Former Electricite de France SA Chief Financial Officer says he quit because of financial risks of Hinkley nuclear project
Ex-EDF CFO Quit Over Financial Risks From U.K. Nuclear Project, Bloomberg, Francois De Beaupuy FrancoisDeBeaup
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Piquemal says French utility needs to strengthen balance sheet
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EDF can’t afford significant downgrade in rating: Piquemal
Former Electricite de France SA Chief Financial Officer Thomas Piquemal said he quit two months ago to highlight the risks of proceeding with the 18 billion-pound ($26 billion) Hinkley Point nuclear power project without additional financing.
The timetable pushed by EDF Chairman and Chief Executive Officer Jean-Bernard Levy for an investment decision on the U.K. project meant there wouldn’t have been time to strengthen the utility’s balance sheet, Piquemal told a hearing at the National Assembly in Paris. That would have left the company reliant on its 85 percent shareholder, the French state, providing funding and threatened EDF with the same fate as troubled nuclear-reactor builder Areva SA, he said.
“A new nuclear project is an extra risk for a company,” Piquemal said in his first public statement since quitting. “I didn’t want to approve a decision that could leave EDF in Areva’s situation one day.”……
Financial Strain
Speculation has mounted over the future of Hinkley Point since Piquemal resigned amid concerns the project would put EDF under too much financial strain, while labor unions have called for a three-year delay until similar nuclear plants built by the company start operating in France and China…….
EDF has held off on making a final investment decision even after forming a partnership with China General Nuclear Power Corp. and securing guaranteed power prices from the U.K. government at almost three times the current market rate for 35 years.Rating companies will probably downgrade EDF because large nuclear projects such as Hinkley Point will increase its risk profile, the ex-CFO said. While EDF had no financing problems at the end of 2015, it can’t afford a “significant” downgrade that would push its hybrid debt into the “junk” category because it would complicate a potential refinancing from 2020, Piquemal said. http://www.bloomberg.com/news/articles/2016-05-04/ex-edf-cfo-quit-over-financial-risks-from-u-k-nuclear-project
UK nuclear parts made at French plant in fakery probe
Telegraph Emily Gosden, energy editor 4 MAY 2016 Parts of the Sizewell B nuclear power station in Suffolk were made at a French plant being investigated over possible fake manufacturing records, EDF Energy has confirmed.
Mr Piquemal said he had sought a three-year delay to Hinkley as he was not prepared to “bet 60 to 70pc of [EDF’S] equity on a technology that has not yet proven that it can work and which takes 10 years to build”.
He said the proposed reactor technology involved “major construction risk”.
EDF has already postponed a decision on the £18bn Hinkley project until September as it consults with unions on a plan to shore up its balance sheet, but the problems at the Le Creusot plant have raised further doubts about the project and as well as nuclear safety at existing plants………http://www.telegraph.co.uk/business/2016/05/04/uk-nuclear-parts-made-at-french-plant-in-fakery-probe/
Cameco cuts back on mining uranium, as market stays slumped
Cameco scales back uranium production, WNN, 22 Apr 16, Cameco is suspending production at the Rabbit Lake uranium mine in northern Saskatchewan, curtailing production at its US uranium operations, and reducing production at McArthur River/Key Lake in response to market conditions, the company announced yesterday.
Work to transition the underground Rabbit Lake mine to care and maintenance will begin immediately and is expected to be completed by the end of August. Production at the US in situ leach operations cannot cease immediately because of the nature of the technology, and will instead decrease over time as head grades decline. The development of new wellfields will be deferred.
