“Spending watchdog condemns ‘risky and expensive’ Hinkley Point”

Owl says: abd still our Local Enterprise Partnership sleepwalks into disaster with OUR money.

“Generations of British consumers have been locked into a “risky and expensive” project by the UK’s subsidy deal for a new nuclear power station at Hinkley Point in Somerset, according to a damning report by the spending watchdog.

The National Audit Office said the contract sealed by ministers last September with EDF to construct the country’s first new atomic reactors in two decades would provide “uncertain strategic and economic benefits”.

Further, Brexit and Theresa May’s decision to quit an EU nuclear treaty could make the situation even worse, by triggering taxpayer compensation for EDF or a more generous deal for the French state-controlled company.

The watchdog condemned the past two governments for failing to look at alternative ways of financing the power station, such as taking a stake in the construction.

Observers labelled the report “deeply worrying”, a “strong reprimand” and a vindication of Hinkley Point C’s critics, who had argued it was too costly and advocated alternatives such as wind and solar power.

Under the terms of the 35-year contract, EDF is guaranteed a price of £92.50 per megawatt hour it generates, twice the wholesale price.

The subsidy is paid through energy bills, which the government estimates will translate to a £10 to £15 chunk of the average household bill by 2030.

At the heart of the spending watchdog’s criticism is the coalition government’s failure to look at any alternative financing model, such as taking an upfront stake in the £18bn project.

Instead, the Lib Dems and Tories decided all the construction risk for the plant must lay with EDF and its partner, Chinese state-owned CGN, to keep the project off the government’s books.

Taking a stake would have posed its own risks because of delays to projects with the same reactor design in Finland and France, the NAO admitted. “But our analysis suggests alternative approaches could have reduced the total project cost,” it added.

If the government had taken a 50% equity stake in the construction it could have almost halved the guarantee power price to as low as £48.50 per megawatt hour, according to the NAO.

The auditors were critical of ministers’ decision to negotiate bilaterally with EDF, rather than waiting for other new-build nuclear consortia to compete – an approach that the NAO noted had brought prices down on similar subsidy deals for windfarms.

The government’s case for the contract also weakened after the commercial terms of the deal were agreed by the then prime minister, David Cameron, in 2013, the watchdog said.

Delays to Hinkley and falling wholesale prices, caused by a two-year oil price slump, meant the total costs to consumers for the 35-year deal ballooned from £6bn in 2013 to £30bn now.

That number may rise even higher after new figures on power price expectations are released by the Department for Business, Energy and Industrial Strategy (BEIS) next month.

Brexit could make matters worse still, the spending watchdog warned. In January, the government said it would quit a nuclear cooperation treaty as part of the process of leaving the EU.

That withdrawal from Euratom, the NAO said, “might be interpreted as a change of law” resulting in an adjustment of the £92.50 price promised to EDF, or even trigger a one-off payment for EDF through a compensation clause in the contract.

While the NAO concluded “it will not be known for decades whether Hinkley Point C will be value for money”, the usually conservative watchdog was strongly critical of the government for not assessing alternative finance models.

However, it said the report should not be taken as a recommendation that the government takes a stake in future nuclear projects – but the idea should be explored. Such an approach has been discussed by the Japanese and UK governments for a Japanese-backed plant in Wales.

Unions, industry experts and green groups said the report showed lessons must be learned for any future nuclear subsidy deals.

Commentators also raised questions over whether Hinkley would look cheap compared with alternatives such as wind and solar, which the government had argued would cost more.

Mike Clancy, general secretary of the Prospect union, which represents nuclear workers, said: “This is a deeply worrying report that highlights the lack of accountability and leadership in British nuclear policy.”

Dr Robert Gross of Imperial College called the report a “strong reprimand” of the past two governments.

A “slavish devotion” to free markets that ruled out taking a stake and failure to wait for other nuclear projects to bring competition were to blame, he said. “Renewables will become cheap, and this was not anticipated at all. It now looks likely that by the time it is built Hinkley will seem expensive compared to new solar and wind projects.”

