, which owns 40% of NuGen, the Company which wants to build three new nuclear reactors at Moorside in Cumbria, next to Sellafield, is fully aware that “the future is going to be much more about decentralized energy”. The company is roughly one third owned by the French Government, and is the parent company of the Belgian utility, Electrabel, which operates all seven of Belgium’s nuclear reactors. But it is now trying to abandon its new reactor projects in Turkey and England because it no longer has the resources to finance such expensive projects. (8)
The Chief Executive of Engie UK, Wilfrid Petrie, says “It’s very difficult today to build a new power plant [in the UK] with current market conditions”. Instead, the Company offers localised services that could include installing insulation, district heating and solar panels on existing buildings as well as supplying gas and electricity. “We see the emergence of a new type of organisation within cities,” he says. Engie, he believes, can build on its relationships with councils and other commercial customers to expand its British business by developing local, decentralised energy in urban areas, where demand is high. “We don’t want to sell a huge amount of energy. Our big focus is on the demand side. The future is going to be much more about decentralized energy,” he says. (9)
If Engie does pull out of the NuGen consortium it will make it even harder to finance the construction of three new reactors at Moorside. NuGen has already told the House of Lords Economic Affairs Committee that it is hoping that certain non-nuclear elements of the project might be paid for by the UK Government. Despite casting its net far and wide in an attempt to drum up the required finance the consortium is clearly struggling to attract support. Hoping that the taxpayer will rescue the project, NuGen’s CEO Tom Samson told the House of Lords that one non-nuclear element of the project has been identified by the consortium as the seawater system required to cool Moorside’s reactors. Samson hopes that major ‘civil works’ such as the removal of excavation spoil, could also qualify for Government largesse. There’s also a suggestion there might be Government assistance to improve the transport infrastructure of Cumbria. The very notion that the Treasury should ride to the rescue when hospital and community services in West Cumbria are being increasingly starved of Government support is not going down too well in some quarters. (10) http://www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo91.pdf
Anglesey UK: economy stagnates during the struggle to find finance for Wylfa Newydd New Nuclear
Wylfa Newydd NuClear News No 91, Jan 2017 “The Government knows that solar and wind will be cheaper by the time Hinkley is generating” says Stop Hinkley spokesperson Roy Pumfrey. “It is blindingly obvious that solar and wind will win through in the end.” (21)
If the French nuclear industry managed to somehow get through its current difficulties ,EDF and China’s state-backed CGN can always appeal to their respective governments to help fund delivery of Hinkley Point C if things go pear-shaped, but Horizon, which is proposing to build two Advanced Boiling Water Reactors at Wylfa on Anglesey and two at Oldbury in Gloucestershire doesn’t have that luxury. Instead it will need to raise much more of its capital funding through attracting private investors – and proving to them it’s a safe bet. Horizon’s CEO Duncan Hawthorne admits this will be a challenge. “Quite honestly, we can’t point to a large parade of successful (nuclear) projects … We have to have a credible story in order to get financial support for the build costs”. He has got to somehow show that it is possible to construct a plant that will guarantee to investors it can be built on time and budget – and be commercially viable. (22) Given that there were only four ABWRs operating anywhere in the world before Fukushima with an average load factor of only 45%, and all have been closed since 2011, this might be a tall order for Hawthorne. (23)
The Japanese government and Hitachi are reported to be putting together a package worth £6.79bn to finance the Wylfa. The total cost of the project is expected to be around £19bn. There has been talk, according to the Nikkei Asian Review of the UK Government shouldering 25% of the cost. Even if that were the case that still leaves £11.5bn to be found from somewhere. (24)
While Wales and the global climate waits for Horizon to prove something that might well be impossible to prove the local economy on Anglesey has been “allowed to stagnate over decades due to a promise that nuclear power would come and save the day”. Robat Idris from People Against Wylfa B says residents are concerned about nuclear waste from the proposed Wylfa Newydd power plant and were not convinced that any new jobs would be for local people. He says focusing efforts on bringing renewable and community energy schemes to Anglesey would offer more long-term benefits. (25) http://www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo91.pdf
Japanese government planning to subsidise Britain’s new nuclear build
Tokyo eyes ¥1 trillion in financial support for Japanese firms pursuing U.K. nuclear plants http://www.japantimes.co.jp/news/2016/12/16/business/tokyo-eyes-%C2%A51-trillion-financial-support-japanese-firms-pursuing-u-k-nuclear-plants/#.WFONt9J97Gg The government is considering offering financial assistance through state-affiliated banks for projects won by Japanese companies for nuclear power plant construction in Britain, sources said Thursday.
