• 14 hours Oil Pares Gains After API Reports Surprise Crude Inventory Build
  • 15 hours Elon Musk Won’t Get Paid Unless Tesla Does “Extraordinarily Well”
  • 15 hours U.S. Regulators Keep Keystone Capacity Capped At 80 Percent
  • 16 hours Trump Signs Off On 30 Percent Tariff On Imported Solar Equipment
  • 18 hours Russian Funds May Invest In Aramco’s IPO To Boost Oil Ties
  • 19 hours IMF Raises Saudi Arabia Growth Outlook On Higher Oil Prices
  • 20 hours China Is World’s Number-2 In LNG Imports
  • 1 day EIA Weekly Inventory Data Due Wednesday, Despite Govt. Shutdown
  • 1 day Oklahoma Rig Explodes, Leaving Five Missing
  • 2 days Lloyd’s Sees No Room For Coal In New Investment Strategy
  • 2 days Gunmen Kidnap Nigerian Oil Workers In Oil-Rich Delta Area
  • 2 days Libya’s NOC Restarts Oil Fields
  • 2 days US Orion To Develop Gas Field In Iraq
  • 4 days U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 4 days Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 4 days Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 5 days Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 5 days Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 5 days TransCanada Boasts Long-Term Commitments For Keystone XL
  • 5 days Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 5 days Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 5 days Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 5 days Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 6 days Venezuelan Output Drops To 28-Year Low In 2017
  • 6 days OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 6 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 6 days Kinder Morgan Delays Trans Mountain Launch Again
  • 6 days Shell Inks Another Solar Deal
  • 7 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 7 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 7 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 7 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 7 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 7 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 7 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 7 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 7 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 7 days Norway Grants Record 75 New Offshore Exploration Leases
  • 7 days China’s Growing Appetite For Renewables
  • 8 days Chevron To Resume Drilling In Kurdistan
Alt Text

Nuclear Power's Resurgence In The Middle East

While nuclear power loses popularity…

Alt Text

Is This The End Of Nuclear Power In The UK?

The UK has been planning…

Leonard Hyman & William Tilles

Leonard Hyman & William Tilles

Leonard S. Hyman is an economist and financial analyst specializing in the energy sector. He headed utility equity research at a major brokerage house and…

More Info

Why Britain’s Bespoke Nuclear Program Won’t Work

Why Britain’s Bespoke Nuclear Program Won’t Work

To: David Cameron, PM

From: Unofficial Independent Energy Maven Advisory Policy Group (UIEMAPG)
Re: UK Nuclear Policy
Subject: Mr Cameron, Please Consider a Plan B, Not Just Hinckley Point C

In a speech last November titled “A New Direction for a UK Energy Policy”, your estimable new Department of Energy and Environmental Change Secretary, Amber Rudd, outlined her goals for Britain's energy future. With respect to electric power generation she made four key points.

First, coal fired power stations lacking environmental abatement would be phased out by 2030. More natural gas plants, like the Carrington unit, would be built. Needless to say the government expressed its commitment to "renewables" in preparation for a lower carbon emitting world. And lastly about mid way through her published remarks she spoke of the government's desire for an expanded nuclear fleet.

There has been much attention lately focused on efforts to get the Hinckley Point C nuclear project underway. The final investment decision was expected more than a month ago. EDF, the French utility that purchased most of Britain's nuclear infrastructure in 2009, has apparently been agonizing over this decision. EDF’s finance chief reportedly quit in opposition to the proposed plant. It appears that France will have to pump more money into EDF so that it can continue its efforts. And the pink paper reports that EDF’s engineers want a delay and a rework of the specs. Related: Oil Falls As Saudi Arabia Questions Freeze Deal

We realize that you have invested much political capital in Hinkley Point and may be preoccupied fighting the Brexit campaign, but we urge you to take time out to reconsider your nuclear strategy.

There are three other places where the AREVA designed EPR type reactor is being built.

• In Flamanville, France the project is at least five years behind schedule and costs have tripled.
• The Olkiluoto EPR in Finland is almost a decade behind schedule and two times over budget.
• Two Chinese EPRs, the Tianshin units in Guangdong, are believed to be somewhat behind and over budget.

