Green Building Forum - What could Â£16b buy us

What could Â£16b buy us

SteamyTea — Mon, 21 Oct 2013 19:05:16 +0100

Noticed since last week that a couple more billion has been added to the price of Hinkley C.
Assuming that in ten years time it comes in on budget, what could we have done with that kind of investment in the meantime?
I think that Â£16b for two 1,650MW reactors is about Â£5/W. Assuming that it runs for 35 years at 99% load factor, it should generate 100,166,220 MW at Â£92.5/MW or Â£92.7b revenue.

What could Â£16b buy us

CWatters — Mon, 21 Oct 2013 19:07:49 +0100

How much UK tax would be paid on that revenue?

What could Â£16b buy us

SteamyTea — Mon, 21 Oct 2013 19:23:08 +0100

Probably on about 20 to 30% of the revenue. But I don't really know, just taking a stab at what the profitability will be.

Another way to look at this is could we save the same amount of energy for less money.

What could Â£16b buy us

jms452 — Mon, 21 Oct 2013 20:10:19 +0100

Posted By: SteamyTeacould we save the same amount of energy for less money

Probably,

but we aren't aiming to move 7% of the UK's electricity to low carbon. We aiming to (mostly) decarbonise the whole energy sector.

As part of a solution, baseload electricity is extremely useful. Even if we forget about the concept of traditional baseload the only renewble cheap enough to compete in terms of cost per MWh is onshore wind which is of limited scalability and has backup infrastructure costs.

Decarbonising the energy sector IMHO is a pretty mammoth task that will take a energy conservation, demand side management, nuclear and renewables - I don't think it is either or!

What could Â£16b buy us

borpin — Mon, 21 Oct 2013 20:16:05 +0100

Posted By: SteamyTeaI think that Â£16b for two 1,650MW reactors is about Â£5/W. Assuming that it runs for 35 years at 99% load factor, it should generate 100,166,220 MW at Â£92.5/MW or Â£92.7b revenue.

Ah but add in running cost and decommissioning.

What could Â£16b buy us

SteamyTea — Mon, 21 Oct 2013 20:24:04 +0100

Load shifting could sort out 7% of our existing generation capacity (currently maxing at about 60GW). This is a problem for a combination of nuclear and wind as they don't play together very well.

My feeling for decarbonising is CCS and more gas while we sort out offshore wind and some tidal stream. I am sure we could do that in ten years.
This Â£16b is going to suck the life out of renewables investment in the UK. Not as if we are very good at installing it with out planning system.
I am a fan of both nuclear and renewables, but think this is a very high price to pay for it.

Borpin
I think decommissioning is included in the price, though how a large pile of Euros buries the waste is still a mystery to me.

What could Â£16b buy us

borpin — Mon, 21 Oct 2013 21:59:38 +0100

Posted By: SteamyTeaBorpin
I think decommissioning is included in the price, though how a large pile of Euros buries the waste is still a mystery to me.

In the Â£16Bn? Strike price does look high then. Nice ROI and no doubt if it costs more to decommission the tax payer will foot the bill.

It is HS2 that makes my blood boil.....

What could Â£16b buy us

SteamyTea — Mon, 21 Oct 2013 22:03:02 +0100

I like the idea of HS2, just want it to stop in Penzance.

What could Â£16b buy us

renewablejohn — Mon, 21 Oct 2013 23:40:46 +0100

Could have built the seven barrage and generate the same amount with a bit of change left over with the added advantage of stopping the floods on the Somerset levels and all the towns down the Seven valley. Only downside would be the loss of the seven bore.

What could Â£16b buy us

mike7 — Tue, 22 Oct 2013 01:31:10 +0100

Posted By: SteamyTea
I think that Â£16b for two 1,650MW reactors is about Â£5/W. Assuming that it runs for 35 years at 99% load factor, it should generate 100,166,220 MW at Â£92.5/MW or Â£92.7b revenue.

There's a zero dropped there somewhere ST. I make it Â£927b. Lawks.

What could Â£16b buy us

Triassic — Tue, 22 Oct 2013 07:44:10 +0100

So the British Government is to pay the French Government to build this thing? Surly it would have been cheaper for the UK Government to build it? Or am I missing something?

What could Â£16b buy us

SteamyTea — Tue, 22 Oct 2013 08:17:08 +0100

The British public are paying a French company, that is part owned by the French government.
I think the British government is underwriting part of the loan. Probably the bit that the Chinese won't touch.
Personally I dont have a problem with this sort of set up, but it does seem complicated and expensive.

Posted By: mike7I make it Â£927b. Lawks.

Quite possibly, had too many numbers for me to work out in the dark

What could Â£16b buy us

tony — Tue, 22 Oct 2013 08:22:31 +0100

I cannot understand why we are not investing in tidal turbines, not the barrage, not wave power but underwater turbines in tidal races.