Under study is a plan for the Japan Bank for International Cooperation and the Development Bank of Japan to invest in and provide loans to local companies that build and operate nuclear power stations, the sources said.
Visiting British Chancellor of the Exchequer Philip Hammond told reporters in Tokyo on Thursday that Britain is holding talks with the Japanese government, Hitachi Ltd. and Toshiba Corp. on a financial support framework for nuclear power plant construction projects in his country.
On the same day, Hammond met with Chief Cabinet Secretary Yoshihide Suga to exchange opinions about nuclear plant construction.
British Business, Energy and Industrial Strategy Secretary Greg Clark plans to visit Japan as early as next week and hold meetings with officials of Hitachi, Toshiba and the JBIC.
Under the envisaged scheme, the Japanese government expects to offer financial assistance to Horizon Nuclear Power Ltd., a unit of Hitachi, and NuGeneration Ltd., which is under the wing of Toshiba.
Rising costs for Vogtle Nuclear Reactors- Georgia Public Service Commissioners to Decide on Who Pays
Georgia Public Service Commissioners to Decide on Increasing Costs for New Plant Vogtle Nuclear Reactors http://www.cleanenergy.org/2016/12/12/georgia-public-service-commissioners-to-decide-on-increasing-costs-for-new-plant-vogtle-nuclear-reactors/
On December 20, the Georgia Public Service Commissioners will decide whether to put utility customers on the hook for cost increases while rewarding Georgia Power and its partners for the bungled expansion of nuclear Plant Vogtle. The Commissioners are considering a settlement that approves all costs spent-to-date ($3.68 billion) on the two reactors and pre-approval of an additional $2 billion in yet-to-be-spent capital costs. Watch a new TV INTERVIEW with SACE staff here.
The PSC Commissioners need to hear from Georgia Power customers about this out-of-control nuclear boondoggle!
Despite having only 36 percent of construction complete more than seven years into the project, the water-intensive Vogtle reactors along the Savannah River are likely 45-months delayed and Georgia Power’s estimated costs have increased by over $2 billion.
Once-projected “benefits” have completely disappeared. Since 2011, over $1.8 billion has been collected from Georgia Power customers for financing costs charged in advance due to anti-consumer state legislation.
Now a proposed settlement offers Georgia Power a sweetheart deal – Vogtle’s costs will increase significantly and the majority of the burden will fall on the Company’s customers, not shareholders.
The PSC Commissioners need to hear from you TODAY! Find more information here. Help spread this action on social media by sharing on Facebook or Twitter.
Contact the Commissioners before December 20, 2016 and reference “Docket#29849 – Vogtle Supplemental Information Report.”
Financially strapped French company AREVA gets a lifeline. EDF in dire financial straits, too.
Areva receives offer for 10% stake in spun-off nuclear unit , Ft.com, 15 Dec 16
Deal would help recapitalise troubled French group Areva, the struggling French nuclear group, received a firm €500m offer for a 10 per cent stake in a new nuclear fuel company that will be split off from its parent in a wider reshaping of the French nuclear industry.
Areva is preparing to split off its uranium mining and nuclear fuel activities into NewCo as part of a government-backed rescue after the group was forced to the brink of collapse under the weight of its own debt this year.
Earlier this year it was agreed that the other half of Areva, the troubled reactor business, would be taken over by EDF, the larger French nuclear group, in a deal that values that part of the business at about €2.5bn.
EDF, the other major company in the sector, lost more than a tenth of its stock market value on Thursday after it warned of lower 2017 earnings becasue of an expected drop in power prices…….
Shares in EDF were down 12 per cent on Thursday. The stock has fallen 23 per cent over the past year after repeated warnings of weak profits. https://www.ft.com/content/4a1d5af6-c319-11e6-9bca-2b93a6856354
Divestment from fossil fuels has now reached $5.2 Trillion
Fossil Fuel Divestments Now Represent $5.2 Trillion, Climate Central December 12th, 2016 Investing heavy weights are moving their assets and funds out of fossil fuels at a record pace.
