“Hinkley Point C: rising costs and long delays at vast new power station”

“The Hinkley Point nuclear site, on the Somerset coast, should have begun powering around 6m homes well over a year ago.

Instead, the 160-hectare (400-acre) sprawl is still the UK’s largest construction site more than a decade after the plan for Britain’s nuclear renaissance first emerged.

It will be at least another six years before Hinkley Point C, the first nuclear plant to be built in the UK since 1995, begins generating 7% of the nation’s electricity.

The price tag is expected to exceed £20bn, almost double that suggested in 2008 by EDF Energy, which is spearheading the project alongside a Chinese project partner.

At the time, EDF Energy’s chief executive, Vincent de Rivaz, said the mega-project would power millions of homes by late 2017. He pegged the cost at £45 for every megawatt-hour.

De Rivaz retired a decade later, but the promised switch-on moment remains distant. Delays have been blamed on protracted Whitehall wrangling over the project’s eye-watering costs: the price per megawatt-hour has since more than doubled.

Still, this summer workers carried out the UK’s largest concrete pour to complete the base of the first reactor. Simone Rossi, EDF Energy’s incumbent chief, said the milestone was “good news for anyone concerned about the climate change crisis”.

“Its reliable, low-carbon power will be essential for a future with no unabated coal and gas and a large expansion of renewable power,” he said.

The cost concerns have proved more difficult for executives and ministers to address.

The National Audit Office condemned the government’s deal to support the Hinkley Point project through consumer energy bills in a damning report, which accused ministers of putting households on the hook for a “risky and expensive” project with “uncertain strategic and economic benefits”.

Hinkley Point will add between £10 and £15 a year to the average energy bill for 35 years, making it one of the most expensive energy projects undertaken.

Under EDF Energy’s contract with the government, the French state-backed energy giant will earn at least £92.50 for every megawatt-hour produced at Hinkley Point for 35 years by charging households an extra levy on top of the market price for power.

The average electricity price on the UK’s wholesale electricity market was between £55 and £65 per megawatt-hour last year.

The dramatic collapse in the cost of wind, solar and battery technologies has made nuclear power even harder to swallow.

Despite its detractors, Hinkley Point has soldiered on because concerns over the project’s costs, although considerable, are still smaller than the concerns over the UK’s future energy supplies.

The project was first mooted under Tony Blair’s Labour government as an answer to the UK’s looming energy supply gap after years of underinvestment in the UK’s fleet of power plants.

The nuclear mantle was taken up in the coalition years by the Liberal Democrat energy secretary Ed Davey, before it was given the green light by the Conservative government.

Andrew Stephenson, the minister in charge of nuclear, said Hinkley was “key to meeting our ambitious target of net zero emissions by 2050”.

Nuclear power is controversial among environmentalists, many of whom do not consider the uranium-fuelled energy to be a sustainable option. But according to the government’s official climate advisers new nuclear reactors are needed.

The Committee on Climate Change expects renewable energy to play a major role filling the gap in energy supplies. Offshore wind will increase tenfold to help meet its 2050 target to reduce emissions to net zero, and the climate watchdog has called for onshore wind and solar to play a far larger role too.

But the advisers predict that at least two new nuclear reactors, in addition to Hinkley Point, will be required to help the UK meet its climate goals.

The verdict means households are likely to be called on to stump up for EDF Energy’s follow-on project at the Sizewell site in Suffolk. It also leaves the door open for a resurrection of plans to build reactors in north Wales, and possibly a Chinese-led nuclear project in Bradwell in Essex too.”

https://www.theguardian.com/uk-news/2019/aug/13/hinkley-point-c-rising-costs-long-delays-power-station?CMP=Share_iOSApp_Other

Where do profits go when British businesses are sold to foreign companies?

To disguise the fact that we are selling the family silver, these transactions are called “inward investment”. But how is tax levied and where do profits go?

And how come a Turkish pension fund can afford to buy the only British steel-maker left in this country when ours can’t/won’t?

A British windfarm, owned by a Spanish company is sold to an Australian company:

Macquarie buys $1.77 billion stake in mammoth UK offshore wind farm

A British steel company owned by an Indian company is likely to be sold to a Turkish military pension fund:
https://news.sky.com/story/turkish-military-pension-fund-plots-900m-british-steel-revival-11783143

The British-owned Morgan Sports Car company was sold to an Italian company:
https://www.independent.co.uk/life-style/motoring/morgan-motor-company-sold-italian-firm-bought-a8810156.html

Boots was owned by the Swiss who sold it to the Americans:
https://www.independent.co.uk/life-style/motoring/morgan-motor-company-sold-italian-firm-bought-a8810156.html

Sainsbury’s and British land sell British superstores to USA:
https://www.independent.co.uk/life-style/motoring/morgan-motor-company-sold-italian-firm-bought-a8810156.html

Big developer CEOs offloading large blocks of their shares …

“Barratt Developments’ boss follows Berkeley founder’s lead and sells more than a third of his shares for £3.3m.