16b spent on them would generate predictably and cleanly a nice lot of green electricity without the problems

What could Â£16b buy us

SteamyTea — Tue, 22 Oct 2013 09:04:08 +0100

Tony
From what I have read about them it is cost, though that will come down, and reliability, as yet an unknown.
There is a new scheme being built at the moment. So it may well happen, just not quickly. There is also the problem of grid connection, something that redeveloping Hinkley does not have to worry about.
And that is before all the EI stuff, which is again a large unknown at the moment.

Â£16b would buy about 2.5m 4 kWp PV systems that would yield about 344,615,384 MWh over 35 years or about a third of what the two Hinkleys will do. That would cost about Â£51b at Â£149/MWh FIT rate (though the FIT and RHI will drop, probably to Â£92.5/MWh).
Thing with PV is that we can install it right now, so come 2023 when Hinkley fires up (assuming it does) we have produced 10,000,000 MWh.

Think we should be doing both, and some 'after dark' gas with CCS.

What could Â£16b buy us

atomicbisf — Tue, 22 Oct 2013 10:24:01 +0100

I'm not sure what to think. On the one hand it's a good thing that we're getting a significant source of low-carbon electricity, but on the other I worry we're committing ourselves for too long to a technology that may well be regarded as too expensive or obsolete well before its life has expired. They are talking of 60 years and even in 30 years I expect the price of renewable power to have come down significantly.

I also think it's rather silly privatising the electricity supply only to have to effectively turn to the French and Chinese governments to build a new power station and offering them a guaranteed price for the electricity. I think it shows that a project on such a scale is only viable by some sort of parastatal and that it would probably have been better and cheaper to have done it ourselves (though that ship has no doubt sailed).

What could Â£16b buy us

mike7 — Tue, 22 Oct 2013 10:36:12 +0100

Posted By: SteamyTea

Posted By: mike7I make it Â£927b. Lawks.
Quite possibly, had too many numbers for me to work out in the dark" alt="" src="https:///forum114/extensions/Vanillacons/smilies/standard/shamed.gif" >

Nope, as you were. My mistake, blast it. I was looking forward to a 10% finders reward for the 'missing' Â£834bn.

What could Â£16b buy us

fostertom — Tue, 22 Oct 2013 11:24:16 +0100

Any guaranteed minimum price is going to be overtaken pretty soon by continuation of present skyrocketing all-fuel prices. So
a) what useful guarantee does it offer the investors? why did they want it so much? and
b) why should we worry, about that amongst all the other aspects?

What could Â£16b buy us

Ed Davies — Tue, 22 Oct 2013 11:35:52 +0100

Why do you think the price of coal is likely to skyrocket?

What could Â£16b buy us

SteamyTea — Tue, 22 Oct 2013 12:23:53 +0100

The low price of coal stops alternatives becoming too expensive, it is the 'back stop' price of energy.
Think I read somewhere that the price has not hardly changed since the early 70's at about Â£20/tonne (0.3p/kWh).

What could Â£16b buy us

fostertom — Tue, 22 Oct 2013 12:45:16 +0100

It's not stopping gas, oil, electricity, wood fuel etc going up, since 2003, after long (100yrs in case of oil) stasis.

What could Â£16b buy us

SteamyTea — Tue, 22 Oct 2013 13:05:33 +0100

If you took coal out of the energy mix then you would see a much larger rise in the alternatives. There is a reason why it accounts for almost half of our electricity production.

I suggested somewhere on here that we should base our energy tax system on the most expensive form of generation, which at the time was PV. Then use a tax to bring the price of all the others up to match it.

What could Â£16b buy us

Ed Davies — Tue, 22 Oct 2013 13:46:03 +0100

As US fracked gas takes a larger proportion of their market and other countries (particularly in Europe and particularly particularly Germany) reduce coal use isn't the price likely to drop rather than rise? Hopefully more will be left in the ground as a result but probably not in proportion (i.e., at least some more will be used elsewhere than would have been if the prices had stayed higher).

Isn't PV still one of the most expensive forms - at least for capital? About Â£10/W (allowing for its 10% capacity factor) vs Â£5/W for this new nuclear plant, a bit less for wind and a lot less for fossil plants.

Picking the most expensive form then taxing to match it seems weird and arbitrary. Why would you do that? Why not compare to a Stirling engine burning Â£100 notes? OTOH, the relative prices of non-fossil-intensive forms of generation (nuclear, PV, wind) does give some indication of minimum carbon taxes to make useful changes.