This is not a track record that inspires confidence.

But regardless of the Hinckley Point C decision, a significant part of Britain's energy planning relies on a total of thirteen additional nuclear power stations.

Four groups have purchased sites where nuclear plants may be built. In addition to the Hinckley Point in Somerset, EDF also owns the Sizewell site where it may place two more EPRs, Sizewell C units 1 & 2. These would also be the relatively large 1670 MW units although no in service date is being publicly discussed.

Horizon Nuclear Power, formerly a joint venture between German energy companies, RWE and E.ON, is now owned entirely by Hitachi (Japan), which presently plans to build four ABWR type reactors at two sites, one at Wylfa in Wales and the other at Oldbury. There are several ABWRs operating presently in Japan and another planned for Visaginas in Lithuania. Horizon has filed for a General Design Assessment from British regulators, the first in a multi-step approval process. In service dates for these four units are presently described as being in the late 2020's. Related: Crude Crushed As Production Freeze Hopes Thaw

NuGeneration, also a former joint venture between Iberdrola and GDF-Suez, is now majority owned by Toshiba (Japan). NuGeneration purchased land at the Sellafield site and promptly renamed it Moorside, an excellent move considering the site’s history. It plans to construct three Westinghouse AP 1000 reactors rated at 1135 MWs which might go into service in the late 2020s. NuGeneration said it would make a final investment decision in 2018, although we would caution that Toshiba’s accounting issues and recent losses could impact the timing and investment decision.

And lastly, EDF's Chinese partner in Hinckley Point C, China General Nuclear (CGN), has purchased the Bradwell site outside of London. CGN, which has made no secret of its desire to enter the European market, has plans to construct two 1150 MW nuclear units of its own design, the Hualong One. EDF is also a minority owner in this venture with a 33.5 percent stake.

Several observations are in order.

First, the principal reason that the French and later the South Koreans could continually lower construction costs of their nuclear fleets is that they picked one design, standardized it and built lots of them. What the UK is proposing is almost bespoke nuclear construction with six sites and four different plant designs one of which, EDF's, is already proving “difficult". Think of it this way: more people can be clothed, per pound spent, at Marks & Spencer than at Savile Row. Well, maybe the cuts are different, but not the electricity. Related: Saudi Policy Tied to Weak Economy

In her address, Secretary Rudd extolled the virtues of privatization. Somehow she neglected to mention that these proposed nuclear units will not be built unless heavily subsidized by the government and the consumer. For example in 2013 the UK government announced a £10 billion loan guarantee for Hinckley Point C under the Guarantee Scheme for infrastructure financing. In addition the government agreed to a fixed price of £92.50 per MWhr for the plant's output a price roughly twice the market price for electricity. And even with both loan guarantees and a generous fixed price contract, indexed to the cost of living, the project is having difficulty getting traction. Maybe the capital markets are telling us something.

Our point here is simple. The Cameron government, despite its supposed faith in free markets, finds that it must provide extensive almost extraordinary guarantees for these nuclear projects. This will add to the government's debt burden and commit electricity consumers to decades of high prices. For these and other reasons the government should be working on a Plan B.

By William Tilles and Leonard Hyman

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • robert collins on April 04 2016 said:
    Everything you say is right, but the real question is, without nuclear what is the alternative? Renewables could be increased by a wide margin and electricity saving will help.The fact remains however that we face two problems, not only do we have to eliminate coal fuelled electricity generation but also we have to replace the power lost as our ageing fleet of nuclear reactors finally come off-line. Its impossible to see what will fill this massive gap.
    Relying on natural gas puts us back in the situation where we depend on a fuel source that ultimately is finite and will become progressively more expensive (unless of course you believe in the fairy story of abundant supplies being domestically recovered through fracking). Renewables do not make up for the loss of baseline power provided by coal and nuclear.
    Undoubtedly new nuclear is a dead duck- look at te current situation in France and Finland, we are never going to be able to bring enough capacity on-line in time,especially as every other European country with nuclear is facing the same problem. This is a train crash of mega proportions heading our way but governments seem incapable of grappling with it.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News