nuclear-news

Sizewell C signs multi-billion euro deal with nuclear reactor business Framatome

COMMENT. Apart from the fact that there seems to be negligible support for investment in this nuclear project , the UK government is here dealing with Framatome, which is not only the renamed failed company Areva, but has iself a worrying history of corrosion and sub-standard fuels – https://nuclear-news.net/?s=Framatome

By Shannon Eustace, BBC News, Suffolk, 19 Apr 24

A company that specialises in nuclear plant equipment has signed a multi-billion Euro deal with Sizewell C.

The nuclear power plant, partly funded by the French energy company EDF, is earmarked for land between Aldeburgh and Southwold in Suffolk.

Framatome has been awarded several contracts which will see them deliver two nuclear heat production systems……………………

The planned plant will be a near-replica of Hinkley Point C in Somerset, which Framatome has also worked on, and is expected to cost about £20bn, and take nine years to build.

Mr Fontana continued: “This project will benefit from the valuable experience garnered from Hinkley Point C and our teams are determined to make it a success.”

However, Alison Downes, from the Stop Sizewell C campaign group, wanted to know how the newly-signed contract would be funded.

“How can Sizewell C sign contracts for multi-billions of Euros when there is no evidence it has that kind of money, and a Final Investment Decision has not been made?” she said.

“The capital raise is ongoing and may still fail, and by its own account, EDF reached its financing cap for Sizewell C at the end of 2023, so the only money going in to the project at this point is from taxpayers.

“What secret promises has our government made? Have Ministers guaranteed that taxpayers will foot the bill for Sizewell C regardless of the cost, value for money, or any third party investment?”   https://www.bbc.co.uk/news/uk-england-suffolk-68849170

April 22, 2024 Posted by Christina Macpherson | business and costs, UK | Leave a comment

Abrdn and two more City giants shun Sizewell C nuclear project

Three of the City’s largest investment firms have confirmed they are not buying into the delay-stricken Sizewell C nuclear project.

City AM, RHODRI MORGAN, 15 Apr 24,

Emails seen by City A.M. show that representatives from Abrdn, Aviva and Phoenix Group each told anti-Sizewell C campaign group, Stop Sizewell C, that they were not looking to bankroll the project, which is expected to reach around £20bn in costs.

Phoenix Group, which has around £280bn in assets under management, has previously expressed interest in nuclear projects.

The decisions mark a further blow against the UK government’s struggling nuclear programme.

In an effort to shore up cash flows to rescue the delay-ridden Sizewell and Hinkley Point C projects, the government revealed a framework, many years in the making: The Regulated Asset Base (RAB), which would allow institutional lenders to buy into nuclear development.

But Abrdn, Aviva and Phoenix Group’s failure to get onboard adds to a growing list of major financial houses, including pension funds of BT, Natwest and Nest, to snub the project.

“The strategy has not succeeded,” said Stop Sizewell C’s executive director Alison Downes.

“It is hardly a surprise considering the many uncertainties, including what the project will actually cost and we congratulate those pension funds that have steered clear of Sizewell C’s capital raise, and urge the handful that have not decided to hotfoot it out immediately.”

The government is currently the majority shareholder and is currently investing a total of £2.5bn in financial support for the project…………………………

Sizewell is not the only major reactor project hampered by sky-rocketing costs and time delays.

Hinkley Point C, initially due to be operational in 2017 with a £18bn bill is now expected to be completed by 2031 and cost up to £35bn.

Accounting for inflation, this could potentially rise to £46bn and France’s state energy company EDF is on the hook for an £11bn impairment charge on the project.  https://www.cityam.com/abrdn-and-two-more-city-giants-shun-sizewell-c-nuclear-project/

April 17, 2024 Posted by Christina Macpherson | business and costs, UK | Leave a comment

Fresh blow for UK nuclear as the City snubs Sizewell C

By FRANCESCA WASHTELL , 14 April 20 24, https://www.thisismoney.co.uk/money/markets/article-13304269/Fresh-blow-UK-nuclear-City-snubs-Sizewell-C.html

Britain’s flagship nuclear plant could face greater dependence on foreign cash after a string of big-name City firms snubbed a chance to fund the project.

