tag:blogger.com,1999:blog-1141932539860553199.post1383166267499104110..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: "Does nuclear need a subsidy?"Mark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-1141932539860553199.post-87786383336443019972012-10-31T07:58:56.441+00:002012-10-31T07:58:56.441+00:00AC, the £14 billion quoted was for two 1,600 MW re...AC, the £14 billion quoted was for two 1,600 MW reactors.<br /><br />Ta for the link, as the article says, <i>"At a ballpark of £5bn each, that would make Hitachi very competitive with EDF, the French nuclear giant that is planning to build reactors at Hinkley Point in Somerset."</i> Doesn't say how many MW though.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-65408141042920829752012-10-30T23:43:05.446+00:002012-10-30T23:43:05.446+00:00By the way, Hitachi reckon on £20 billion for four...By the way, Hitachi reckon on <a href="http://www.telegraph.co.uk/finance/newsbysector/energy/9644399/Hitachi-unveils-20bn-plan-to-build-nuclear-reactors-in-the-UK.html" rel="nofollow">£20 billion for four reactors</a>, so £14 billion per reactor definitely looks steep.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-44045488957719244582012-10-30T23:28:24.267+00:002012-10-30T23:28:24.267+00:00"The Department for Energy forecasts that ele..."The Department for Energy forecasts that electricity prices will fall over the long term."<br /><br />I am just killing myself laughing there.<br /><br />Why will they fall? Er...er...er...<br /><br />They are more likely to rise in my opinion, which of course would make the case for nuclear (and even the dreaded Severn Barrage which at £26 billion and 17 Terawatt-hours a year at £70 per megawatt-hour comes out at 5% IRR) even stronger.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-16556003128080115772012-10-29T15:09:35.723+00:002012-10-29T15:09:35.723+00:00BE, no they don't. Let's assume worst case...BE, no they don't. Let's assume worst case, they are as much as construction costs, well that's the last five years of income spent, so extend life to 55 years, hey presto.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-65895358802604925782012-10-29T14:19:48.329+00:002012-10-29T14:19:48.329+00:00I like the way you casually mention closure costs....I like the way you casually mention closure costs. Do these not dwarf the construction costs?<br /><br />BEOld BEhttps://www.blogger.com/profile/06974090439936326476noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-2746871893568006992012-10-29T13:00:17.962+00:002012-10-29T13:00:17.962+00:00SG, yes of course, diesel generators are cheap to ...SG, yes of course, diesel generators are cheap to buy and expensive to run; nuclear is very expensive to buy and very cheap to run. That's the trade off.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-39950032503042003992012-10-29T12:54:54.839+00:002012-10-29T12:54:54.839+00:00Where i use to work we had two 5 mw diesel gen set...Where i use to work we had two 5 mw diesel gen sets, each run by an standard diesel engine (used in naval frigates,)am sure they cost less than 500 mil eachSoutherngenthttps://www.blogger.com/profile/04581568409710832391noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-5896420043411554752012-10-29T12:03:13.643+00:002012-10-29T12:03:13.643+00:00JB, Excel tells me that the IRR on £14 bn now, £1....JB, Excel tells me that the IRR on £14 bn now, £1.76 bn a year for 50 years is 13%. <br /><br />£70 per MWh seems quite low, I don't think it's the end of the world if they make it £80 or £90, at this stage, who cares any more? And £90/MWh would give us an IRR of 16.<br /><br />And yes I know that using IRR's for projects with large closure costs can be a bit dodgy.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-81193107340151041382012-10-29T11:53:02.689+00:002012-10-29T11:53:02.689+00:00BAD STATS KLAXON. When someone uses 'total cas...BAD STATS KLAXON. When someone uses 'total cash rate of return', rather than NPV, for a long project, this is either a demonstration that they don't understand how to do sums, or that they know the case would look pissweak if they used NPV. "Very large returns on a GBP14bn capital outlay" is just silly.<br /><br />Infrastructure investment funds typically target a 10% nominal rate of return, which - based on Lodge's cash calculations - would require an upfront capital cost of no more than GBP10.8 billion at the GBP70 per MW price.<br /><br />Your word on the street seems improbable. The new 1.6GW one Areva are building at Flamanville is coming in at at least GBP5bn, and that's on an existing site with the planning inquiry and so on run under French 'piss off, we're building it' rules. GBP10bn would seem like a good starting point under UK rules, with GBP15bn as a plausible overrun.<br /><br />So we're not a million miles away from these being privately viable, obviously EdF are trying to maximise gouging levels as much as they can, and obviously the government will probably fuck up the negotiations. <br /><br />But given the likelihood of cost and time overrun and the questions around disposal, I can't see any private investor stumping up unless the strike price is at least a hundred quid.john bhttps://www.blogger.com/profile/13784096180652522939noreply@blogger.com