Nina Schrank, energy campaigner at Greenpeace UK, called the report a damning indictment of the government’s agreement. “This year’s school leavers will still be paying for Hinkley when they approach their pension age, so it is concerning that the National Audit Office is suggesting it may not be worth their money,” she said.

Jim Skea, president of the Energy Institute, which represents energy professionals, said the report held “clear messages on the steps needed to protect consumers and taxpayers in the future, including possibly radical changes to nuclear policy”.

An EDF spokesman said: “Today’s report shows that Hinkley Point C remains good value for consumers compared with alternative choices. Consumers won’t pay a penny until the power station is operating and it is EDF Energy and CGN who will take the risk and responsibility of delivering it.”

A BEIS spokesman said: “Hinkley Point C will be the first new nuclear plant in a generation. This was an important strategic decision to ensure that nuclear is part of a diverse energy mix.

“Consumers won’t pay a penny until Hinkley is built; it will provide clean, reliable electricity powering homes and creating more than 26,000 jobs and apprenticeships in the process.”

https://www.theguardian.com/uk-news/2017/jun/23/spending-watchdog-condemns-risky-expensive-hinkley-point-c-nuclear

“Sizewell B and 27 other EDF nuclear plants ‘at risk of catastrophic failure”

“A new report finds that 28 nuclear reactors, 18 of them EDF plants in France and one at Sizewell in the UK, are at risk of failure ‘including core meltdown’ due to flaws in safety-critical components in reactor vessels and steam generators, writes Oliver Tickell. The news comes as EDF credit is downgraded due to a growing cash flow crisis and its decision to press on with Hinkley C.

A new review of the safety of France’s nuclear power stations has found that at least 18 of EDF’s units are are “operating at risk of major accident due to carbon anomalies.”

The review was carried out at the request of Greenpeace France following the discovery of serious metallurgical flaws by French regulators in a reactor vessel at Flamanville, where an EPR plant is under construction.

The problem is that parts of the vessel and its cap contain high levels of carbon, making the metal brittle and potentially subject to catastrophic failure. These key components were provided by French nuclear engineering firm Areva, and forged at its Le Creusot.

“The nature of the flaw in the steel, an excess of carbon, reduces steel toughness and renders the components vulnerable to fast fracture and catastrophic failure putting the NPP at risk of a major radioactive release to the environment”, says nuclear safety expert John Large, whose consultancy Large Associates (LA) carried out the Review.

His report examines how the defects in the Flamanville EPR reactor pressure vessel came about during the manufacturing process, and escaped detection for years after forging. It then goes on to investigate what other safety-critical nuclear components might be suffering from the same defects.

Steam generators at 28 EDF nuclear sites at risk

After several months of investigation LA found that critical components of a further 28 nuclear plants were forged by Le Creusot using the same process. These are found in the steam generators – large, pod-like boilers – that have been installed at operational EDF nuclear power stations across France.

The conclusion is based on documents provided by IRSN (the independent French Institut de Radioprotection et de Sûreté Nucléaire) that reject assurances given by both EDF and Areva that there is no safety risk from steam generators containing the excess carbon flaw.

In August 2016, IRSN warned the French nuclear safety regulator Autorité de Sûreté Nucléaire (ASN) that:

EdF’s submission was incomplete;

there is a risk of abrupt rupture which could lead to a reactor core fuel melt; and

immediate “compensatory” measures need to be put in place to safeguard the operational NPPs involved.

… EDF stated yesterday that it will carry out further tests on 12 nuclear reactors during their planned outages in the coming months – and that extended periods of outage are to be expected. “There are outages that could take longer than planned”, an EDF spokesman told Reuters.

“In 2015, we discovered the phenomenon of carbon segregation in the Flammanville EPR reactor. We decided to verify other equipments in the French nuclear park to make sure that other components are not impacted by the phenomenon.”

In anticipation of the nuclear closures, year-ahead electricity prices rose in the French wholesale power market, forcing power rises across Europe up to a one-year high.

