Britain’s retirement party begins

1 02 2018

There has been much discussion here about why George Monbiot, for one, continues pushing nuclear power…… he and many like him want to go ‘sustainable’, and  nuclear is no such option of course, but they also don’t want to abandon their toys. This applies just as much to the believers of renewable energy. However, they’re in for a rude shock…. because things there are about to get a whole lot worse. There were lots of reasons why Nicole Foss left the UK some years ago; if anyone could see the writing on the wall, it would of course be Nicole, There were lots of reasons for going, but one she mentions in a podcast I listen to was that the gas pressure was dropping.  Fancy that……...

Read on…….

The North Sea oil industry that underwrote Britain’s 1980-2008 neoliberal debt-binge is coming to an end.  Oil and gas production has fallen by more than 60 percent since the 1999 peak.  And since 2004/5 Britain has become increasingly dependent upon imports to meet its energy needs (ultimately a much greater threat to the economy than Brexit).

There is, however, one last binge to be had before we’re done.  According to Greig Cameron in the Sunday Times:

“It is the oil industry equivalent of a buzzards’ picnic. As the North Sea is drained of its oil and gas, so time is running out for the giant rigs that for decades have been piping fuel up from the seabed. Many of the basin’s workhorses are going to be little more than huge carcasses dotted across thousands of miles of open ocean and sharp eyes are turning to the potential feast on offer.

“You can see why. North Sea decommissioning is an embryonic £50 billion industry, a huge enterprise in which rigs and pipelines are removed, hauled ashore and painstakingly picked apart.”

Between now and 2022, 148 fields will be decommissioned; followed by a further 84 between 2023 and 2027.  Around 840,000 tonnes of materials will have to be brought onshore for recycling or safe disposal; and 1,600 wells will need to be sealed.

The final cost of this last gasp party is likely to be higher than Cameron’s £50 billion.  Government ministers have put the cost at £60 billion; and there is no reason to expect that decommissioning will buck the trend and come in on time and within budget.

The bigger question is who gets to pay for all of this?  In theory, the big oil companies were supposed to have set money aside against the day when the oil ran out.  But most of the big players have gone, and have sold the liability to smaller and less secure companies.  Indeed, as we saw with the now discredited Carillion, it is all too easy for a private company to collapse at a moment’s notice; leaving the public to pick up the bill.

If I were a betting man, I would put money on most of the wells remaining unplugged and most of the infrastructure remaining where it is.  But there again, by the time we reach that point, money (at least in pounds) is not going to be worth much.

A friend of mine, who lives in Scotland, has posted on Facebook that she cannot believe the number of oil rigs being towed up the river she can see from her abode, and left there to rust….. and they’re fast becoming an eyesore apparently. Is this what collapse looks like? Rusting oil rigs as far as the eye can see……?

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French nuclear financial crisis deepens

9 12 2016

French taxpayers face huge nuclear bill as EDF financial crisis deepens

Originally published on the Ecologist’s website…..

I alluded to this in response to some of Eclipse’s comments on some of my earlier posts. I’m of the opinion the entire global nuclear energy sector is about to go tits up….

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.

EDF’s biggest problem is the cost of producing power from these ageing power stations is greater than the wholesale price, so everything they sell is at a loss. It is impossible to see how they can ever make a profit. Then they still have to decommission.

The liabilities of Électricité de France (EDF) – the biggest electricity supplier in Europe, with 39 million customers – are increasing so fast that they will soon exceed its assets, according a report by an independent equity research company,

nuclear_power_432Bankruptcy 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.

New nuclear stations

Even more money is required to finish new nuclear stations EDF is already committed to building. The first, Flamanville in northern France, is five years late and billions over budget. Questions over the quality of the steel in its reactor are still not resolved, and it may never be fully operational.

Add to that the need for €12 billion (or potentially considerably more) capital to complete the two nuclear stations EDF is committed to building at Hinkley Point in southwest England, and it is hard to see where all the money will come from.

To help the cash-strapped company, its ultimate owner, the French state, has already provided €3 billion in extra capital this year, and decided to forego its shareholder dividend. But that is a drop in the ocean.

Mycle Schneider, a Paris-based independent international consultant on energy and nuclear policy, says: “The French company overvalues its nuclear assets, and underestimates how much it will cost to decommission them.

