Any other business

France can’t build its own new nuclear power stations, let alone ours

Plus: Some good economic news; a film-worthy banking drama; and the case for using your connections

6 February 2016

9:00 AM

6 February 2016

9:00 AM

Amid all the turmoil in global energy markets, we should not lose sight of the UK power programme that we’re praying will keep our lights on a decade hence: it is, as you know, a hobbyhorse of mine. So how’s it going down at Hinkley Point in Somerset? My man with big binoculars in the Bridgwater Bay nature reserve tells me he’s seeing plenty of lorry movements on the nuclear site, but signals from EDF of France — which has a two-thirds interest in this £18 billion project, alongside Chinese investors — are very worrying.

Having already spent £2 billion, the French state utility has deferred until at least the middle of this month a final commitment that was expected last week. Under pressure from unions and minority shareholders, and battered by falling wholesale electricity prices as well as endless delays and problems on its own nuclear new-build at Flamanville near Cherbourg, EDF is evidently begging for more support from its own government before committing such massive resources to solve a problem for ours.

EDF boss Vincent de Rivaz once promised we would be cooking our Christmas turkeys on new nuclear power by 2017; that was before he realised the utter spinelessness of UK energy policy under all recent governments. Analysts still expect EDF to go ahead, but the plant that should provide up to 7 per cent of future UK electricity needs can’t possibly come on stream before 2025. And the travails of Hinkley are reported to have ‘spooked’ Hitachi of Japan, which is in negotiations for another nuclear station at Wylfa Newydd in Anglesey.

Meanwhile, the Institute of Mechanical Engineers has issued a report that reads like an expanded version of my previous column items on this topic. Given decommissioning of all coal-fired stations and most existing nuclear reactors, it argues, the UK does not have the time or resources to build sufficient new capacity to plug what could be ‘a 40–55 per cent electricity supply gap’ by 2025. Gas offers the easiest solution, but we’d need to build ‘about 30 new combined cycle gas turbine plants in less than ten years’ having built ‘just four in the last ten years’. This failure of planning will leave us reliant on imported electricity from Europe and Scandinavia — meaning higher costs and weaker energy security, while demand rises with a growing population and greater use of electricity for transport and heating.
I don’t like to say it, but I told you so.

Not all bad

Staring out at another damp, dark-grey Yorkshire day, I’m struggling to recall a gloomier start to a new year. But how’s the UK economy really doing, beyond the distractions of falling shares and Brexit doubts? It isn’t all bad, that’s for sure. Growth slowed to 0.5 per cent in the final quarter of 2015, making 2.2 per cent for the full year according to the ONS; but the CBI says ‘the overall domestic outlook still looks fairly secure…Low inflation, strong employment growth and rises in real pay also put households in a good position.’ And a key manufacturing indicator, the Markit/CIPS purchasing managers’ index, rose against expectations from 52.1 in December to 52.9 in January — reflecting strong domestic orders offsetting wobbly exports, and looking healthier than the US, where the equivalent index fell.

Meanwhile, new UK mortgage lending was significantly higher than a year ago, indicating more people finding the confidence and the deposit to climb on to the housing ladder; but total mortgage debt fell slightly, indicating a healthy rate of repayments and no crazy boom. I’m not ignoring the negatives; I’m just pointing out that, for now at least, we’re stronger than the news and the weather may make us feel.

Femme fatale

I’m fascinated to see that Amanda Staveley — deal-broking femme fatale, ‘former girlfriend of Prince Andrew’ and granddaughter of a Doncaster bookie — is suing Barclays for £700 million (some sources say £1 billion) in connection with the bank’s £5 billion capital-raising from the Gulf in 2008, in which her firm PCP Capital acted for an Abu Dhabi sheikh. The tranche of the deal that involved Qatari investors is still subject to an SFO investigation, but when it’s no longer sub judice, this whole saga will make an even better movie than The Big Short.
I’d cast Nicole Kidman as Amanda and Kevin Spacey as Bob Diamond.