Phoenix, Abrdn and Aviva had said they would consider supporting new nuclear plants and were thought to be in the running to back Sizewell C in Suffolk.

But all have now said they are not in negotiations to take an equity stake in the power station, according to emails sent to campaign group Stop Sizewell C and seen by The Mail on Sunday.

This is a bitter blow for Ministers, who spent years changing the funding model for giant infrastructure works to entice City investors such as Phoenix and Aviva. The model, known as the regulated asset base, enables investors to receive dividends on projects still being built.

Sizewell C has been dogged by delays for years, and the Government has still to finally decide whether it will go ahead. 

A series of pension funds, including BT, NatWest, and Nest, have ruled out backing the plant, which will cost at least £20billion. 

Alison Downes of Stop Sizewell C said: ‘The Government has spent years planning and legislating to allow the funding model for Sizewell C, with the objective of attracting UK pension funds. The strategy has not succeeded, which is hardly a surprise considering the many uncertainties, including what the project will actually cost.’

In January, the Government committed a further £1.3billion of funding to Sizewell C, which will go on early building work.

Six groups are in talks with the Government over funding the project, with at least one understood to be from the Emirates.

British Gas owner Centrica is also thought to be in the frame.

Pressure is mounting after EDF this year began pressing the Government to help fund cost overruns on Hinkley Point C in Somerset. The French utility group said the price tag for that plant – which is the same type planned for Sizewell C – could hit £46billion from an initial estimate of £18billion. The Suffolk plant could power six million homes for 60 years, but would take nine to 12 years to build.

Ministers have also backed programmes to set up small nuclear reactors, especially a Rolls-Royce-led firm designing these easy-to-assemble plants.

Industry sources say these are likely to be more attractive to investors as they are quicker and cheaper to build.

April 16, 2024 Posted by Christina Macpherson | business and costs, UK | Leave a comment

Sizewell C Fiasco Part 4. Much more expensive than renewables- Unknown cost or period for Investors

Sizewell C Fiasco Part 4 Much more expensive than renewables- Unknown cost or period for Investors

Sizewell C was given the go ahead against the advice of the Planning
Inspectorate by politicians who have since mainly been discredited. They do
not have the finance in place yet – a staggering £30 billion plus?

Yet the Government have been chucking hard pressed taxpayers’ money at the project
and Sizewell C Project have started massive pre-construction works. If they
can cause this much Eco/ Landscape devastation even now, what will they do
if they get the go ahead on construction?

Sizewell C would be a disaster
for the Environment and the Landscape. Taxpayers and Investors will be
financing a bottomless pit. Locked in for decades to paying much more than
the cost of wind or solar energy. Even if finished on time – which is very
unlikely – it would be far too late for any energy crisis. Which would be
caused by the current bad or lack of – planning and management for energy
production and a hopeless so-called National Grid (run for shareholders not
UK Taxpayers).

If built Sizewell C would be too late to contribute to net
zero and its construction would produce vast amounts of carbon and other
pollution for well over a decade at least. Not to mention the much more
radioactive waste from this unproven EPR type of reactor which is too hot
to move until the next century – so has to be stored on site on an eroding
coastline! The whole thing is bonkers!
Stop Sizewell C 8th April 2024 https://www.youtube.com/watch?v=o4ICw23iYY0

April 16, 2024 Posted by Christina Macpherson | business and costs, UK | Leave a comment

Why you probably shouldn’t become a Community Interest Company

 4 December, 2016 by preorg,  https://preorg.org/why-you-probably-shouldnt-become-a-community-interest-company/

Imagine you have sacrificed hundreds of hours of your volunteering time to a non-profit organisation doing good work. After years of effort, often exhaustion, you discover that the directors don’t care that much about whether you succeeded in helping those people you intended to help. They care mostly about how much time they can spend at the swimming pool at their second home in Spain. Your volunteer hours have helped fund that lifestyle.

How could such a situation arise? Aren’t charities supposed to have boards of governors that keep the organisation on track? But wait, it wasn’t a charity! It was a Community Interest Company. Now, I should say that I don’t currently know of any such dramatic betrayals of people’s goodwill. But what I will argue here is that this situation arising in some CICs is bordering on inevitable, given the operating parameters of CICs. Given the weakness of regulation of the companies, almost boasted about by the CIC Regulator, it’s only a matter of time.

