Odd and contradictory signals are coming through about EDF’s future, from France, from Sizewell and from putting current UK nuclear news items together, as we will do every few weeks.
So first of all, a SAGE associate reports hearing from someone living in the Sizewell community that some EDF insiders think the project is stalled – and that it would be much cheaper and easier and quicker to put an under-sea cable across from France to Sizewell to sell excess French electricity in Britain.
It may be more than just a casual rumour: London journalists covering Brexit and energy price hikes – see below – are also picking up policy chat about new under-sea cables (interconnectors) for life after Brexit.
In France, something odd has been happening to the current Government’s national plan to reduce French nuclear electricity (all EDF) from 70% plus to 50% of national capacity. The very old Fessenheim plant with several reactors on the Rhine river and German border was the first due to close. But now, EDF seem to have bullied their government into agreeing that if the new EPR at Flamanville is not finished on time (2019), Fessenheim can stay open.
Then, there will soon be a new French President and then government, so the old nuclear reduction programme is likely to be revisited, and Emmanuel Macron is believed to be less automatically pro EDF’s UK plans than the outgoing President Hollande.
What is also interesting is that France already has too much nuclear electricity and will want to export it. It already sends some to Germamy, of course. So why not also build new cables and sell it to the UK, especially if UK electricity is under price pressures from the public and politicians?
France’s other big old nuclear site, with many reactors, at Gravelines, on the northern coast near Dunkerque ,would be able to do that, and maybe Fessenheim would then need to be kept open to feed northern France.
Flamanville, the new unfinished and troubled EPR project is down in Normandy. Maybe it won’t be finished on time in any case... And, just a reminder, there is spare grid capacity at Sizewell after the closure of Sizewell A, although the wind farms at sea will apparently use some of it until they establish their own cabling.
Since interconnectors can be laid under the sea in about three years, and don’t cost £billions, maybe it’s not just idle talk.
But opponents of Sizewell C should not relax: the obvious shift of mood against the project evident at Stage 2 consultation and EDF funding problems at Hinkley are surely material factors in EDF’s thinking.
Now Hinkley is going to cost £2.7 billion more...
Hinkley itself is being re-jiggged too, as EDF have announced “setting aside £2.7 billon extra” for it. This coincides with a big publicity splurge about contractors working away already, to use EDF boss Vincent de Rivas’ phrase, and actually “pouring concrete”. And a Hinkley administration centre being opened with 700 jobs promised. And both of these before the final business decision has been made.
It’s an odd story, because De Rivas told Parliament and presumably Mrs May that this would happen after the FID (Final Investment Decision) some time in 2019.
The original cost was never very clear, but started to get public attention at about £14bn, then went to £16bn, then Europe said it was really about £24.5bn, and now EDF say it will be £18bn plus the new extra £2.7bn, making almost £21bn. Not a great basis for investor confidence, even if its nuclear partner in China contributes an extra £900m.
The FID is now apparently expected earlier, under pressure from the French government according to the Guardian (23.4.17), and could be September this year. That’s two years early, for whatever reason, but at the same time EDF have said the project may be delayed and only completed in 2026, a year late.
They now say it will take 9 years, 7 months to build. That has to be taken with some caution: the Finnish EPR and the Flamanville EPR are about twice that time already and not finished, and the EPRs in China have apparently got problems too. Whatever these problems are, the Chinese company wants to build its own reactors, not the EPR, in the UK at Bradwell.
What about energy prices? Will they be capped and why does EDF need two electricity price rises?
UK energy prices are becoming one of those public issues that won’t go away. EDF are at the heart of it, the only company of the “big six” to have announced two prices rises for standard tariff customers in just four months. The Daily Mail, normally utterly Tory rightist campaigners, was outraged. Mrs May, they thundered on page 1, was going to introduce a price cap against “rip-off” energy prices. These were on March 1st, 1.2%, then only weeks later, 7.2% overall for gas and electricity but reading closely what we find is even more interesting: their electricity price rises are 8.4% for March 2017 and then another 9% in June.
That means their overwhelmingly nuclear elecricity generation busines is in dire trouble. We make the total hike 17.5%!
This is desperate stuff: it is bang up to date, while the Paris EDF financial results and the UK aspect of them were already showing big profit falls last year. For 2016, French nuclear electricity production fell as 18 plants went offline for safety checks, while energy prices generally fell and EDF started to face French price competition for the first time.
In the UK, operating profit was down almost 30%, to £470m before adjustments, on 2015’s already much lower level. But note: this was 2016. The big price hikes are this year. They suggest a different story.
Note also that the Financial Times in February revealed that EDF benefited from “the positive effect” of their accounting depreciation period for their nuclear plants being extended to 50 years. Who agreed that?
We now await the Tory Party manifesto to see if the Daily Mail’s outrage is followed through.