“Unfortunately, continued depressed market conditions do not support the operating and capital costs needed to sustain production at Rabbit Lake and the US operations,” CEO Tim Gitzel said. “These measures will allow us to continue delivering value to Cameco’s many stakeholders and support the long-term health of our company. We will provide assistance to those affected by these decisions,” he said……
The company will also reduce 2016 production at the McArthur River/Key Lake operation in Saskatchewan to 19 million pounds U3O8 (7308 tU), down from 20 million pounds (7693 tU), in response to a currently oversupplied uranium market…….http://www.world-nuclear-news.org/UF-Cameco-scales-back-uranium-production-2204167.html
Leaked TTIP documents cast doubt on EU-US trade deal
Greenpeace says internal documents show US attempts to lower or circumvent EU protection for environment and public health, Guardian, Arthur Neslen , 2 May 16, Talks for a free trade deal between Europe and the US face a serious impasse with “irreconcilable” differences in some areas, according to leaked negotiating texts.
The two sides are also at odds over US demands that would require the EU to break promises it has made on environmental protection.
President Obama said last week he was confident a deal could be reached. But the leaked negotiating drafts and internal positions, which were obtained byGreenpeace and seen by the Guardian, paint a very different picture………
Jorgo Riss, the director of Greenpeace EU, said: “These leaked documents give us an unparalleled look at the scope of US demands to lower or circumvent EU protections for environment and public health as part of TTIP. The EU position is very bad, and the US position is terrible. The prospect of a TTIP compromising within that range is an awful one. The way is being cleared for a race to the bottom in environmental, consumer protection and public health standards.”
US proposals include an obligation on the EU to inform its industries of any planned regulations in advance, and to allow them the same input into EU regulatory processes as European firms.
American firms could influence the content of EU laws at several points along the regulatory line, including through a plethora of proposed technical working groups and committees.
“Before the EU could even pass a regulation, it would have to go through a gruelling impact assessment process in which the bloc would have to show interested US parties that no voluntary measures, or less exacting regulatory ones, were possible,” Riss said……. https://www.theguardian.com/business/2016/may/01/leaked-ttip-documents-cast-doubt-on-eu-us-trade-deal
Vattenhall nuclear corporation in financial trouble, opposes nuclear risk premium, seeks to abolish Swedish tax
Vattenfall CEO says Germany’s proposed nuclear risk premium ‘too high’ Stockholm (Platts)–28 Apr 2016
* Plan ‘disproportionate’ to utilities’ economic strength
* Nuclear, hydro taxes in Sweden should be abolished
The CEO of Swedish utility Vattenfall, which has large stakes in Germany’s Brunsbuttel and Krummel nuclear plants, said the additional amount German nuclear power producers would have to pay for decommissioning and spent fuel storage under a proposed plan is “disproportionate to the economic strength of the utilities.”
The German Commission on the Review of the Financing of the Nuclear Phaseout, or KFK, recommended to the German government that nuclear utilities pay a so-called risk premium of Eur23.3 billion ($26.4 billion) into a fund for decommissioning reactors and final storage of spent fuel, which would be administered by the state.
That payment would be on top of the almost Eur40 billion in provisions that utilities have set aside to finance decommissioning and storage.
……NUCLEAR TAX Turning to its Swedish nuclear operations, Hall again called on the government to abolish the capacity tax on nuclear power. The tax is based on the amount of electricity reactors can generate, not on actual generation.
Hall and other Swedish nuclear utility executives have said that the tax, coupled with low electricity prices, is making nuclear power unprofitable. As a result, Vattenfall plans to shut two reactors ahead of the end of their technical lifetimes………http://www.platts.com/latest-news/electric-power/stockholm/vattenfall-ceo-says-germanys-proposed-nuclear-26430524
Westinghouse keen to fleece UK tax-payers with Small Modular Nuclear Reactors
Westinghouse is engaging its UK stakeholders in its SMR offering to the country’s government, the company announced today. Mark Menzies, member of parliament for the Fylde constituency where the company’s Springfields site is located, said that he had already formally registered his support for Westinghouse’s proposal to produce SMRs for the UK market. He said that feedback from stakeholders would be essential for as the proposal, which could see SMR pressure vessels sourced and manufactured in the UK, to move forward. http://www.world-nuclear-news.org/NP-UK-think-tank-urges-nuclear-innovation-2804167.html
Central bankers, financial facts, bringing an end to the nuclear power era?