Opening doors

Connections are a currency to be spent wisely — but spent in good time. If you think you’re in the last decade of your working life, I believe the best thing to be done with accumulated connections, before they wither away, is to use them to help young people you know launch their own careers. So I’m sorry to read in the Sunday Telegraph that name-dropping, family ties and ‘taking the managing partner out to lunch’ are all now strictly out of bounds as methods of getting unjobbed graduates through the plate-glass doors of top City firms; indeed, any attempt to activate such connections is now ‘a very big black mark against the candidate’.

Of course we’re all for social mobility and level playing fields, and the circle of youngsters for whom we deploy our networks should be drawn wide. This isn’t about ‘perpetuating privilege’ but about the delicate mesh of personal obligations, of favours owed and favours called, that make the world go round. My generation are burdened with moral debt towards the generation before. How each of our lives actually turned out is a function of our own ability and luck, or lack of them — but almost all of us had a helpful kick-start from family or friends. I know I did, both in banking and in journalism. The only way we can ever repay that is by doing likewise for the next lot, which means occasionally fixing an introduction or an internship. We’re only trying to open those plate-glass doors, after all. Modern mores say that’s a sin, but I’d feel far more guilty if I didn’t keep doing it.

Got something to add? Join the discussion and comment below.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10

Show comments
  • Phillip2

    Many of us power engineers have been saying “we told you so” for several years.

    • AraucaniaPatagonia

      Years? The wastes-of-carbon we call politicians, of all colours, have put off making these decisions for decades. Actually, that gives me an idea: how much electricity could you generate from burning politicians, and would the ones in Westminster generate more than, say, the ones on your local village council?

      Note: This is a joke and in no way do I seriously advocate burning anyone, especially not our highly esteemed, wise and far-sighted dear leaders.

      • Herman_U_Tick

        Not much actually. If you want to burn bodies you need to add calories unless you
        have a handy way to dehydrate them. This is why I don’t accept the ‘wicking’
        theory of Spontaneous Human Combustion.

      • evad666

        No put a treadmill (a very big Gerbil Wheel) in Parliament Square.

      • Mark Pawelek

        You can’t burn politicians, they’re, already, just hot air.

    • flipkipper

      Matey, is this your call to get a whip round going and fund the upgrade of our thoroughly conventional fossil fuel plant infrastructure?

    • Malcolm Stevas

      Not just power engineers: it didn’t take a degree in electrical/civil engineering to see that successive governments preferred to ignore energy provision since it wasn’t very sexy, and it was long-term. Career politicians don’t take much notice of anything beyond the next election. They are shallow and self-centred, and liable to be blown around on the winds of modish claptrap about “saving the planet” or “sustainability”.

  • Polly Radical

    Plutonium smells of marzipan, apparently.

  • John P Hughes

    Martin Vander Weyer writes:
    “My generation are burdened with moral debt towards the generation before. How each of our lives actually turned out is a function of our own ability and luck, or lack of them — but almost all of us had a helpful kick-start from family or friends. I know I did, both in banking and in journalism. The only way we can ever repay that is by doing likewise for the next lot.”
    “If you think you’re in the last decade of your working life, I believe the best thing to be done with accumulated connections, before they wither away, is to use them to help young people you know launch their own careers.”
    Yes – and it couldn’t be better put. So many of us, looking back 30-40 years, benefitted from help from older people whom our parents knew or whom we were lucky enough to meet, who handed down their advice and obtained introductions for us. We should all do it for the next generation.
    If top City firms are going to restrict this, that’s up to them. It should and must continue in other walks of life, from the law through transport and planning to engineering and science.

  • Tom M

    …….this failure of planning will leave us reliant on imported electricity from Europe and Scandinavia……
    I’m interested in that comment. Just how does the author think anyone is going to bring anything up to 50Gw across an interconnecter.

    • evad666

      Can we get 50Gw across a politician or will they keep failing like an overloaded fuse?

    • Mark Pawelek

      The author didn’t mention interconnecters. Yet they are a good thing, they allow each country to lessen its reserve capacity. Imagine it as redundant capacity being shared among several countries.