A network of local governments, pension funds, faith organizations, philanthropies and wealthy individuals representing $5.2 trillion in assets have committed to — and in some cases already started — divesting from fossil fuel companies, according to a report released on Monday. That’s a huge sum of money for a movement that started just four years ago on U.S. college campuses and its growth is likely to continue as the world strives to reach its climate goals.
“It’s pretty clear that the growth trajectory is enormous,” said Ellen Dorsey, the executive director of the Wallace Global Fund. In the past 15 months alone, the assets represented by the fossil fuel divestment movement have doubled. As of December 2016, there are 688 institutions and 58,400 individuals across 76 countries who are on board with divesting from fossil fuels, according to the report. The analysis was completed by Arabella Advisors, a philanthropy services firm.
Those divesting include Norway’s sovereign wealth fund, Germany-based financial services giant Allianz, and Amalgamated Bank, which in September became the first U.S bank to divest. Private businesses represent $4.6 trillion in assets being divested, nearly 90 percent of the overall total……
Another delay in South Africa’s troubled move towards new nuclear reactors
Nuclear RFI delayed once again Release postponed ‘to brief minister’. Money Web , Antoinette Slabbert / 15 December 2016 Moneyweb has just learnt that Eskom will not release the highly-anticipated nuclear Request for Information (RFI) on Thursday, despite widely-published undertakings by its acting CEO Matshela Koko to that effect.
According to South African Nuclear Energy Corporation (Necsa) chair Dr Kelvin Kemm, the documents were signed off by him and Eskom chair Dr Ben Ngubane on Thursday morning and were ready for release. A further cooperation agreement between Eskom and Necsa was also signed.
Eskom and Necsa have been tasked by government to jointly manage the procurement of the country’s 9 600 MW new nuclear build programme.
Kemm said Eskom’s shareholder representative, public enterprise minister Lynne Brown, however requested a personal briefing on the matter, since she has not been closely involved in the nuclear procurement planning……http://www.moneyweb.co.za/news/industry/breaking-nuclear-rfi-delayed-once-again/
Protecting Against Fatigued Nuclear Plant Workers
DAVE LOCHBAUM, DIRECTOR, NUCLEAR SAFETY PROJECT UCS DECEMBER 13, 2016, Disaster by Design/ Safety by Intent #62
The Nuclear Regulatory Commission (NRC) revised its regulations requiring nuclear plant workers to be fit for duty on March 31, 2008, to include measures intended to protect against mistakes made by workers impaired by fatigue. Specifically, Subpart I, “Managing Fatigue,” was added to 10 CFR Part 26, “Fitness for Duty Programs.”………http://allthingsnuclear.org/dlochbaum/protecting-against-fatigued-nuclear-plant-workers
India wants proof of efficiency of French and USA nuclear reactors
India seeks details of working nuclear reactors from US, French firms, Indian Express By PTI 11th December 2016 NEW DELHI: India has asked American and French nuclear companies, which propose to build atomic plants in the country, to furnish details of functional reactors designed by them as proof of their efficacy.
Sources said French company EDF and US firm Westinghouse are still not ready with fully operational “reference plants”, a pre-requisite before a final General Framework Agreement could be signed with these entities.
The EDF proposes to build six nuclear European Pressurised Reactors (EPR) of 1650 MW each in Jaitapur and Westinghouse another set of six AP1000 reactors in Kovadda in Andhra Pradesh with an individual capacity of 1000 MW.
A senior government official said designs presented by the two companies are new, so even the Department of Atomic Energy (DAE) wants to see how the technology works.
“We have told them to show a reference nuclear plant, which is functional and produces electricity. On paper, the designs of these companies look nice, but we should also know whether they work well or not. This will also help in getting clearance from the Atomic Energy Regulatory Board, the nuclear watchdog in the country,” the official said.
India specialises in Pressurised Heavy Water Reactors while the one which foreign companies are building are Light Water Reactors (LWRs) with some distinction from one another.
Interestingly, the Russian have built Kudankulam units one and two, a VVER technology.
The EDF, which is now negotiating with the Nuclear Power Corporation of India (NPCIL), said it had given Flamanville Nuclear Power Plant 3 as the reference plant.