Central Bankers Stimulate Nuclear End That Evaded Activists http://www.bloomberg.com/news/articles/2016-04-25/central-bankers-stimulate-end-for-nuclear-that-evaded-activists Jonathan Tirone April 26, 2016 —
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Interest rates near record lows cut funds for decommissioning
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Industry faces $1 trillion of liabilities from retiring plants
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Central banks may accomplish what a generation of anti-nuclear activists have failed to do: Force operators to finally decommission almost 150 reactors now sitting in limbo across the globe.
The plants have been shut down, either because they’re too expensive to run or because of concerns about their safety or age. They can’t send electricity to the grid, and they’ll need the special funds saved over decades for formal decommissioning and clean-up of radioactive waste.
In the past, many operators delayed decommissioning to allow growth in the clean-up funds. As the global economy weakened, however, and central banks kept interest rates low, the principal in some of those funds shrank. Last year in the U.S., seven of the 10 biggest funds lost money, falling to $43.7 billion, a drop of 1.1 percent. Now, with projected costs rising, industry advocates say owners are more likely to opt for full decommissioning before the funds decline further.
- “One can’t rely as much on fund growth as in the past,” said Patrick Joseph O’Sullivan, a decommissioning specialist with the International Atomic Energy Agency. “It’s actually pushing utilities to think about bringing forward all this work because they’re not able to rely anymore on assuming high returns on investments.”
- The change in emphasis comes 30 years after the April 26, 1986 explosion at the Chernobyl reactor spread radioactive fallout across Europe. That event, followed 25 years later by meltdown at the Fukushima plant in Japan, undercut nuclear as a power generator as low-cost options like natural gas and renewable energies became increasingly available.A 2005 report by the IAEA forecast costs to shut a 1,000 megawatt reactor would range from 150 million euros ($169 million) to 750 million euros. In the U.S., the country with the most decommissioning experience, actual costs have ranged from $307 million to $819 million, according to the Nuclear Energy Agency.
Twenty-four U.S. decommissioning projects with site-specific estimates will require average clean-up funds of about $750 million per reactor, the U.S. Nuclear Regulatory Commission reported. Those costs jive with an estimate by Exelon Corp., which operates reactors at 15 U.S. nuclear power plants.
- Exelon estimates it will take $1 billion to decommission its 2-unit plant in Zion, Illinois. It told shareholders in February that “sustained low market prices or depressed demand” could accelerate “asset retirement obligation expense related to future decommissioning activities.” Exelon’s clean-up fund fell 2 percent to $10.3 billion last year.Utilities operating in Germany including EON SE, RWE AG and Vattenfall SE have set aside funds deemed “acceptable” by regulators to cover 47.5 billion euros of estimated costs to decommission the country’s 17 reactors. Shares of those utilities jumped in February after reports that the German government would kick in an additional 17.7 billion euros to help store the radioactive waste.
“Understanding of these costs is fundamental for the development of estimates based on realistic decommissioning plans,” the Paris-based Nuclear Energy Agency said last month in a 260-page report prepared for regulators and utilities. “More and more questions are raised over the adequacy of the necessary infrastructure and human resources, as well as the ability and mechanisms to finance the costs.”
There are 438 nuclear reactors in operation worldwide and less than 4 percent of the power reactors built have been fully decommissioned. Fewer still have figured out how to store waste for the thousands of years it will remain dangerous.
- “For us, the trend toward early dismantling has important advantages,” said the IAEA’s O’Sullivan. “It will contribute to better burden sharing between current and future generations.”About $200 billion will be spent worldwide in the next 20 years on decommissioning the world’s aging fleet of reactors, Thomas LaGuardia, an American nuclear engineer who is helping the IAEA to establish decommissioning guidelines, said in an interview. Nuclear operators that haven’t saved sufficient decommissioning funds may opt to put plants in safe storage until their accounts bulk up, he said.