What could Â£16b buy us

SteamyTea — Tue, 22 Oct 2013 16:07:05 +0100

Posted By: Ed Daviesthen taxing to match it seems weird and arbitrary

Most taxation systems are both.
But that way you don't have to offer incentives or subsidies, you just penalise the cheaper options.
You could do it on CO2e emissions, land usage (smaller footprint, higher tax, would make wood burning attractive), an import tax, or any other mad system one cares to dream up.
But giving out handouts (were EDF not offered Â£10b) and price fixing has to be one of the worse systems to encourage an industry to invest. Almost as mad as the system of offsetting NI payments for energy reduction (what happened to that idea).

What could Â£16b buy us

jimofwales — Tue, 22 Oct 2013 16:35:52 +0100

There's a zero dropped there somewhere ST. I make it Â£927b. Lawks.

Wait...is that right? The reactors will generate Â£927bn in 35years?! Double the capital investment each year?

Cant' be right...

What could Â£16b buy us

Gotanewlife — Tue, 22 Oct 2013 18:35:17 +0100

I am hugely uncomfortable with nuclear power (only because of very long term waste issues) BUT I can't object because I can't think of an alternative.

Not been mentioned yet that for UK to stump up the cash instead of France/China would cost a lot more in borrowing costs - so not an option.....

What could Â£16b buy us

atomicbisf — Tue, 22 Oct 2013 20:12:47 +0100

Posted By: GotanewlifeI am hugely uncomfortable with nuclear power (only because of very long term waste issues) BUT I can't object because I can't think of an alternative.

Not been mentioned yet that for UK to stump up the cash instead of France/China would cost a lot more in borrowing costs - so not an option.....

What do you mean? Surely the French or Chinese can't borrow much more cheaply than we can? Unless the French and Chinese can borrow much more cheaply or build it for much less, I can't see what the advantage is apart from avoiding having to spend the money now only to pay it in the long run plus whatever profit the French/Chinese consortium will make. While I can see the attraction for the government of the day (think PFI hospitals etc), in the end we pay more.

I'm not terribly concerned about the safety aspects, and I live in the same county.

What could Â£16b buy us

fostertom — Tue, 22 Oct 2013 21:34:00 +0100

Easy to agree that the safety aspects 'now' are impeccable in a hugely safety-conscious industry. It's not 'now' that's the concern so much as the next 2-3000yrs of storing accelerating quantities of genetically lethal stuff, with no present solution, faint hopes of a new technology that might gobble it all up before western society runs out of EROEI, and absolutely no guarantee against just one mad tyrant/warlord arising during that period. It's suicidally neurotic to even contemplate, let alone promote with all possible power.

What could Â£16b buy us

SteamyTea — Tue, 22 Oct 2013 21:39:52 +0100

Posted By: jimofwalesCant' be right...

I think I dropped a zero when typing the 100,166,220 MW, it should be 1,001,662,200 MW (is that an EW)

but the Â£92.7b revenue is right

2 times 1,650 MW generators running 99% of the time is 3267 MW

35 years in hours is 35 times 8760 hour or 306600 hours

3267 MW times 306600 hours is 1001662200 MWh

at Â£92.5/MWh it is Â£9.265 x 10^10 or Â£92.65b

Even a round error at this kind of level is a huge amount of cash.

What could Â£16b buy us

Gotanewlife — Tue, 22 Oct 2013 22:42:30 +0100

Posted By: atomicbisfI'm not terribly concerned about the safety aspects, and I live in the same county.

You missed my point - I said "very long term waste issues" that doesn't mean in my lifetime!!!!! But Tom made the point again. I have to say the day-to-day safety issues and terrorist angle don't concern me and to consider it:

Posted By: fostertomsuicidally neurotic to even contemplate

is.....well, just Tom!

As for borrowing, even the quickest search brought this up:
http://en.wikipedia.org/wiki/List_of_countries_by_public_debt
Certainly China has scope to borrow! But (and I can't believe I actually need to mention this) this Government's core ethos and main policy plank is to bring the UK's borrowing under control; it is not a question about how much it costs to borrow but about living within ones means (see Wonga thread!) - anyway, it was on that basis I thought it obvious that the UK investing Â£16b was 'not an option'.

What could Â£16b buy us

fostertom — Wed, 23 Oct 2013 11:31:00 +0100

Posted By: Gotanewlifeobvious that the UK investing Â£16b was 'not an option'

Except in sexy new railways.

Which we could already have had for ages - under Edward Watkin, visionary boss of the Great Central (the Marylebone line north), the last (turn of century) mainline built, his continental-loading-gauge, mile-radius, easy-gradient, no-level-crossings, super-fast line was intended to run right thro to Paris, with specific intention of connecting N England to Europe by private-enterprise Channel Tunnel - but WW1 put paid to that.

Great Central mainly closed by (and pre-) Beeching. Scheme revived in late 80s ('Lille to Liverpool'), turned down by late-Thatcher and again by Blair http://en.wikipedia.org/wiki/Central_Railway_%28UK%29 .