European Tribune - Community, Politics & Progress.

Oh the irony - UK entrusts its energy future to French State-owned groups

by Jerome a Paris
Mon Jun 9th, 2008 at 07:36:46 AM EST

EDF edges closer to nuclear deal
A £10bn French takeover of British Energy (BE), which owns most of the UK's nuclear sites, could be completed within the next couple of weeks. Electricite de France, which is likely to strike a subsequent supply deal with Centrica, is in advanced talks with BE's advisers. The French power company has begun fundraising in order to formalise its bid.

Areva seeks leading role in UK nuclear
Areva, the French nuclear reactor manufacturer, aims to dominate the next wave of UK nuclear power generation after receiving government assurances that its goal of supplying the technology for all the nation’s new reactors would not breach competition rules.
Anne Lauvergeon, chief executive of the company which has already won pledges of support from energy companies EDF and Eon, told the Financial Times the UK was now “the most exciting place in Europe” for nuclear. Areva had been “very impressed by the decisions taken by the British government over a short period of time, over the last two years, to restart nuclear investment in Great Britain”, she said.

‘Atomic Anne’ sets sights on UK waste
Is “Atomic Anne” the new face of Britain’s nuclear industry? Anne Lauvergeon – her sobriquet reflects her role as chief executive of Areva, the state-owned French nuclear group – not only aims to supply the bulk of the next wave of reactors. She also wants to take charge of the UK’s nuclear waste problem: her group is bidding for the contract to run the Sellafield complex in Cumbria.

After years of dithering, the UK government did an abrupt about-face last year and decided to support nuclear energy. and contrary to earlier stances, this one seems to be followed rapidly by decisions that will actually lead to facts on the ground, ie new nuclear plants. And each of these goes in the same direction: entrust the French with the job. Which I suppose is not such a bad energy policy given the track record of Whitehall over the past 30 years.

But let me repeat it again: EDF and Areva are not just French, they are State-owned. They are the anti-thesis of the 'let the markets take care of it' mindset (which does not mean they are not competititve, as some are finally noticing). They embody government planning, government investment, and the rule of engineers over lawyers. French. State-owned.

Now I happen to think that the UK should focus first on building all the offshore windfarms it can (not that I am a disinterested party there, of course), but this is still a stunning capitulation by the NuLab ideologues.

. Home
. About
. Contact
. New User Guide
. FAQ
. ET Editorial Guidelines
. Search
. Search (Google)

Username:
Password:

. Make a new account
. Reset password

Oh the irony - UK entrusts its energy future to French State-owned groups | 29 comments (29 topical, 0 editorial, 0 hidden)

Yes (4.00 / 5)

We need a word to convey both Schadenfreude and gloating at the same time!

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jun 9th, 2008 at 07:45:55 AM EST

Word (4.00 / 7)

Europe faces bulging energy bills because of oil
Europeans are facing big increases in their energy costs this year and beyond as the effect of soaring oil on wholesale power and gas prices hits customers' bills.
Crude oil prices have doubled in the last year. As a result, wholesale forward and gas power markets have also surged to record highs in the last few weeks and are showing little sign of retracing in the foreseeable future.
(...)
Only the 99 percent of French households that benefit from relatively low state-set electricity prices look like being sheltered from the wave of surging prices, largely because the French government responded to the oil shocks of the 1970s by building Europe's largest fleet on nuclear power plants.
Their electricity bills have been unchanged since August 2007 and look immune to the latest oil crisis.
"In the contract that we have with the state, we are not authorised to raise tariffs above the inflation," a spokesman for state-run power giant EDF said.

Will they remember the other bit of French policies: it was not just building nuclear plants, it was also government-set tariffs for a monopoly provider.