- Project management and environmental remediation companies in the U.S. and Europe could see their markets grow as utilities draw down decommissioning funds to shut aging reactors, Swedish radiation safety analyst Simon Carroll said in an interview.“One person’s cost is another man’s income,” he said.
Sweden’s decommissioning fund fell 0.5 percent last year, Carroll said in an e-mail. The country reported on Tuesday that returns on it’s 59.3 billion krona ($7.3 billion) Nuclear Waste Fund also dropped 0.5 percent in 2015.
The economic meltdown of nuclear power should be a wake-up call for investors and governments
Once a reactor has reached the end of its lifetime, the cost for decommissioning and storing nuclear waste for hundreds to thousands of years have to be borne. Utilities have a mandate to make provisions for this, but whether the funds will actually suffice remains to be seen.
While the level of feed-in tariffs has been reduced for wind and solar in countries like Germany and Switzerland to reflect technology learning curves, the [UK’s] price guarantee for nuclear locks in the opposite trend.
The positive business case for non-renewable energies seems to come to an end. Thirty years after Chernobyl and five years after Fukushima, the economic meltdown of nuclear power should be a wake-up call for investors and governments
Nuclear power’s economic meltdown 30 years after Chernobyl http://www.swissinfo.ch/eng/energy-rethink_nuclear-power-s-economic-meltdown-30-years-after-chernobyl/42109822 By Rolf Wüstenhagen 25 Apr 16 Thirty years later, the nuclear industry is facing a meltdown of a different kind: an economic meltdown.
They went on to conclude that each of the middle three of these risks alone would be enough to “bring even the largest utility company to its knees financially”.
Two years after the report was published, Citi’s claim was empirically validated. The meltdown in three reactors of the Fukushima Daichi nuclear power plant in Japan led to widespread contamination.
The event marked a human and environmental tragedy, but the magnitude of the financial loss – estimates of which range from $250 billion (CHF242 billion) to $500 billion – also forced the operating company, Tepco, into the largest government bail-out in Japanese economic history.
Sharp rethink Continue reading
Toshiba to lose 260 billion yen due to losses over Westinghouse nuclear power subsidiary
Toshiba expects loss over Westinghouse to reach 260 bil. yen , Kyodo News, 26 April 2016 Toshiba Corp. said Tuesday it plans to book an asset impairment loss of around 260 billion yen ($2.3 billion) in its results for the year to March 31 by writing down the value of its U.S. nuclear power subsidiary Westinghouse Electric Co. acquired in 2006……
Toshiba said its operating loss for the year is now pegged at 690 billion yen, compared with its earlier forecast of 430 billion yen, on sales of 5.5 trillion yen against the earlier projection of 6.2 trillion yen.
“We don’t think our financial conditions have stabilized…so reinforcing our (financial) standing is the biggest challenge in the current business year,” President Masashi Muromachi told a press conference.
In computing the write down on Westinghouse, Toshiba reviewed the $2.93 billion in goodwill, or 350 billion yen based on the exchange rate at that time, it booked when acquiring the U.S. nuclear plant builder.
The goodwill, calculated by deducting from the purchase price the value of the assets and liabilities acquired, was reported on the balance sheet as a fixed asset…….http://kyodonews.net/news/2016/04/26/58694
Toshina writes down the value of its nuclear business
Toshiba to Take $2.3 Billion Write-Down on Nuclear Business, WSJ, Toshiba also revised earnings guidance for the fiscal year, forecasting a larger operating loss By TAKASHI MOCHIZUKI April 26, 2016
TOKYO—Toshiba Corp. said it would write down the goodwill value of its nuclear-power-plant business, including its U.S. subsidiary Westinghouse Electric Co., after years of criticism that the company’s outlook on the business was too optimistic.
The electronics giant said Tuesday that it would book the one-time loss of ¥260 billion ($2.3 billion) to reflect the change in the business’s earnings prospects and Toshiba’s financial standing.Toshiba’s recent financial scandal led to downgrades of its debt,which will make borrowing more expensive and so hurt profits.