Why would I think that? Most people seem happy with CICs; Community Interest Companies are a success story, we are told. There are now many thousands of CICs in the UK, all having appeared within the space of ten years. This rapid rise in fact means that many people have chosen a form the long-term resilience of which has yet to be tested. It would be exciting to write an article about all the horribly failed CICs littering the social economy landscape. But I don’t know of any; I can only do a much less exciting job: pointing out what’s wrong with CICs before they start to fail. My contention is that, with the help of an FOI request to the CIC Regulator, we can see that certain types of failure are predictable. As for why we haven’t seen the failures yet, it is largely because CICs are young and in most of them the founders are still in charge.

The CIC was designed for organisations with social goals. It must operate in the ‘community interest’, which is defined in the articles of the organisation. It is also chosen over charities as an organisation that can more easily buy and sell commercially. But among the people I have asked, the main reason for opting for a CIC has been that it is easy. It is a lightweight structure, it is unencumbered by bureaucracy. It can be set up in a couple of days and can adapt quickly to changing conditions since it doesn’t have long lists of rules in its constitution. More like a standard profit-making company then, but with social objectives built in. Supposedly. More on that later.

By comparison both charities and co-operatives or community benefit societies (BenComs) have a lot more rules. Rules! How annoying! How limiting! But hang on a moment, why, if rules are so tedious, do those other organisations bother with them? The answer is that most of the rules are about accountability. In the case of a charity, the board of trustees, who must be consulted on significant matters, exist to keep the charity in line with its social aims. In co-ops and BenComs it is the membership who must constantly be consulted, and who choose who leads the organisation. Democracy certainly can be quite annoying.

By comparison a standard CIC is at the mercy of its directors, who needn’t even be many in number. That’s fine, I hear some say, I am the director, and I trust myself to make good decisions. Perhaps, but do you intend to lead the organisation forever? Even if you plan to live forever, what happens if you get ill, or leave through some other reason beyond your control? The purpose behind many accountability mechanisms is that they transcend the ideals of one particular person. They embed the ethics and goals into the DNA of the organisation, whoever may be running it at a given time. So how long do you want your organisation to last?

There is one supposed accountability mechanism in CICs: the government regulator. In theory the Office of the Regulator of Community Interest Companies has a lot of power to force CICs to stick to their aims. In practice it appears to do very little, priding itself on being a ‘light touch’ regulator. When I contacted the Regulator, they explained that in the last year they received 57 complaints, only 3 of which resulted in an intervention by the regulator. None of these 3 were related to the community benefit requirements. The Regulator has so far never wound up a CIC or stripped one of its CIC status. The Regulator has no records of intervening in a CIC on the basis of the standard paperwork submitted each year, which in part reports on the organisation’s performance under its community benefit requirement. That is to say, there appears to be no pro-active monitoring of whether CICs are operating for community benefit.

Even Social Enterprise UK, a fan of the CIC form, has raised questions over the strength of the Regulator. This accountability mechanism begins to look weak, to say the least. I’m not sure it will ever improve either. I doubt the regulator will ever be well enough funded to investigate what is going on in tens of thousands of organisations. We should not look for accountability in the CIC regulator.

Let’s move on to another question, a special case of the accountability problem: what profits can be made from a CIC, often presented as a non-profit structure? There is a CIC limited by shares that is allowed to make a profit. Previously there was a dividend cap of 20% of share value in any given year. This was considered by the government to be ‘inhibiting investment’ so in 2014 they removed the cap. Say that again? Annual 20% profits inhibiting investment?

Let’s leave that aside. In fact the majority of CICs are limited by guarantee and are more genuinely non-profit in form. There are, however, a couple of massive catches. The directors of a CIC can pay themselves whatever they can argue could reasonably be seen as necessary, as long as they are still fulfilling their social objectives. As determined by the aforementioned ‘light touch’ regulator. A CIC with a turnover of some millions a year could in theory pay the directors a million a year, if they could argue that without the salary they couldn’t retain the talent they need. Is it still a non-profit? This raises the aforementioned scenario of people putting in hundreds of volunteer hours for a supposed non-profit while the directors are buying holiday homes in the Mediterranean.