It is the explicit intention of the European commission to kill the regulated tariff, as it suppsoedly prevents competition. The French are going to just loooove competition if all is does as allow EDF to charge them a lot more because that's were market prices will be - and when you look at brokers' analyses of EDF, they are all waiting for the end of the tariff to encourage investors to buy EDF shares, ie they know that the only result will be higher prices for EDF.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jun 9th, 2008 at 07:53:17 AM EST
[ Parent ]

Re: Word (none / 1)

It is the explicit intention of the European commission to kill the regulated tariff, as it suppsoedly prevents competition. The French are going to just loooove competition if all is does as allow EDF to charge them a lot more because that's were market prices will be - and when you look at brokers' analyses of EDF, they are all waiting for the end of the tariff to encourage investors to buy EDF shares, ie they know that the only result will be higher prices for EDF.

France might have to consider a "surgical strike" on Brussels if these deregulation idiots get their way. Far better would be to generalize French regulation and tariffs throughout the EU. (Good luck on that.) At least they have a proven track record of efficiency and safety. Is it that EU officials and/or other member states can't stand the existence of a shining example that so clearly illustrates the bankruptcy of their policies.

At least when the Republican Administration in California, after 16 years of appointees to the Public Utility Commission, managed to push through policies that "deregulated" electricity, public utilities such as the Los Angeles DWP were allowed to retain their large hydro base. When Enron stuck a straw into the big orange out in California and Enron traders were joking back and forth about bankrupting grannie, Los Angeles was barely affected.

I am no longer amazed but remain appalled at the ease with which people are recruited to conspire in their own oppression and plundering.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer at eurotrib.com) on Mon Jun 9th, 2008 at 02:11:10 PM EST
[ Parent ]

Re: Word (none / 1)

I presume the EDF contract with Britain will not include "anticompetitive" stuff like this...

by gk (g k quattro due due sette "at" gmail.com) on Mon Jun 9th, 2008 at 02:22:36 PM EST
[ Parent ]

Re: Word (4.00 / 2)

Oh no.

And EDF is going to make a killing, courtesy of the British consumer, freed at last from the horrendous burden of regulations by the invisible hand of the Market™ Almighty®.

Facts, selfish little bastards. They don't even care about your feelings.

by Francois in Paris on Mon Jun 9th, 2008 at 03:41:33 PM EST
[ Parent ]

And the word is... (none / 1)

Bwahahahahaha!

I absolutely love this!

It's the funniest thing since, since... Well I don't know if I have ever heard of something as funny as this!

French. State-owned. Regulated. Companies. Run by Engineers. Saves. UK. Free Market. Lawyers. Who have campainged against and complained at the former for decades!

In the end, the UK switched from UK state companies not to private UK companies, but to French state companies!

Bwahahahaha!

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Mon Jun 9th, 2008 at 10:28:53 PM EST
[ Parent ]

Re: Oh the irony - UK entrusts its energy future t (4.00 / 5)

I think about 3 years ago someone high up on the Labour foodchain took a look at the next decade's predictions for plant closures and peak electricity supply and spilled their coffee over their lap. Without serious investment, the lights are going to be flickering as a lot of the old plants are retired. It takes a crisis and the fear of electricity-less revolt to inspire them to cut the tape, i expect...

As someone just about to start a PHD post in condensed solar, I share your interest in getting renewables up. the UK can't really use much of what I'll be making but with the wind, tides and waves, it really shouldn't need it. The UK government are fools if they don't greenlight a load of marine-generation projects like the ones entering service in the scottish isles and the proposed tidal ring near Swansea Bay.

by darrkespur on Mon Jun 9th, 2008 at 07:48:34 AM EST

Re: Oh the irony - UK entrusts its energy future t (4.00 / 5)

darrkespur:

The UK government are fools

Yep.

We do teh stuped on a monumental scale. Somewhere I have a Whitehall document from 2004 predicting the next few years of oil prices.

The most pessimistic prediction for 2008 is less than $40/bl. The best case is around $20/bl.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jun 9th, 2008 at 08:07:09 AM EST
[ Parent ]

Re: Oh the irony (4.00 / 2)

I think you misinterpret what is happening. Whilst there are committed supporters of privatisation within the Labour Party, they might not have received such strong policy support if it were not for the accounting trick that private comapnies take liabilities and loans away from the Public Sector Borrowing Requirement. Something which has been a Brownite fetish since the mid 90s.