The impairment charge will be recorded in results for the fiscal year that ended on March 31, due to be reported May 12…….http://www.wsj.com/articles/toshiba-to-take-2-3-billion-write-down-on-nuclear-business-1461654771
French and Russian nuclear utilities to work together, on decommissiong, and more
French and Russian nuclear utilities extend collaboration, World Nuclear News, 26 April 2016
French utility EDF has signed an agreement to extend its cooperation with Rosenergoatom, the operator of Russia’s civil nuclear power plants. The companies will cooperate in reactor operations, decommissioning and waste management…..
Through the agreement, EDF and Rosenergoatom intend to develop cooperation in areas such as the maintenance, modernization and operating period extension of nuclear power plants, as well as decommissioning and radioactive waste management http://www.world-nuclear-news.org/C-French-and-Russian-nuclear-utilities-extend-collaboration-2604164.html
Nuclear power workers protest in Ukraine
Ukrainian nuclear power workers to protest on 30th Chernobyl disaster anniversary Rt.com 25 Apr, 2016 Ukraine’s state nuclear energy giant says all employees of the country’s nuclear plants will stage a massive protest over its frozen assets in Kiev on Tuesday, as the world will be marking the 30th anniversary of the Chernobyl disaster.
Energoatom, the operator of Ukraine’s four functioning nuclear plants, saidon its website on Monday that its workers resorted to such “extreme measure” because of the “inaction” of the state in addressing the issue of “unjustified seizure” of the company’s assets.
The assets freeze led to Energoatom stopping payments for nuclear fuel, nuclear materials and removal of used nuclear fuel, it stressed.
“The payment arrears may result in the delay in the supply of nuclear fuel to Ukrainian nuclear power plants and therefore stoppage nuclear power units,” the company warned.
The wages of the employees are also under threat, the statement by state-owned Energoatom added.
The protests action was scheduled after attempts to resolve the issue “peacefully” by the nuclear worker’s union turned out unsuccessful, it said.
The Energoatom assets were arrested in March after the court ordered to collect 127.3 million hryvnia (around $5 million) of debt from the company.
The debt to Ukrelektrovat company “is not confirmed by any primary accounting documents, while the liability of 2.5 million hryvnia that had been present on Energoatom’s balance account was written off in 2004 due to the expiration of the statute of limitations,” it explained.
The amount of the debt was artificially increased after legal enquiry by an individual expert, whose conclusions were put in doubt by the Justice Ministry and led to the launch of a criminal case, Energoatom said.
In April, the company has sent an open letter to Justice Minister, Pavel Petrenko, urging him to interfere into the situation, but the plea was ignored by the official……..https://www.rt.com/news/340902-ukraine-chernobyl-nuclear-protest/
Further delay for UK Hinkley nuclear project, as EDF decides to consult unions
Fresh setback for Hinkley Point as EDF consults French unions, Telegraph UK Alan Tovey 22 APRIL 2016 Plans by EDF to build the new Hinkley Point nuclear power station have been further delayed after the French energy company said it would consult with unions before announcing its final investment decision.
After a board meeting on Friday, the company said it had agreed a “significant” recapitalisation that would make it “possible for EDF to proceed with its strategic investment programme – including Hinkley Point C”.
However, the directors added they would go through a formal consultation process with unions over the decision. Although it will not be binding on the board, this statutory process would take 60 days, pushing it close to the June 23 referendum on whether or not Britain will remain in the UK.
Sources close to the French government – which is EDF’s majority shareholder with an 85pc stake – said administrative delays could easily push this consultation past the date of the Brexit vote.
Consulting the unions over the decision presents fresh hurdles to the muchdelayed plan to build the Hinkley Point power station, the first in a fleet of new nuclear power stations for the UK.
Ten years ago, EDF was predicting Hinkley would be supplying power by 2017.
Unions are sceptical about whether EDF can afford the investment – which the French firm is financing two thirds of, with the rest coming from Chinese investors – and have made public their opposition to the scheme.