The second problem is that nobody is paying any attention to who CICs contract out work to. If a CIC pays huge ‘management fees’ or overpays on a cleaning contract to a company that happens to be owned by, say, the partner of a director, any money in the organisation can very easily be siphoned out to profit-making enterprises. In a charity the board and regulator would keep a sharp eye on this type of activity; the CIC regulator barely seems to glance at the paperwork.

You, the current director, might not abuse your position so, but can you be so sure of your successors? We only need to look at Housing Associations for a case study in organisational mission drift, in part driven by the high salaries CEOs have been able to pay themselves.

A word too on putting an informal democratic structure on top of an undemocratic CIC: I’m told that the Centre for Alternative Technology in Wales acted for years like a co-operative, and those involved assumed that’s what it was. But it never took a co-operative legal form, so when it ran into trouble, new leadership bulldozed aside the democracy people had assumed was one of the core values of the organisation. CAT is at least a charity, but the lesson is that informal structures can be dispensed with any time the CIC directors get tired of them.

But surely there must be a right situation for a CIC? Perhaps. A CIC could be right for an organisation that is mostly a trading organisation and is for a short-term project which won’t exist for long. If the project is intended to run long-term, I don’t believe the CIC is a reliable form. It is at the mercy of the leadership that follows you, if not your own leadership. The CIC Regulator is not the safety net you need. For most people it would be worth choosing an organisational type that seems more ‘difficult’ in the short term, but will almost certainly be more sustainable and accountable in the long run.

For existing successful CICs, why would they bother to change if they are doing well as they are? Let’s remember they are still young organisations. Do we want to wait twenty years to see the emergence of accountability and mission-drift problems that are, I am suggesting, rather predictable? Mission-drift that the Regulator will never pick up on unless someone reports it?

There are a few ways to mitigate the risks here. The best option for many would be to convert into a co-operative CIC. Co-ops UK offers one set of model rules for this, and the Somerset Rules can also convert a CIC into a multi-stakeholder co-op. It will cost time and money, it is true, to change the rules, but it will surely not be as painful as the organisation going off track in a few years’ time after the founders have retired.

The second best option is to add democratic rules to the CIC. It is a benefit of CICs that they are very flexible. The CIC Regulator offers model rules of a participatory organisation of large membership, though it is still very much director-controlled. It is theoretically possible to set up a more democratic membership structure without being a co-operative. While this method may miss out on embedding some of the checks and balances that co-ops have developed over the years, it could make the organisation more accountable. But remember, rules that can be added can be taken away. Only co-ops and their cousins, community benefit societies, lock democracy in permamently.

Finally, if actual democracy seems too great a task, it is at least possible to simply install more directors onto the CIC board, preferably those affected by what the organisation does, and so establish a strong democratic culture among the CIC directors. It’s not a perfect fix, but increased collective decision-making will mitigate the problems of a top-down culture reliant on the goodwill of two or three people.

For those who haven’t started their organisation yet, this is a plea to consider that a sustainable organisation is an accountable one, and democracy is one of the best ways to ensure accountability. Thankfully others, in the form of the co-operative movement, have already paved the way for us.

April 14, 2024 Posted by Christina Macpherson | business and costs, UK | Leave a comment

Rolls Royce misses out on government funding for their small nuclear reactors

Rolls-Royce Holdings PLC shares faced a blow as X-energy and Cavendish
Nuclear were awarded £3.34 million from the government to build
mini-nuclear reactors in Hartlepool. These funds will aid X-energy and
Babcock International PLC owned Cavendish’s plans to build 12 mini nuclear
generators, known as small modular reactors, in the County Durham town by
the early 2030s.

Proactive Investor 5th April 2024

https://www.proactiveinvestors.co.uk/companies/news/1044518/ora-banda-mining-progresses-riverina-and-sand-king-underground-gold-mines-1044518.html

April 9, 2024 Posted by Christina Macpherson | business and costs, UK | Leave a comment