The French government-owned company said the Flamanville plant with a capacity of 1630 MW should be operational by next year.
However, sources said it might take a tad longer for the plant to become operational……http://www.newindianexpress.com/nation/2016/dec/11/india-seeks-details-of-working-nuclear-reactors-from-us-french-firms-1547944.html
EDF’s financial crisis will leave french taxpayers with a huge nuclear bill
French taxpayers face huge nuclear bill as EDF financial crisis deepens, Ecologist, Paul Brown 8th December 2016
Nuclear giant EDF could be heading towards bankruptcy, writes Paul Brown, as it faces a perfect storm of under-estimated costs for decommissioning, waste disposal and Hinkley C. Meanwhile income from power sales is lagging behind costs, and 17 of its reactors are off-line for safety tests. Yet French and UK governments are turning a blind eye to the looming financial crisis.
Bankruptcy for EDF seems inevitable – and if such a vast empire in any other line of business seemed to be in such serious financial trouble, there would be near-panic in the workforce and in governments at the subsequent political fall-out.
But it seems that the nuclear-dominated EDF group is considered too big to be allowed to fail. So, to keep the lights on in western Europe, the company will have to be bailed out by the taxpayers of France and the UK.
The French government, facing elections next spring, and the British, struggling with the implications of the Brexit vote to leave the European Union, are currently turning a blind eye to the report by AlphaValue that EDF has badly under-reported its potential liabilities.
Ageing nuclear reactors
While EDF is threatening to sue people who say it is technically bankrupt, the evidence is that the cost of producing electricity from its ageing nuclear reactors is greater than the market price.
Coupled with the impossibility of EDF paying the full decommissioning costs of its reactors, it is inevitable that it is the taxpayers in France and the UK who will eventually pick up the bill. However this will not be easy due to the EU’s ‘state aid’ rules, which limit governments’ ability to support ailing companies.
There is also the ongoing thorny problem of disposing of the nuclear waste and spent fuel rods, which are building up in cooling ponds and stores on both sides of the Channel, with no disposal route yet in sight.
A looming problem for EDF, which already admits is has €37 billion of debt, is that 17 of its ageing fleet of nuclear reactors, which provide 70% of France’s electricity, are being retired.
According to AlphaValue, EDF has underestimated the liabilities for decommissioning these reactors by €20 billion. Another €33.5 billion should be added to cost of handling nuclear waste, the report says. Juan Camilo Rodriguez, an equity analyst who is the author of the report, says that a correct adjustment of nuclear provisions would lead to the technical bankruptcy of the company.
In a statement, EDF said it “strongly contests the alleged accounting and financial analyses by the firm AlphaValue carried out at the request of Greenpeace and relating to the situation of EDF”.
It says that its accounts are audited and certified by its statutory auditors, and that the dismantling costs of EDF’s existing nuclear power fleet have also been subject to an audit mandated by the French Ministry of the Environment, Energy and the Sea.
Even with its huge debts, EDF’s problems could be surmounted if the company was making big profits on its electricity sales, but the cost of producing power from its nuclear fleet is frequently greater than the wholesale price.
That creates a second problem – that unless the wholesale price of electricity rises and stays high, the company will make a loss on every kilowatt of electricity it sells. The new rightwing French presidential candidate, François Fillon, promises not to retire French reactors and to keep them going for 60 years. But this cannot be done without more cost.
This is the third problem: vast sums of capital are needed to refurbish EDF’s old nuclear fleet for safety reasons following the 2011 Fukushima nuclear disaster in Japan. …….
Repeated life extensions
Since the sale of UK nuclear plants to EDF in 2008 at a cost £12.5 billion, the company has continued to operate them, and has repeatedly got life extensions to keep them running.
But this cannot go on forever, and they are expected to start closing in the next ten years. Once this happens, the asset value of each station would become a liability, and EDF’s mountain of debt would get bigger.
So far, the French and UK governments, and the company itself, seem to be in denial about this situation. Currently 17 French reactors are shut down for safety checks, following the discovery of faulty safety-critical compenents including large, difficult to replace steel forgings like steam generators.