“However, EDF’s biggest problem is the cost of producing power from these ageing power stations. The cost is greater than the wholesale price, so everything they sell is at a loss. It is impossible to see how they can ever make a profit.”

He says that is not the company’s only problem: France has not dealt with the problem of nuclear waste, and has badly underestimated the cost of doing so: “With German electricity prices going down and production increasing in order to export cheap electricity to France, it is impossible to see how EDF can ever compete. It is really staggering that no one is paying any attention to this.”

Even former EDF director Gérard Magnin agrees. He resigned from the board in July as he thought the Hinkley Point project too risky for the company because of its already stretched finances. Now he says that, with the reactors closed for safety checks, the French nuclear industry faces “its worst situation ever”.

The company’s troubles do not stop in France, as EDF also owns the UK nuclear industry. Ironically, it took over 15 reactors in the UK after British Energy went bankrupt in 2002 because the cost of producing the electricity was greater than the wholesale price – exactly the situation being repeated now in France.

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.

 





The last nail in the Nuclear Coffin….

2 09 2013

Things have been looking grim at Fukushima.  First, they realised that for some time they had been using a radiation meter that could not read beyond 100 milli Sieverts and believed that this was the actual radiation level there….  only to find out with another instrument that levels were in fact much higher, and that hundreds of tonnes of highly radioactive water were leaking into the Pacific Ocean daily for….  well no one knows.

Then it was decided (as I recently reported) that fuel rods lying perilously in a damaged above ground leaking pool that keeps those rods from melting down and causing an actual out of control nuclear reactor (read explosion + mushroom cloud…) were going to be moved, by hand…  because?  Well the cranes that normally do this have been destroyed by the earthquake, presumably ably assisted by the tsunami.

At the time I commented “what could go wrong?”……..

Christopher Busby

Christopher Busby

Well….  things have actually taken a turn for the worse, even before the attempt to move the rods.  According to RT, a credible source as far as I’m concerned, the latest radiation surge can’t be blamed just on random leaks.  It suggests not only additional water leaks at the site, but could also mean fission is occurring outside the crippled reactor, according to Chris Busby, an expert on the health effects of ionizing radiation and qualified in Chemical Physics at the Universities of London and Kent.  He has worked on the molecular physical chemistry of living cells for the Wellcome Foundation.  Professor Busby is the Scientific Secretary of the European Committee on Radiation Risk from the European Committee on Radiation Risk.

Professor Busby said:

I think this is an indication that it has actually deteriorated significantly, very suddenly in the last week. What they are not saying and what is the missing piece of evidence here is that radiation suddenly cannot increase unless something happens and that something cannot be leakage from a tank, because gamma radiation goes straight through a tank. The tank has got very thin metal walls. These walls will only attenuate gamma radiation by 5 per cent, even when it is 1 cm thick.

Although they may think this is a leak from the tank, and there may well be leaks from the tank, this sudden increase of 1.8 Sieverts per hour is an enormously big dose that can probably kill somebody in 2 to 4 hours.

Today there was another leak found at 1.7 Sieverts per hour in more or less the same place. This huge radiation increase, in my mind means something going on outside the tanks, some radioactive fission is occurring, like an open air reactor, if you like, under the ground.

Radiation risks in terms of milliSieverts

We are no longer talking about readings in milliSieverts now (1/1000th of a Sievert).  Several new high radiation readings were detected during the daily inspection on Saturday near the tanks storing the radioactive water, forcing the operator to admit there might be even more leaks at the crippled Fukushima nuclear power plant.

Professor Busby believes the situation is clearly out of control and that no one can go anywhere near it.  “Nobody can go in to measure where these leaks are or do anything about them, because anybody who is to approach that sort of area would be dead quite quickly. They would be seriously harmed”

What happens next is anyone’s guess, but from where I sit, it can only get worse, and frankly, if I lived in Japan, I would get the hell out of there before the rush…..

This will have a domino impact on all nuclear reactors in my opinion.  The cost of keeping those still operating will have to go up, and as the cost of decommissioning them becomes clearly extraordinary, often more than double the cost of building them, and sometimes, like Sellafield, orders of magnitude more, and in a climate of disappearing liquidity………  nobody will be able to afford to build any nukes.  There simply won’t be the funds, as all the money that could have been used disappears down the blackhole of decommissionings.

And now THIS also from RT…

And they said it would be too cheap to meter……