Gossage:Gossip June 2017

Typography
Opinion

And then there were five?

Just as I predicted last month prime minister, Theresa May, is planning to place a price cap on all tariffs operated by the Big Six electricity companies. In the past I have joked, given Npower’s precipitate loss of market share, whether that title shouldn’t be altered to the Big Five-and-a –half.  But I am now beginning to wonder whether that “and-a-half” description may soon be too generous.

Last year Npower made a 137million euro loss, acknowledging “serious process and system related problems in residential customer billings”, one of the many reasons why the company has consistently been down the bottom of the customer –satisfaction league tables. Consequently 2.400 jobs, almost 20% of its workforce, are going.

Despite this, its otherwise profitable German parent company Innogy (spun off from RWE) has conceded that Npower will make a further loss this year. It is citing “a worsening market environment” leading to continuing losses of customers - despite being forced to retain others by offering contracts on “much more favourable conditions.”

Ominously Innogy’s chief financial officer Bernhard Gunther has warned that the Conservative party’s price cap “and the general regulatory tendency that we are seeing… aren’t making the UK more attractive for us as an investor.”

It could not be plainer. Unless Npower pull convincingly out of this downward spiral, the German company’s patience is not infinite. Theresa May would have to reconsider her use of the appellation Big Six. And start describing the electricity market as being run by the Big Five. 

The not-so Secret Seven

Is there a message here for the UK government? The French firm Engie became the seventh international energy utility to give up on UK new nuclear build when it sold its 40% stake in NuGen, the vehicle created to create the proposed Moorside power station.

Over the past decade, this vote of no confidence follows on top of that from Toshiba, E-on ( re Wylfa), RWE/Innogy Npower (Wylfa), Iberdrola (Moorside), SSE (Moorside), and Centrica (Hinkley Point); each  has publicly pulled out of developing any new nuclear reactor in the UK.

This leaves a very limited field of companies for the UK to approach in its hunt for a new partner for the Moorside scheme in Cumbria. South Korea's KEPCO remains the most likely suitor, as it is one of  thefew utilities remaining with global nuclear ambitions. However Reuters is reporting that the giant utility won't be rushed, despite a series of UK ministerial visits and blandishments.

The Moorside scheme had always been expected to depend upon the APR1400 reactor. To that end, the design has now received approval from the Office for Nuclear Regulation and from the Environment Agency.

However it is odds on that – if it does ever finally decide to buck the trend and get involved -  KEPCO will still want to use its own technology . That is despite the fact that its AP1000 reactor would still have to obtain all that regulatory approval, delaying any development by a further four to five years. Could KEPCO yet become the eighth international energy utility to conclude that UK new nuclear build is a game simply not worth the pursuit? 

Wombling Uncle Bulgaria

Donald Trump has company. You will recall that the US President famously dismisses any threat of climate change as a hoax. Apparently dreamed up by the Chinese government in order to provide business opportunities for Chinese firms. All this despite its existence being accepted by every other functioning government on the planet.

But now Trump’s isolation is over.  He has found a fellow denier. And from within the European Union too. Just last month Bulgaria appointed a new environment minister, called Neno Dimov, who seems to be determined to outdo Trump in his scepticism.

 “Global warming is manipulation”, claims the 53 year old Dimov appearing on You Tube in a Bulgarian-language video, describing climate change as fraud. In it, he alleges that any European Union targets for reducing emissions are not for ecological purposes, but intended solely to earn billions for businesses  - although whether exclusively Chinese businesses is unclear.

He questions if global warming is really happening, and even if so whether human activity is truly causing it. Fear owing to rising levels of the world’s oceans is absolutely unfounded. According to Dimov, the greatest evil in the world is “political correctness, the imposition of fear through global warming. Supporters of sustainable development are frightening us with global warming.”

I have a nasty feeling that in consequence we shall perforce be hearing a lot more about the wit and wisdom of this representative of the EU’s least affluent government. You have been warned.

Joys of Brexit (number 94)

Britain is on the hook for large volumes of dangerous radioactive waste — some of it imported from the rest of Europe — under proposals by Brussels to transfer ownership of a range of nuclear materials to the UK after it leaves the EU.

Almost 130 tonnes of plutonium stored at Sellafield in Cumbria is among the nuclear material that would formally shift to UK control, according to draft documents issued by Michel Barnier, the EU’s chief Brexit negotiator.

All “special fissile material”- forms of uranium and plutonium used in nuclear fuels, and Euratom, the pan-European regulator of civilian nuclear activity, technically owns some of the resulting waste.

Mr Barnier’s provisional negotiating position calls for a Brexit agreement to “ensure, where appropriate, the transfer to the United Kingdom” ownership of “all special fissile material” currently controlled by Euratom within the UK. The UK is set to withdraw from Euratom.

Such an agreement would make the UK legally responsible not only for its own nuclear material. But also reprocessed spent fuel imported over several decades from Germany, Sweden and elsewhere for recycling at Sellafield. Now isn’t that a desirable thought?

 

 

Data Centre news from our sister title

@elecreviewmag