Some senior staff at EDF are also against the power company’s involvement in such a huge project…….http://www.telegraph.co.uk/business/2016/04/24/fresh-setback-for-hinkley-point-as-edf-consults-french-unions/
Employee’s legal threat hangs over EDF’s U.K. Nuclear Project
EDF Unions Threaten to Go to Court Over U.K. Nuclear Project, Bloomberg, Francois De Beaupuy April 22, 2016
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Employee representatives ask to be consulted before decision
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Trade unions say they’ll sue if not consulted in advance
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Electricite de France SA’s unions are threatening to take the company to court if employees are not consulted in advance on a decision concerning a proposed 18 billion-pound ($25.8 billion) U.K. atomic plant project.
EDF’s workers committee, which includes representatives from the biggest unions, met near Paris and voted to take legal action should the company fail to consult employees on Hinkley Point, according to a statement Thursday. The project is key to EDF earnings and has prompted disagreements between management and unions, it said.
“We ask that the workers’ committee is consulted before any decision by management or the board,” the committee said. If that didn’t happen then “the committee would be forced to take legal action to have any decision linked to the Hinkley Point project suspended or annulled.”
The threat marks the latest attempt by workers to delay a decision, given concerns about EDF’s finances amid falling power prices across Europe. Union FO has already threatened to call for a strike. EAS, an association of EDF employees holding the company’s shares, is asking the stock market regulator to require that the French government, which owns 85 percent of EDF, repurchases shares at the initial public offering price…..http://www.bloomberg.com/news/articles/2016-04-21/edf-unions-threaten-to-go-to-court-over-u-k-nuclear-project
USA wind energy investment – over $128 Billion
By staying on track to supply 20 percent of U.S. electricity by 2030, wind energy could support 380,000 well-paying jobs, according to the U.S. Department of Energy. That number could grow to 600,000 by supplying 35 percent by 2050
More Than $128 Billion Dollars Invested in U.S. Economy by New Wind Power Projects,Wind Systems, 25 Apr 16 Building new wind farms in the U.S. added $13 billion per year on average to the American economy over the past five years, according to information recently released by the American Wind Energy Association (AWEA).
“By building new wind farms across the country throughout the past decade, wind companies have invested $128 billion into the U.S. economy,” said Tom Kiernan, CEO of AWEA. “Over this time, wind has rapidly scaled-up. Now, there is enough wind power installed to reliably produce electricity for more than 19 million American homes. Continuing to invest in world-class wind resources here at home will help keep our lights on, grow state economies, and keep more money in the pockets of homeowners and businesses.”
Wind energy was the number-one source for new electric capacity additions in 2015 with 8,598 MW installed. That number translates to $14.7 billion dollars in wind project investments in one year — a 73-percent increase over the $8.5 billion invested in new projects in 2014 and a more than seven-fold increase over investments by wind in 2013……..
The new investment figures made by wind come shortly after a new accord that was announced by a bipartisan group of 17 governors who made the pledge to accelerate clean energy growth, including wind power, as a way to build “a new energy future.” The accord said that creating this new energy path will result in a “more durable and resilient infrastructure and [will] enable economic growth while protecting the health of our communities and natural resources.”
Wind power costs two-thirds less than it did six years ago because of American innovation and improved domestic manufacturing, with more than 500 factories across 43 states building wind turbine parts and materials, and those savings are being passed on to U.S. consumers. Wind power saved consumers $1 billion over just two days across the Great Lakes and Mid-Atlantic states during the 2014 Polar Vortex event.
Wind energy in the U.S. produces enough electricity for more than 19 million American homes, and American wind power supports 73,000 well-paying jobs across every state, including nearly 20,000 manufacturing jobs.
By staying on track to supply 20 percent of U.S. electricity by 2030, wind energy could support 380,000 well-paying jobs, according to the U.S. Department of Energy. That number could grow to 600,000 by supplying 35 percent by 2050. http://www.windsystemsmag.com/article/detail/1167/more-than-128-billion-dollars-invested-in-us-economy-by-new-wind-power-projects
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