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Problems For UK Nuclear Energy Plans As Troubles Mount For EDF & Toshiba

February 15, 2017
tags:

By Paul Homewood

 

h/t Patsy Lacey

 

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http://www.telegraph.co.uk/business/2017/02/14/edf-shrinks-dividends-weak-energy-markets-drag-earnings/

 

Problems piling up for EDF. From the Telegraph:

 

EDF, the French energy giant building the new nuclear plant at Hinkley Point, plans to shrink its dividends for next year as it wrestles with the spiralling costs of maintaining its ageing nuclear fleet in France .

The company issued three profit warnings last year following a string of unplanned nuclear plant shutdowns ahead of its €55bn nuclear upgrade programme. In the clearest sign that the financial pressure facing the group will continue EDF said it will cut its dividend ratio by over 10 percentage points in 2018.

EDF plans to pay its shareholders a dividend ratio of 60pc of its income, or €2.1bn, for 2016 but this will fall to 50pc of recurring earnings by 2018 as the company tasked with building the giant Hinkley Point nuclear plant in Somerset faces looming multi-billion euro costs of upgrading its own aging fleet of nuclear reactors.

EDF’s shares slipped by over 2pc to €9.20 as the company revealed the full impact of the triple hit of nuclear outages, maintenance costs and sluggish market prices which weighed its operating profit down by over 15pc to €4.1bn, compared to €4.8bn in 2015.

EDF’s earnings before interest, tax, depreciation and amortisation fell 6.7pc to €16.4bn last year and is expected to fall further to between €13.7bn to €14.3bn in 2017.

The group is resorting to aggressive cost cuts and plans to issue €4bn in equity in the coming months, of which €3bn will be taken up by the French government in order to shore up its shaky balance sheet.

http://www.telegraph.co.uk/business/2017/02/14/edf-shrinks-dividends-weak-energy-markets-drag-earnings/

 

Even if Hinkley does end up getting built, it looks increasingly unlikely that Sizewell C and Bradwell B will go ahead, as EDF simply don’t have the capital.

 

Meanwhile the second leg of UK nuclear policy risks being derailed, with Toshiba threatening to pull out of the Moorside project:

 

 

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The UK’s plan to build Europe’s largest nuclear power plant risks being derailed after lead developer Toshiba admitted it would have to take billions of pounds’ worth of write downs in its nuclear business and said it would scale back its overseas ambitions.

The consortium behind the plans to build a giant 3.8GW nuclear power plant in Moorside in Cumbria was forced to defend the future of the £10bn project after the Japanese conglomerate said it would scale back its work outside of Japan after booking a 712.5bn yen (£5bn) writedown in its nuclear power business.

Toshiba is a 60pc shareholder in the NuGeneration consortium, which plans to develop the Moorside project alongside France’s Engie, formerly known as GDF Suez. The new plant is slated to use the AP1000 nuclear reactor, which is made by Toshiba’s US-based nuclear company Westinghouse.

 

But in a shambolic financial reporting day the embattled company raised doubts over its long-term commitment to Moorside, saying it would “consider participating in the project without taking on any risk from carrying out actual construction work".

http://www.telegraph.co.uk/business/2017/02/14/toshiba-takes-5bn-nuclear-writedown-chairman-resigns/

 

The UK’s Nuclear Industry Association has warned that more than two thirds of the country’s power generation capacity would be retiring between 2010 and 2030.

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44 Comments
  1. February 15, 2017 7:36 pm

    Here we see the results of about thirty years of successive Governments’ incompetence. Don’t let any politician claim we didn’t say “we told you so”.

  2. A C Osborn permalink
    February 15, 2017 7:47 pm

    The way that their finances are going I wonder if Toshiba will even be around to start the work.

    • February 15, 2017 8:50 pm

      Long article on Toshiba in the WSJ today. Looks like they will sell the profitable flash business and let the rest go bankrupt. Puts a >$1 billion hit on the two utilities with the 4 US Toshiba nucs under cobstruction but late and far over budget, because they have to get finished and there is no way Toshiba in bankruptcy can be forced to proceed. With the losses on 4 US nucs, and with 4 in China also behind schedule and over budget, Toshiba now has negative capital after correcting for the accounting scandal last year. Chairman resigned today.

  3. 1saveenergy permalink
    February 15, 2017 7:48 pm

    The future looks ‘interesting’
    No coal power, No gas power, No oil power, almost No hydro power, negligible wind + solar, wood burning is bad for everyone / everything, & now….. No new nuclear.

    Successive governments have / are turning us into a 3rd world country.
    Maybe we should take our glorious leaders & render them down into candles !