Barratt Developments’ boss has sold more than a third of his shares for £3.3 million.

David Thomas sold 500,000 shares for 660p each. He still has 823,000 Barratt shares worth £5.3 million.

The move came just weeks after Berkeley founder Tony Pidgley cut his stake in his company by a fifth – cashing in £37.2 million of shares.

The sales raise concerns that housing bosses believe the market has peaked.

And Taylor Wimpey warned rising costs and ‘flat’ house prices were putting pressure on its profits.

It reported first half sales of £1.7 billion, almost unchanged from the previous year, and said profits fell from £301 million to £299.8 million. The firm has proposed a 2019 dividend of 18.34p per share.”

https://www.dailymail.co.uk/money/markets/article-7306879/Barratt-Developments-boss-sells-shares-3-3m.html

The new “magic money tree” appears to have no roots

“… Remember the “magic money tree”? The Conservative party appears to have found it, if the rash of spending promises of new Prime Minister Boris Johnson are anything to go by.

Johnson appears to be doing two things with his promises of billions for railways, tax cuts and “left behind” towns, write the Guardian’s Larry Elliott and Richard Partington: revving up the economy to gain support for his plans with a fallback that more spending could cushion the fallout of a no-deal departure.

Although framed by Johnson as spending headroom at his disposal, economists say the additional firepower is something of an illusion. Thomas Pugh, of the consultancy Capital Economics, said:

This isn’t money sitting in a savings account waiting to be spent. It’s more like borrowing from an overdraft where the limit is set at 2% of annual income. So spending it would result in a higher deficit and more borrowing. …”

https://www.theguardian.com/business/live/2019/jul/29/sterling-new-two-year-low-no-deal-brexit-fears-pound-euro-us-dollar-currencies-business-live?CMP=Share_iOSApp_Other

Government agrees plan with EDF for cost overruns on nuclear plants – we lose, French and Chinese win

It’s OK – our Local Enterprise Partnership (for whom it is their flagship project) will just pump more of our Devon and Somerset funds into it. After all, after many if them were chosen for their nuclear business connect, they at least will be amongst the few who prosper.

“Energy consumers and taxpayers could have to pay for cost overruns at new nuclear plants after the government backed a funding model proposed by EDF.

The business department said last night it believed the “regulated asset base” model that the French energy giant wants for its proposed Sizewell plant in Suffolk could reduce consumer bills compared with the subsidy contract used to back the £20 billion Hinkley Point plant EDF is building in Somerset.

A consultation document published last night confirms that consumers would, however, be asked to start paying for the plants on energy bills while they were still under construction and to share in the risks of cost overruns.

In the case of an extreme overrun, the government — effectively the taxpayer — could either have to step in and pay the extra cost or scrap the project and pay compensation to investors.

Nuclear power provides about a fifth of the UK’s electricity needs but all bar one existing plant is due to close by 2030. Hinkley Point is the only new project under construction and over the past year developers have abandoned plans for new plants in Cumbria, Anglesey and Gloucestershire amid difficulties securing financing.

Under the regulated asset base model, the developer would receive a regulated price to give it a return on its investment expenditure, including during the construction period, and this would be levied on energy bills.

By contrast, EDF and its Chinese partners CGN are paying upfront to build Hinkley in return for a guarantee that consumers will pay them a fixed price for electricity when it eventually starts generating. The contract, well above current market prices, was widely criticised as poor value for money.

The government said the subsidy contract had been “appropriate” for Hinkley because at the time it was awarded, the reactor technology “was not operational anywhere in the world” and similar projects had suffered from significant delays and cost overruns.

The government said that construction at Hinkley, due to start operating in 2025, was on schedule and the same design of reactor had started up in China. It said that financial investors remained unwilling to put money in “during the construction phase”.

Source:Times (pay wall)

Employment, wages and growth – good news – not so sure

“Following the pattern of recent months, the labour market statistics exhibit a shift towards less secure forms of employment. While the overall employment level continued to rise in the three months to May of this year, the composition of this increase is a source of some concern. The number of full-time employees fell by some 77000, and the number of part-time employees also fell slightly. There was a modest increase in the number of full-time self-employed workers, but the main source of employment growth has been part-time self-employment.

This grew by a massive 104,000 over the quarter. While many jobs of this kind offer workers the flexibility that they might want, this may come at a cost in terms of insecurity. As parts of the traditional engine room struggle in the current economic climate, workers may increasingly be turning to the gig economy.”

https://www.theguardian.com/business/live/2019/jul/16/markets-uk-unemployment-wages-ryanair-boeing-737-max-mark-carney-business-live?CMP=Share_iOSApp_Other