Meanwhile Moody’s has downgraded EDF credit ratings across a spectrum of credit instruments. EDF’s long-term issuer and senior unsecured ratings fell from A2 to A3 while perpetual junior subordinated debt ratings fell to Baa3 from Baa2. Moody’s also downgraded the group’s short-term ratings to Prime-2 from Prime-1.

The Review also shows that the reactor pressure vessel of the Flamanville EPR, which is already installed, does not have a Certificate of Conformity issued by ASN. This means that it does not comply with the European Directive on Pressure Equipment, nor does it meet the mandatory requirement of the ASN, which since 2008, stipulates that any new nuclear reactor coolant circuit component has to have a Certificate of Conformity before its production commences.

“Without a Certificate of Conformity the reactor pressure vessel and steam generators currently installed in Flamanville 3 will almost certainly have to be scrapped”, said Roger Spautz, responsible for nuclear campaign at Greenpeace France.

The review, he added, “reveals evidence that at the Creusot Forge plant, Areva did not have the technical qualifications required to meet exacting nuclear safety standards. The plant was not under effective control and therefore had not mastered the necessary procedures for maintaining the exacting standards for quality control in the manufacture of safety-critical nuclear components.”

Areva has now acknowledged that ineffective quality controls at le Creusot Forge were mainly responsible not only for the flaws in the Flamanvile 3 EPR, but across other operational nuclear power plans – and that the technical failures date back to 1965.

Moreover, ASN has indicated that in the nuclear components supply chain three examples of Counterfeit, Fraudulent and Substandard Items (CFSI) have occurred in the year ending 2015.

The recent ASN publication (24th September 2016) of a list of the NPPs affected by the AREVA anomalies and irregularities demonstrates that the phenomenon not only has reached alarming proportions but is continuing to grow under scrutiny.

The number of components affected by irregularities and installed in NPPs in operation increased by 50 in April 2016 from 33 to 83 by 24th September this year. Irregularities affecting the Flamanville EPR increased from two to 20 over the same period.

… As for For Hinkley Point C, it now appears inevitable that the Flamanville reactor will not be completeted by its target date of the end of 2020, indeed it may very well never be completed at all. Under the terms of agreement for the plant’s construction accepted by the European Commission, this would render the UK government unable to extend promised credit guarantees to HPC’s financial backers.

“Now that ASN has deprioritized efforts on the under-construction Flamanville 3 NPP because of its pressing urgency to evaluate the risk situation for the operating NPPs”, says Large, “there is a greater likelihood that Flamanville 3 will not reach the deadline for operation and validation of its technology by the UK Credit Guarantee cut-off date of December 2020.”

Also at risk are the two EPRs that Areva and EDF are currently constructing at Taishan in China. These are now at the most advanced stage of any EPR projects in the world, however there are increasing fears that they contain faulty components.

The vessels and domes at Taishan were also supplied by Areva, and manufactured by the same process as that utilised by Le Creusot. It is suspected that Chinese nuclear regulators may have decided to overlook this problem and hope for the best. However if they discover that the steam generators, which along with the reactor vessels have already been installed, are also at risk of catastrophic failure, that might prove a risk too far – even for China.

The danger for EDF and Areva is that the massive commercial liabilities they may be accruing for faulty reactors supplied to third parties, together with the tens of billions of euros of capital write-downs for projects they have to abandon, and the loss of generation revenues due to plant outages, could easily exceed their entire market capitalisation.

In other words: for EDF, Areva, their shareholders and the entire French nuclear industry, the end really could be nigh.

http://www.theecologist.org/News/news_analysis/2988175/sizewell_b_and_27_other_edf_nuclear_plants_at_risk_of_catastrophic_failure.html

Nuclear power warning for Brexit talks

Britain’s power supply could be in jeopardy if it loses access to nuclear fuels and expertise because of Brexit, the government is being warned. Critics say the Tories have no coherent plan for what comes after the Euratom treaty, which governs safety standards, cooperation, research and trade in atomic energy across the EU.

