05.11.2013
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The financials at Hinkley

Today, French energy expert Bernard Chabot takes a look at the available financial framework data for the two new reactors to be built at Hinkley Point. He finds the state loan guarantee played a crucial role in the agreement on the strike price.

When an official strike price (a feed-in tariff) was proposed for a new nuclear plant in the UK a few weeks ago, my colleague Thomas Gerke and I published an article comparing the price of this future nuclear power to current solar and wind – an unfair comparison in a way because solar and wind will become cheaper over the next decade.

In March, our guest author Bernard Chabot analyzed (PDF) the situation in the UK to see what the strike price would have to be without a governmental loan guarantee. Now, it seems that the British government will be guaranteeing 65 percent of the loan, and China will also be investing.

Today, (PDF) Chabot takes a hard financial look at the basic information available and finds that the new strike price was only possible because of the loan guarantees. His original estimation of the cost of new nuclear was more than £0.10 per kilowatt-hour, not the £0.925 announced. In other words, the actual cost of this nuclear power is even higher than the strike price. (Craig Morris)

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4 Comments on "The financials at Hinkley "

  1. Stephen Ferguson - 12.11.2013, 15:04 Uhr (Report comment)

    @James Wimberley
    I too would love to know what German renewable energy experts make of Professor David MacKay's work. Indeed he is pessimistic, saying for example that:
    "For any renewable facility to make a contribution comparable to our current consumption, it has to be country-sized. To get a big contribu- tion from wind, we used wind farms with the area of Wales"
    That is why Mckay implies nuclear is necessary (even with energy efficiency). One wonders if his subsequent DECC appointment suited the nuclear bias of the politiicians. Yet, coming from country that has little budget spent on renewables research and moreover has to import its renewable tech, is he out of date? I have seen reputable German experts such as from the Fraunhofer Institutes stating 100% renewables is possible. So who is right and who is wrong?

  2. Todd Millions - 09.11.2013, 23:40 Uhr (Report comment)

    If anyone in europe can still get data on 'nodding duck' wave generators,from 1980's,and the test section results,I would like too see the costs compared to these new nucs.The point of this design was,to use the arrays too replace and enhance harbour wave breaks and provide electrical power at the same time.M thatcher herself had too kill the project apparently.To cheap too reliable and not costs borne by taxpayers going too here arms dealer and oil mafia friends.

  3. heinbloed - 09.11.2013, 11:44 Uhr (Report comment)

    Foreign countries like Ireland and Denmark will flush the British grid with free electricity long before the first fuel rod is manufactured for Hinkley:

    http://www.greentechmedia.com/articles/read/postcard-from-the-grids-future-record-breaking-wind-integration-in-denmark

    http://www.telegraph.co.uk/earth/energy/windpower/10291432/Irish-Lilliputs-square-up-to-fight-British-wind-giants.html
    What the Telegraph points out as dwarfish without giving a real number will be twice of the total max. demand of Ireland, 8 GW

    http://renews.biz/47247/dublin-to-map-wind-exports/

    EDF knows why they want to get payed for " every potential " kilowatthour produced.....
    Imagine a similar condition for the PV-industry: they would get payed at night !


  4. James Wimberley - 05.11.2013, 15:54 Uhr (Report comment)

    The British obsession with nuclear capacity, at enormous cost, is supported by the DECC online scenario builder: 2050-calculator-tool.decc.gov.uk/pathways/ . This is based on work by its scentific adviser Professor David MacKay, whose book on sustainable energy is online: www.withouthotair.com/ MacKay and DECC have a much more pessimistic take on the solar potential of the UK than the equally qualified Volker Quaschning has on Germany. I'd be very interested to hear more on this from Craig, Bernard, and Thomas. You could ask Quaschning what he thinks of MacKay's work, and vice versa.

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