      • Tom M

        Perhaps he didn’t mention interconnectors but without them how do you intend transporting electricity from mainland Europe to the UK which was what he said we would need to do?
        All countries who generate electricity have spare capacity caused by their own particular load cycles. Interconnectors take advantage of different countries peak loads.
        The largest connecting the UK I think is the French coming across at Dungeness which, when working, can transport a max of about 2Gw when favourable conditions dictate. The others are all fractions of a Gw. Hardly going to keep anybody’s lights on if the coal fired stations are all closed down.

        • MichtyMe

          In addition to the French interconnector there are connections with Ireland Netherlands and Norway with another 2GW. There are also future projects for another 8GW.

          • RobertRetyred

            And when every country wants extra at the same time?

        • Mark Pawelek

          I think you were a bit too critical of Martin Weyer because he never said that we planned to bring in 50GWe over interconnectors. At the same time, I share your concerns over our long-term energy future. Back in 2014 we still had 25GWe of (old) coal plant. If this is all to be shut by 2025 what will replace it? Certainly not renewables nor interconnectors. It’s vaguely possible we may have some new nuclear plant up by then. I think any reactors begun before 2019 have a chance of generating before the close of 2025. All the existing reactors will probably get life extensions too; of 7 to 10 years.

          PS: Reactors take at least 4½ years to build, plus a year of tests before they’re fully on the grid. So really : at least 5½ years. TBH, we need to add a year to that to be “better safe than sorry”. So that’s really, at least 6½ years I bet the Hinkley EPRs will take at least 6 years to build (plus 2 years you’d add anyhow).

  • Mark Pawelek

    “This failure of planning …”

    Hilarious reading that phrase in the Spectator. This magazine, home to market fundamentalists, hates the word “planning”, with its Stalinist associations. Remember: we privatised our electricity utility. Privatised companies closed British nuclear power research and development. They sweated the assets. The City sold the privatised utilities. Now we have foreign owned energy companies. As my father told me: “you make your bed and then you lie in it”. I should’ve told him: “No – ‘the market’ makes my bed.”

    • Tom M

      Until February 2006 Westinghouse was
      owned by government-controlled British Nuclear Fuels and had all the
      skills necessary under UK control for new nuclear investment. Instead,
      it was sold to the Japanese for £3.4bn).
      No need to remind you of who was in Government at that time.

    • George Carty

      Privatization was treason.

  • Mark Pawelek

    On a more serious note. The Hinkley C project is a perfect storm.
    * The AREVA EPR planned there is the most expensive reactor design ever.
    * It’s the only reactor Edf can build because, our regulator: ONR have only passed one design through its Generic Design Assessment.
    * Edf would probably build the EPR anyway because they’re French, and state-owned, as are the EPR builders: AREVA.
    * All this happening just as we’re retiring so many old, coal-fired, stations; partly because they fail EU acid-gas and particulate emission standards.

    Why is the EPR so expensive? The AREVA EPR is an overly complex, expensive design. The origins of this design date back some 25 years or so. It was made to satisfy the impossible demands of German greens because back in the late 1990s the energy ministry was under the control of a German Green Party politician Jürgen Trittin (from 1998-2005). So the special features of the EPR design such as double-walled outer containment, core catcher, multiple redundant pumps, etc. are over-the-top. Over the other side of the Atlantic, Westinghouse came up with their AP1000 which has better, more elegant, and cheaper solutions to nuclear power plant safety. We should’ve built the AP1000 at Hinkley instead.

    • Adam Bromley

      Fascinating post thank you. The regulations on nuclear power seem absurd and bear no relation to the regs on other means of power generation, in terms of cost-benefit etc.

    • atomikrabbit

      “We should’ve built the AP1000 at Hinkley instead.”

      Might as well – NuGeneration will be building three at Moorside soon enough anyway, so standardize your fleet:

      By then there’ll be eight operating worldwide (4 in China, 4 in US) from which to take construction and operating experience. And to take some business away from competitor Areva, Westinghouse’s Danny Roderick may even cut you a deal.

  • Wendle Trendle

    Nuclear hasn’t a future in modern states where the market has a say. It is more and more being confined to authoritarian states where the exorbitant cost is borne by the people over a generation.

    Even with that in mind it is falling behind other sources of energy in places like China.