    • tom0mason permalink
      February 16, 2017 1:35 am

      Yep, time to get into the Tesla and roll to the next charging station.

  4. February 15, 2017 8:21 pm

    Why not just build exact replicas of the most successful designs of the past 50 years?

    • tom0mason permalink
      February 16, 2017 1:37 am

      That would incur a massive political and bureaucratic deficit that this government could not endure.

    • JamesG permalink
      February 16, 2017 1:09 pm

      Yep. Sizewell B was built on time and under budget. The newer designs were supposed to be cheaper but clearly that was typical nuclear industry misdirection.

      • RogerJC permalink
        February 17, 2017 9:44 am

        Sizewell B was a one off design, it’s the UKs only PWR. It was constructed by a cumbersome process with appears to be being repeated at Hinkley. For example the company I worked for was involved in the pipework contract as a member of a consortium. This made for terrible communications as not only did the three companies in the consortium have to interface with each other they also had to interface with all those other companies who were supplying things such as Steam Generators, Turbines, Pumps, Coolers, Tanks, etc under separate contracts. This is where having a single EPC contractor makes a project so much easier and subsequently cheaper as an EPC fixes all the interfaces internally.

      • JasG permalink
        February 18, 2017 10:32 pm

        Your right Roger. It could have been a whole lot cheaper still, especially for units 2 to n which needed no mechanical engineering work.

  5. February 15, 2017 8:56 pm

    Nucs take too long under current supply situation. Fastest is new CCGT, about 2.5 years. If you don’t have gas, we can build more LNG capacity and sell it to you. The problem is no one will do that until guaranteed baseload, which means the foolish renewable priority has to go. UK will go dark before that happens given your current politics.

    • February 15, 2017 9:39 pm

      It’s funny you should say that. The Government has issued a Green Paper for consultation entitled ‘Building our Industrial Strategy’, of which one chapter is entitled ‘Delivering affordable energy and clean growth’. My partly completed consultation response says that we must get rid of the renewables priority and build new baseload. I’m wasting my time of course in responding as the Government knows what it is doing and will not change its mind (not that the Government has any say in it – it is all decided by the civil servants).

      • Dave Ward permalink
        February 15, 2017 10:22 pm

        “It is all decided by the civil servants”

        Ah, yes – the real life “Sir Humphries” The 1980’s TV sitcom “Yes Minister” is being re-run at the moment, and it’s rather frightening to realise that what we laughed at all those years ago has turned out to be uncannily correct.

        The entire civil service needs to be shut down…

      • 1saveenergy permalink
        February 15, 2017 11:04 pm

        Dave, they are neither servants or civil

      • richard verney permalink
        February 16, 2017 10:55 am

        They are most certainly part of the UK Swamp that needs to be drained.

      • February 16, 2017 12:18 pm

        The jockeying for taxpayer funded / ransomed sinecures in the public sector is intense… The idea is not to deliver what is on the label but merely to inflate salaries and benefits while simultaneously attenuating accountability. I was surprised to see that the govt. department “The Highways Agency” is no more and it’s now Highways England – a “government owned company”.

        I feel safe in predicting we’ll see “Energy England” – staffed by the same bunch of obstructive, self serving quarter wits and NGO goons that have driven the electricity situation to its present near catastrophe.

      • JamesG permalink
        February 16, 2017 1:16 pm

        I remember Philip being a cheerleader for the new Westinghouse design that Toshiba have come a cropper on. So we all make mistakes but believing the nuclear industry propaganda is never wise. I’d have plumped for either more PWR’s or Candu – on the simple basis that the costs and timescale are predictable. But then I’d never have split up the CEGB based merely on an academic paper by Stephen Littlechild nor compounded this stupidity by privatising the national grid.

      • Gerry, England permalink
        February 16, 2017 1:54 pm

        Sorry, Dave, there is a mistake in your last sentence. You have got ‘u’ in the second to last word instead of ‘o’.

      • Robert Christopher permalink
        February 17, 2017 5:31 pm

        “… it is all decided by the civil servants.”

        How many have Science or Engineering degrees?

    • February 16, 2017 9:17 am

      Baseload was therefore one of the main targets of the renewables lobby, the Chief Scientist of Australia (Dr Finkel, an electrical engineer!) says it must go, but the UK decision to buy new nuclear suggests some level of commitment to baseload.

      Besides wind the other thing sneaking up on baseload is solar PV, minimum demand in South Australia is now often around noon, no longer overnight.

