Nuclear Power

How Hinkley delivers a bad deal for everyone

15 Sep 2016

The approval of Britain’s new nuclear power plant puts politics ahead of sense. Consumers could end up paying 15 bln pounds in today’s money. New ownership tests erode the country’s reputation for openness. Brexit has undermined Britain’s bargaining power.

E.ON coal legacy has potential for further smudges

10 Aug 2016

Despite a 3.8 bln euro writedown on its fossil fuel assets, German utility E.ON may still be overestimating the value of its soon-to-be spun off subsidiary Uniper. The likelihood of further adjustments, and a costly nuclear settlement, suggests it needs more capital.

China overplays its hand in UK nuclear debate

9 Aug 2016

Making the $24 bln Hinkley reactors an acid test of mutual trust is unwise. The Sino-British relationship is already tilted in China's favour, so Beijing has little to retaliate with if the UK scraps the project. Conversely, forcing it to go ahead could prove a pyrrhic victory.

Cheap wind energy can deal final blow to Hinkley

8 Aug 2016

Electricity from offshore wind farms costs a third less than in 2013. It now undercuts power costs at the two new nuclear reactors planned in the UK. With prices falling further and low project risk, the case for pulling the plug on the Hinkley Point plant is building.

Theresa May may have saved EDF from itself

29 Jul 2016

The state-owned French utility’s 12 bln pound investment in nuclear reactors at Hinkley Point could unravel after the UK’s new prime minister initiated a surprise review of the high-risk, high-cost project. Pulling the plug would do UK taxpayers and EDF shareholders a big favour.

Russia’s show of financial power fails to convince

25 May 2016

Moscow is selling its debt to foreigners and lending $25 bln - 2 pct of domestic GDP - to Egypt for a nuclear plant. Such shows of financial strength are all well and good. But the debt sale isn’t quite what it seems, and lending big sums at sub-market rates is risky.

E.ON’s corporate alchemy hinges on nuclear boost

26 Apr 2016

Spinning off fossil fuels and energy trading might unlock around 7.5 bln euros in hidden value at E.ON, if the remaining group can catch up to valuations of peers like National Grid. A favourable deal with Berlin over nuclear decommissioning costs is a key precondition.

Chernobyl is symbol of shaky EU-Ukraine ties

26 Apr 2016

Thirty years after the disaster at the nuclear power station, EU money has helped build a structure to contain further reactor fallout. But Ukraine will have to sort any future issues by itself. Efforts to bring Kiev and Brussels closer suffer from a similar risky dynamic.

RWE raises stakes in Germany’s nuclear tussle

17 Feb 2016

When a utility axes its dividend, it’s a drastic step. RWE’s move, along with a 2.1 bln euro writedown, will hit its local government shareholders hard. RWE and its peers want Berlin to offer a generous deal over nuclear decommissioning costs. This distress signal can only help. 

Beijing backing for UK nuclear comes at high price

22 Oct 2015

China and France’s EDF are nearing an 18 billion pound N-plant deal at Hinkley. Long horizons make the economics hard to judge, but at current prices Britain is on the hook for 1 billion pounds a year in implied subsidies. The price of Chinese support is fiendish complexity.

German nuclear relief masks deeper power shortage

12 Oct 2015

Shares of E.ON and RWE jumped more than 10 pct as regulators approved the sector’s 38 bln euro nuclear provisioning. But overall prospects remain dismal. Rules favouring green energy production dent wholesale prices. Exposure to carbon-rich lignite is an Achilles’ heel. 

Nuclear waste contaminates E.ON breakup plans

10 Sep 2015

The stricken German utility’s attempt to free itself from the burden of dismantling its nuclear power plants has failed. E.ON will only hive off fossil assets and energy trading. Shareholders remain exposed to the risk that long-term cleanup costs may exceed group provisions. 

Iran nuclear deal is huge potential step forward

14 Jul 2015

The hope is that the 100-page agreement will help keep oil cheap, spur rapid growth in the Iranian economy and lead to less fighting in the Middle East. But sanctions can be revived quickly if things don’t go to plan. Mistrust remains endemic. Optimists will have to be patient.

Obama’s nuclear gift to Modi is shrewd investment

26 Jan 2015

The U.S. president has unblocked a stalled nuclear power deal with India, allowing Prime Minister Narendra Modi to build new reactors. While that will boost orders for GE-Hitachi and Westinghouse, bigger gains to the U.S. economy will come from ending India’s energy deficit.

New EDF boss’ big management problem: the state

16 Oct 2014

Former Vivendi chief Jean-Bernard Lévy will head state-owned electricity group EDF. He must engineer a government-ordered decline of nuclear in France’s energy mix, and prepare a partial sale of the state’s stake in the near term. Outside investors can no longer be overlooked.

RWE, E.ON gain little from German energy revamp

8 Apr 2014

Coal and gas power generators might hope to profit from a reform of costly subsidies for solar and wind power. But while the government is trying to cut costs, the target - almost doubling the share of renewables by 2025 - hasn’t changed. RWE and E.ON will continue to suffer.

German push to green power is brave but risky

24 Apr 2013

Europe’s industrial leader wants to wean itself off nuclear power and fossil fuels, so Germany will become the world’s test laboratory for renewable energy. The policy is farsighted, but in urgent need of more German efficiency to keep costs under control.

Japanese economy needs nuclear second chance

5 Apr 2013

Shinzo Abe’s goal of weakening the yen will make electricity even pricier in a country that imported over 80 pct of its energy even before the Fukushima disaster in 2011. The accident damaged confidence, but Japan’s revival could falter without a hefty nuclear energy program.

UK nuclear deal a step forward in challenging slog

30 Oct 2012

Hitachi’s $1.1 billion purchase of a big nuclear power project is a victory for the UK government. The Japanese group is an attractive partner, with a reputation for delivering on time and on budget. But policymakers need to deliver in three big areas for the project to succeed.

Japan holds atomic energy to impossible standard

17 Sep 2012

If Tokyo follows up on its pledge to phase out its reactors, the costs will not be limited to higher electric bills. The replacement fossil fuels are far more dangerous. In demanding perfect safety from nuclear energy - but not from coal - Japan is going with an alarming trend.