So the fact that EDF is state owned doesn't matter to Brown, so long as it isn't owned by the British state and thus causing a problem on their balance sheet.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Mon Jun 9th, 2008 at 07:57:07 AM EST

Re: Oh the irony (none / 0)

I guess that Brown would rather be tarred and feathered than abandon his fetish.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer at eurotrib.com) on Mon Jun 9th, 2008 at 02:13:51 PM EST
[ Parent ]

Re: Oh the irony (4.00 / 4)

As often, it needs not be an or. Nuclear does take a while to reach the grid, so they should probably kickstart it and add all the new renewables they can manage AS WELL.

They need a lot now, and they'll need a lot 10 years from now.

Admittedly, while they have plenty of renewable electricity production opportunities, they wouldn't have too many customers should they actually produce more than they need (not too many neighbours lacking the same opportunities...). But should that happen (unlikely for a LOOOONG while), they could always revive some industries by essentially giving away excess energy for people who accept a very inconsistent supply.

"Few can believe that suffering, especially by others, is in vain. - Galbraith"

by Cyrille (cyrillev domain yahoo.fr) on Mon Jun 9th, 2008 at 08:00:12 AM EST

I agree that both (4.00 / 6)

should be pursued, but I know that the push towards nuclear will essen the pressure felt to support wind, and as it will be growing anyway, people will wonder why more should be done on that side - when it could easily be.

But indeed, if we have any intention of moving private transport to the grid (via plug-in hybrids, for instance), a lot more power generation capacity will be needed and a lot more wind.

It's just that with the same kind of impetus, the results on the wind side would pleasantly surprise everybody. Sigh...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jun 9th, 2008 at 08:11:12 AM EST
[ Parent ]

Re: I agree that both (none / 1)

For sure, they could get very good results. Now, if they could find a way to generate electricity from rain, Cornwall would be the new Kuwait ;-)

"Few can believe that suffering, especially by others, is in vain. - Galbraith"

by Cyrille (cyrillev domain yahoo.fr) on Mon Jun 9th, 2008 at 09:21:48 AM EST
[ Parent ]

Re: I agree that both (4.00 / 2)

Well, rain has kinetic energy that is wasted when it hits the ground...

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Mon Jun 9th, 2008 at 09:36:25 AM EST
[ Parent ]

Re: I agree that both (4.00 / 2)

Mig, I have a warp drive for sale. Taker?

Facts, selfish little bastards. They don't even care about your feelings.

by Francois in Paris on Mon Jun 9th, 2008 at 01:34:00 PM EST
[ Parent ]

Re: I agree that both (none / 1)

If you can find an economical way to capture it you'd really be on to something, but I have a feeling the devil is in the details on this one.

Il faut se dépêcher d'agir, on a le monde à reconstruire

by dconrad (dai {point} conrad {arobase} gmail {point} com) on Mon Jun 9th, 2008 at 01:39:43 PM EST
[ Parent ]

Re: I agree that both (none / 1)

I believe it's called a water wheel.

by Colman (colman at eurotrib.com) on Mon Jun 9th, 2008 at 01:41:53 PM EST
[ Parent ]

With a funnel above it a mile across? (none / 0)

Individual water wheels would capture a pretty tiny fraction of the energy in a rainstorm.

Then again, I guess you could say the same thing with respect to individual windmills and the wind, so maybe I'm just underestimating how effective a water wheel could be?

Il faut se dépêcher d'agir, on a le monde à reconstruire

by dconrad (dai {point} conrad {arobase} gmail {point} com) on Mon Jun 9th, 2008 at 02:50:42 PM EST
[ Parent ]

If only there was a way to collect this water (4.00 / 2)

If only there was a way to collect this water at a relatively high altitude, and of harnessing its potential energy as it flows down to relatively lower altitudes, that'd be super awesome. If only ...