      • richard verney permalink
        February 16, 2017 10:58 am

        I am surprised by you last paragraph since I would have thought that high demand for aircon midday onwards would have kept up demand.

      • February 16, 2017 1:21 pm

        Yes, you are right, during heatwaves demand grows steadily during the day, but heatwaves are relatively rare.

  6. Athelstan permalink
    February 15, 2017 9:15 pm

    Merkel dumped German fission generated power post the Fukushima non global warming accident and of course they are ever logical are the Hun, they arrived at the only proper conclusion and 23 new burn coal fired plants were commissioned and so: stuff the green racketeers.

    Similarly as the was reported on this very blog site, the Japanese being a very practical and pragmatic people only concerned quite rightly with and primarily to national security and the comfort and long term prospects of its own peoples decided that because coal is cheap and plentiful that they would ignore all else and build – COAL FIRED GENERATION PLANT!

    Whereas, here in Britain we allow the NGOs, the Socialists and swampies loonies to dictate energy policy and we will be turning the lights off very soon, because the Communists of green who run things on these islands and Mother Theresa too told us, it is their wish to put us all back into literally,: a new dark age.

    • CheshireRed permalink
      February 15, 2017 11:53 pm

      Another bullseye post Athelstan.

    • roger permalink
      February 16, 2017 9:20 am

      EU parliament pass watered down reforms and carbon price remains at 5€.
      http://www.thegwpf.com/green-fury-as-as-eu-lawmakers-pass-watered-down-ets-reforms/
      No sign yet of Theresa reining back on Osborne’s unilateral and traitorous inflation of that piece of self harm.
      Slow and careful appraisal of facts can, taken to the extreme, resemble bovine cupidity rather than statesmanship.
      Once Article 50 is enacted, she must open a new front by revisiting the CC Act 2008.

      • Gerry, England permalink
        February 16, 2017 1:57 pm

        After Article 50 is triggered the government will hopefully be fully focused on the growing disaster of Brexit that it has set in motion as it finds out all the tings it should have done before triggering the Article. It is in for a massive shock.

    • February 16, 2017 12:20 pm

      +1

  7. February 15, 2017 9:28 pm

    Without a successful nuclear power sector in the UK, surely the climate change act is toast?

    • Gerry, England permalink
      February 17, 2017 1:34 pm

      Our government system is ‘learn by painful experience’ – they live in a bubble and only bubble-dwellers are listened to. People with common sense and knowledge live outside the bubble and can’t be hears. So we get lots of ‘oh, I didn’t think that would happen’ moments as their grand ideas play out. So until we have a full blown energy crisis, nothing will change.

  8. Green Sand permalink
    February 15, 2017 9:47 pm

    The answer to our energy problem lies beneath our feet. Dump our politicos into worked out mines and get fracking.

  9. A C Osborn permalink
    February 15, 2017 10:27 pm

    The first priority should be to ensure no Coal fired stations are closed and to give them first choice for baseplate.
    But as others have said this government will do the same as all the others and continue on the path to electrical generation oblivion.

  10. A C Osborn permalink
    February 15, 2017 10:31 pm

    Damned auto spell.
    Should be baseload of course.

  11. HotScot permalink
    February 15, 2017 11:56 pm

    I smell a very big rat.

    Being that we can accept the MSM of any hue will exaggerate the terrors of CAGW just to sell papers and subscriptions, we must accept that they would gleefully jump on yet another bandwagon to do the same.

    Whilst Toshiba may be in financial dire straits, I can’t imagine the Japanese government watch one of its industrial giants go down the toilet. And as Westinghouse is such a big player, and employer in the nuclear market, I somehow doubt Trump would be happy watching them follow Toshiba.

    EDF might be another story but with their European footprint, surely the French government won’t stand by and watch one of its major exporter’s contract back to domesticity.

    And whilst the green blob will start screaming that we’re all doomed (once again) unless we build more windmills, our own government must see the writing on the wall, stop subsidising the fools and start to invest in energy infrastructure.

    I just wonder if this isn’t all some clever stage management to ensure the green brigade are silenced, now Trump’s promising to do something about them, so we can get back to global energy business as usual. Well……as usual as it was 40 years ago.

    It just seems to me all a bit too coincidental that there is now a crisis crescendo of energy supply. And whilst something like this has been commonly predicted, it all seems a bit too convenient everything’s happening at once. Perhaps a bit of global manoeuvring by energy companies to scare the heebie-jeebies out European populations until the polls swing further away from the green blob.

    In many ways, in precisely the same way the blob used the MSM to terrify people that the world was going to end because of a minute trace gas that has only ever proven beneficial for the planet.