The company has issued reassuring statements that they will be back to full power after Christmas, however in so doing EDF is assuming that the safety checks will give the reactors a clean bill of health. In fact, there are three other possible outcomes:
- additional potentially time-consuming tests are needed that will create further months of downtime.
- remedial engineering works are required to make the reactors safe. These would probably be costly and time-consuming.
- key components at the heart of the reactors, for example steam generators, need to be replaced altogether. However this would be so costly that, for a nuclear plant already reaching the end of its lifetime, premature closure would be the only viable option.
Perhaps the most likely outcome is that some of the 17 reactors will fall into each of these four categories, creating as yet unquantifiable unbudgeted costs for the company.
Meanwhile, to make up the shortfall from the closed reactors, electricity is being bought from neighbouring countries, including the UK, to keep the lights on in France. The power shortage is temporarily causing an increase in wholesale prices – but one that EDF is unable to fully exploit because so many of its reactors are not generating.
The future remains unpredictable – but as long as there are no actual power cuts, no action is expected from governments. Despite official denials, however, the calculations of many outside the industry suggest that it is only a matter of time before disaster strikes.
The cost of producing electricity from renewables is still falling, while nuclear gets ever more expensive, and massive liabilities loom. Ultimately, the bill will have to be passed on to the taxpayers. http://www.theecologist.org/News/news_analysis/2988433/french_taxpayers_face_huge_nuclear_bill_as_edf_financial_crisis_deepens.html
Bulgaria pays compensation damages to Russia, for scrapping Belene nuclear plant
Bulgaria’s NEK settles arbitration damages for shelved Belene nuclear plant http://sofiaglobe.com/2016/12/09/bulgarias-nek-settles-arbitration-damages-for-shelved-belene-nuclear-plant/ Bulgaria’s state-owned electric utility NEK has paid 601.6 million euro in damages to Atomstroyexport, the foreign contracts subsidiary of Russia’s state nuclear corporation Rosatom, Energy Minister Temenouzhka Petkova said on December 9 during question time in Parliament.
The money was transferred into Atomstroyexport’s accounts on December 8, Petkova said.
In a statement, Atomstroyexport confirmed receipt of the funds and was satisfied with the fact that NEK disbursed its commitments in full under the terms of an agreement signed in October, which saw the Russian company drop the daily penalty interest as long as NEK paid the principal owed by December 15.
The accumulated amount of daily penalties would have reached 23.8 million euro by that date. NEK’s agreement with Atomstroyexport also saw the Russian company accept a 20.9 million euro deduction in the original amount of damages ordered by arbitration, following several objections raised by the Bulgarian side to the calculation methodology.
Atomstroyexport was picked to build two 1000MW nuclear reactors at Belene on the Danube River, a project that was shut down by Bulgaria in 2012. The Russian contractor filed for arbitration, asking for 1.2 billion euro in damages for equipment ordered for the nuclear power plant, which NEK never paid for, and won the court action in June, although it was awarded just over half of the amount it claimed.
NEK decided not to appeal the ruling in September after Parliament passed a bill on September 28 that authorised a cash injection from the state Budget to NEK to pay the damages awarded by the tribunal.
The delay in the disbursement was due to the fact that Bulgaria was waiting for the European Commission to rule on whether such a transfer was allowed under the EU’s state aid rules. The Commission gave its approval earlier this week, according to reports in Bulgarian media.
NEK will now take ownership of the equipment manufactured by Atomstroyexport, but uncertainty remains about what the company will do next. Bulgarian officials travelled to Iran earlier this year to discuss a possible sale of the equipment, but there has been no development in the months since then.
Speaking to reporters in Parliament on December 9, Petkova said the Belene assets – the site itself and the equipment from Atomstroyexport – could be spun off into a separate company that would be put up for privatisation.
“If there is [investor] interest, then the [Belene nuclear power plant] project could be carried out on a market basis. If there is no investor interest, we will go in another direction and seek other options,” she said, as quoted by Bulgarian National Radio.
1 This Month
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Time: 11:00 AM Pacific Time (US & Canada) / 2:00 PM Eastern / 7:00 PM UK / 8:00 PM CET
Register for the Zoom Event Here
Shut down the radiation-damaged Heysham nuclear reactors now
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Say No to NASA’s Reckless Nuclear Reactor on the Moon
Say No to NASA’s Reckless Nuclear Reactor on the Moon
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