Cross-party MPs are warning that unless proper arrangements are made, Britain could be reduced to a “rule-taker”, forced to comply with European rules and standards without having any say in them. And the UK could end up running out of nuclear fuel for reactors that are relied upon heavily for electricity. “Decisive action must take place now,” says Justin Bowden from the GMB trade union.

https://www.theguardian.com/world/2017/may/02/tuesday-briefing-britain-unplugged-brexit-warning-over-nuclear-power

Strike threat at Hinkley C – bonus said to be not enough for skilled workers

“Workers on EDF’s 18 billion pound Hinkley Point C nuclear project in southwest England could go on strike over bonus payments, two labour unions said on Thursday.

The GMB and Unite trade unions will hold a vote among 700 workers employed by the Bouygues-Laing O’Rourke (BYLOR) construction consortium appointed by EDF to build parts of Britain’s first new nuclear plant in decades.

The ballot is scheduled for May 2-5, the unions said.

“The bonus rate offered by BYLOR is insufficient to attract the quality of workers needed to ensure that the civil works phase of the 18 billion pound project is completed on time,” the unions said in a joint statement.

EDF Energy, the French utility’s British subsidiary, said that discussions with its contractor and trade union partners were ongoing.

“We are committed to a continuing dialogue on this issue,” said an EDF spokesman, also speaking on behalf of Bouygues and Laing O’Rourke.” …

Source: Reuters

Toshiba’s nuclear mistakes – a warning for the UK

“The roots of Toshiba’s admission this week that it has serious doubts over its “ability to continue as a going concern” can be found near two small US towns.

It is the four reactors being built for nuclear power stations outside Waynesboro, in Georgia, and Jenkinsville, South Carolina, by the company’s US subsidiary Westinghouse that have left the Japanese corporation facing an annual loss of £7.37bn.

Construction work on the units has run hugely over budget and over schedule, casting a shadow over two of the biggest new nuclear power station projects in the US for years.

Events came to a head last month when Westinghouse was forced to file for bankruptcy protection to limit Toshiba’s losses.

Experts said the delays and cost problems were due to America’s lack of recent experience in building atomic power plants.

“I don’t think it is necessarily because of an inherent issue of US skills but rather the lack of practice,” said Richard Nephew, a professor at the Centre on Global Energy Policy, Columbia University. “There simply have not been as many new reactor builds in the US and this has reduced the overall pool of skilled labor, no question.”

The absence of a mass production supply chain, due to the small number of the Westinghouse-designed reactors being built, played a part too, he added. Regulatory issues had also delayed construction. …

Richard Morningstar, chairman of the Global Energy Centre at the international affairs thinktank Atlantic Council, said: “What is happening to Westinghouse and Toshiba only emphasises the need to double down on research on new, safe, nuclear technologies, such as small modular reactors. If we do not do so in the US, leadership will be ceded to other countries.” …

One such aspiring atomic leader is the UK, where the government wants to build a new generation of nuclear power stations to help satisfy the country’s power needs for decades to come.

But there are obvious parallels between the two countries on the issues of recent experience and supply chains. The UK has not completed a new nuclear power station since Sizewell B on the Suffolk coast started generating power in 1995.

EDF, the French state-owned company which has started pouring concrete at Hinkley Point in Somerset, where it plans to have two reactors operational by 2025, maintains it has had plenty of recent practice.

The EPR reactor design for Hinkley is the same as that for the reactors it is building in Finland, and at Flamanville, in France, though both of those are running late and over budget.

The other new nuclear projects proposed around the UK, all by foreign companies, look less certain and all are still years from construction starting in earnest.

Toshiba said this week it would consider selling its shares in the consortium behind another plant planned at Moorside, in Cumbria, which would utilise three of the same AP1000 Westinghouse reactors being built for the two crisis-hit US plants.

The South Korean power company Kepco last month expressed an interest in buying into the project, and the business secretary , Greg Clark, went to South Korea last week for talks on collaboration on nuclear power. …

Justin Bowden, GMB national secretary, said: “The big moral of the story is what on earth we are doing as a country, leaving our fundamental energy requirements to foreign companies or foreign governments?”