    Nor am I sure if it could be good, or bad. But it does make me wonder.

    • Farmer Ted. permalink
      February 16, 2017 5:28 pm

      Stage management? No.
      Who has been shutting “power” stations down?
      Who has been building “power” stations?
      There is your power shift.

  12. tom0mason permalink
    February 16, 2017 1:52 am

    Does anyone remember that at one time Britain had the knowledge and the skill to do it all by themselves? What happened?

    Building Calder Hall nuclear power station

    • mikewaite permalink
      February 16, 2017 8:49 am

      Yes some of us do remember . In particular I remember , as a student in the 60s , reading an article in Time or Newsweek that said :
      ” you will not believe this but the world’s leader in domestic(ie non -military) nuclear power is fusty, fuddy – duddy , old fashioned, Great Britain with almost more nuclear power than the rest of the world combined”
      Imperial College , then , had a complete sub-department dedicated to Nuclear Engineering and its own reactor near Reading for research and training .
      It is hard to accept what has happened to our once proud engineering prowess in just one person’s lifetime.

      • tom0mason permalink
        February 16, 2017 11:44 am

        And that recycled phrases from America was often repeated — “Electricity would be too cheap to meter.” and “This is the dawn of a new era”
        Halcyon days when optimism was high back then as Britain rebuilt itself.

  13. AlecM permalink
    February 16, 2017 10:18 am

    I told government in late 2010 that the windmills could never work, also that electric cars were a waste of resources and would increase CO2 emissions compared with present technologies.

    I then stated that the new nukes could not be built by private capital and proposed the only way to solve the problems. That technology, large scale micro-generation, is awaiting the go-ahead: it will take control of the Grid from the Renewables’ Mafia by massively reducing market prices AND replace the diesel STOR confidence trick created by Davey in 2012 to purport that the windmills produce despatchable power.

    We shall see what Mother Theresa proposes in the near future!

  14. It doesn't add up... permalink
    February 16, 2017 11:05 am

    Perhaps now they will start to talk more seriously to the South Koreans, who seem to have a nuclear industry that works, and provides power at less than half the cost of HInkley Point.

    • tom0mason permalink
      February 16, 2017 12:03 pm

      What an idea!
      Have the British government just take advice from knowledgeable professionals in the field, then run to whoever can supply a cheaper, proven technology that works, just on a whim?
      Do you not realize the huge political and bureaucratic deficit that would incur, to say nothing of the underemployment of all those much needed Quangos, special interest groups, important BBC Greenpeace advisors and environmental NGOs.
      Would you want to render all these people jobless just because Britain could, relatively quickly, install a cost effective South Korean Nuclear power plant, and just supply reliable electricity 24/7 for decades. Where’s the good in that?

      Maybe I need a permanent /sarc tag when commenting on this subject?

      • AlecM permalink
        February 16, 2017 12:17 pm

        Government knows its recent policies, set by membership of the EU, are guaranteed to create Grid Power cuts, raising electricity prices. The windmills, solar parks and smart meters have been developed to create a Grid Oligopoly by the Mafia which owns those assets.

        Their justification, that we have to avoid Global Warming from increased [CO2], is now being interred because it is based on fake science.

        There are two ways of escaping this impasse. The first is to force the poor to have power cuts at peak demand as we enter the new LIA. The second is to create sufficient off-Grid generating capacity in homes and businesses to reduce Grid demand hence prices. The efficiency increase will mean that for electricity and heat there will be ~40% reduction in natural gas use, ~65% if the local electricity is used to power a heat pump.

        This means the UK meets its CO2 reduction targets. However, the real benefit is that 10 GW of the new generating capacity can be used as STOR, knocking out the polluting and very inefficient diesel back up.

      • tom0mason permalink
        February 16, 2017 3:03 pm

        “Government knows its recent policies, set by membership of the EU, are guaranteed to create Grid Power cuts, raising electricity prices.

        Just like ENRON in California, where they kept manufacturing supply shortages so that the price increases could finance their stock market gambling.

      • Gerry, England permalink
        February 17, 2017 1:48 pm

        They almost certainly don’t have a clue where their policy is leading. We are all supposed to use less energy because our wonderful smart meters will show us how much we are using. However these mythical savings are unlikely to materialize unless it is by it becoming so expensive people can’t afford it.

  15. Dave Ward permalink
    February 16, 2017 12:29 pm

    “richard verney
    February 16, 2017 10:55 am

    They are most certainly part of the UK Swamp that needs to be drained.”

    But……the Environment Agency won’t let that happen – it would go against their “ReWilding” remit…

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