While the government has argued that it has plans in place to keep the lights on if new nuclear projects do not materialise, others said the deepening crisis at Toshiba this week showed the need for ministers to consider a new energy policy.

“It’s time to come up with a new plan A,” said Paul Dorfman, of the Energy Institute, at University College London, who believes the Moorside project is dead. “It’s time for a viable strategy that talks about grid upgrades, solar, energy efficiency, and energy management.”

A report published on Thursday highlighted another alternative: a U-turn on the Conservative party’s manifesto commitment to block new onshore windfarms. Analysis for the trade body Scottish Renewables suggested wind turbines on land had become so cheap they could be built for little or no subsidy, compared to the lucrative contract awarded to EDF for Hinkley.

But the prospect of a rethink by the government on wind power looks about as likely as new nuclear power stations being built on time.”

https://www.theguardian.com/business/2017/apr/14/toshiba-us-nuclear-problems-uk-cautionary-tale

“Laptop with plans for UK’s new £18bn nuclear plant stolen from contractor’s car in security blunder”

“A LAPTOP with plans for the UK’s flagship new nuclear plant was stolen from a dozy contractor’s car in a huge security blunder.

He left the computer, packed with details about the £18billion Hinkley Point C reactor, on show in his motor on Wednesday night and thieves helped themselves.

The worker only realised it was missing the next morning and alerted the Civil Nuclear Constabulary, the armed force that guards nuclear sites. Police launched an investigation but last night the £350 Acer laptop and a £500 Samsung tablet nicked with it were still missing.

Officials at the plant, mainly funded by French energy giants EDF, insist there is no evidence either device holds “nuclear sensitive information”.

But only last Sunday, Energy Minister Jesse Norman warned nuclear chiefs to “remain resilient” amid fears ISIS was targeting their power stations. …”

https://www.thesun.co.uk/news/3291386/laptop-with-plans-for-uks-new-18bn-nuclear-plant-stolen-from-contractors-car-in-security-blunder/

“French government urges EDF to close aging nuclear plant as decision looms”

These are the people (with the Chinese) that we are trusting with Hinkley C!

French Energy Minister Segolene Royal warned EDF’s board on Wednesday against trying to prevent the closure of France’s oldest nuclear plant, as a long-running conflict between the state-controlled utility and the government comes to a head.

EDF has scheduled a board meeting on Thursday to decide the fate of the 1,800 megawatt Fessenheim plant near the German border. Its closure was an election promise of outgoing President Francois Hollande in 2012, but the company has so far managed to put off a final decision.

Unions oppose the closure, saying it would cause job losses and France’s hardline CGT trade union urged its members to picket EDF’s headquarters during Thursday’s meeting to keep pressure on the board members.

“The board is going to have a debate and normally EDF’s chairman should give me a request (afterwards) to close Fessenheim as planned,” Royal said on CNEWS.

Environmental groups have long suspected EDF of playing for time, seeking to prevent the closure from becoming irreversible before the end of Hollande’s presidency next month.

EDF’s management has argued that safety issues would not be a reason to close the plant since the nuclear watchdog deemed it safe after the utility invested hundreds of millions of euros to reinforce security following the Fukushima disaster in Japan.

Fessenheim’s two 900-megawatt reactors each bring EDF about 200 million euros ($213 million) in earnings before interest, taxes, depreciation and amortization (EBITDA) per year.

The CGT union called on workers’ representatives on the EDF board to oppose the plant’s closure, saying it would be an economic and industrial waste.

“The Fessenheim plant is safe, and it is recognized as such by the Nuclear Safety Authority,” CGT said in a statement, adding that the plant contributes to French energy security.

France, a major electricity exporter in Europe, depends on its 58 nuclear reactors for more than 75 percent of its electricity supply.

“I’m warning the board members who are tempted to listen to inexact information and could harm the company’s interests,” Royal said.

EDF and the government have reached a 490 million euro compensation agreement covering costs associated with the closure.

The company also received some guarantees that could allow it to shut down the reactor by end-2018, when it starts production at its new generation EPR reactor under construction in Flamanville in northern France.”