A 'centrist' is someone who's neither on the left, nor on the left.

by nicta (nico＠altiva․fr) on Mon Jun 9th, 2008 at 02:51:40 PM EST
[ Parent ]

Re: Oh the irony - UK entrusts its energy future t (none / 1)

After years of dithering, the UK government did an abrupt about-face last year and decided to support nuclear energy.

Before or after Brown took over from Blair?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Mon Jun 9th, 2008 at 08:26:59 AM EST

It's been over the past two years (none / 1)

so it looks like a joint decision to me - and Brown was supervising BERR before, wasn't he?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jun 9th, 2008 at 08:54:13 AM EST
[ Parent ]

Entrust France? (4.00 / 3)

There's hope for those poor buggers after all!

Mais c'est un scandâââle!!

by redstar on Mon Jun 9th, 2008 at 09:29:06 AM EST

Re: Oh the irony - UK entrusts its energy future t (4.00 / 3)

She also wants to take charge of the UK's nuclear waste problem: her group is bidding for the contract to run the Sellafield complex in Cumbria.

Is the waste problem so well managed for the current production that EDF can afford to tackle even more ? Where and in what shape will it all end up ?

by balbuz on Mon Jun 9th, 2008 at 10:25:55 AM EST

Re: Oh the irony - UK entrusts its energy future t (4.00 / 2)

Areva and EDF are seperate entities you know.

Anne Lauvergeo is CEO of Areva, not EDF. It's Areva bidding for the waste treatment.

"Few can believe that suffering, especially by others, is in vain. - Galbraith"

by Cyrille (cyrillev domain yahoo.fr) on Mon Jun 9th, 2008 at 10:27:47 AM EST
[ Parent ]

the typos, the typos ... (4.00 / 2)

separate, Lauvergeon.

"Few can believe that suffering, especially by others, is in vain. - Galbraith"

by Cyrille (cyrillev domain yahoo.fr) on Mon Jun 9th, 2008 at 10:28:30 AM EST
[ Parent ]

Re: Oh the irony - UK entrusts its energy future t (none / 0)

Well, they are pretty much commensal symbionts. They exist for each other.

Facts, selfish little bastards. They don't even care about your feelings.

by Francois in Paris on Mon Jun 9th, 2008 at 01:38:37 PM EST
[ Parent ]

Off topic: Lehman Brothers (none / 0)

Bonjour, Jerome. Totally off topic, but wondering if you've seen this story:

Business bank Lehman Brothers, new victim of the financial crisis
The American business bank Lehman Brothers has announced, Monday June 9, an historic net loss of $2.774 billion (1.76 billion euros) for the fiscal period of March-May 2008. The losses have obliged them to raise $6 billion ($3.8 billion euros) to strengthen their financial position. In the same period last year, the financial institution recorded a gain of $1.273 billion (810 million euros).
Alarmist rumors about the company have been circulating for several weeks. ...

Hope my translation is OK. "Exercise" is "fiscal year", but since the article specifically refers to mars-mai 2008 I said "fiscal period". Do you think Lehman Brothers could be the next Bear Stearns?

Slightly more on topic, I heard a story on NPR over the weekend with T. Boone Pickens talking about setting up the largest wind farm in the world (or so he positioned it) in Texas for $10 billion and investing an additional $2 billion on the transmission lines himself. When a Texas oil man gets behind wind power, I think that says something.

Even more on topic, I'm happy to see any non-fossil-fuel power projects, even if they are nuclear, French, and state-owned. Just as long as they get built. I hope that EDF and Areva will still have some spare bandwidth if we need to hire them after Obama is elected....

Il faut se dépêcher d'agir, on a le monde à reconstruire

by dconrad (dai {point} conrad {arobase} gmail {point} com) on Mon Jun 9th, 2008 at 01:23:49 PM EST

UK rejects French State-owned groups (none / 0)

Events seem to have overtaken this diary

Independent - British Energy auction plunged into doubt as EDF refuses to increase offer

The auction of British Energy has been thrown into disarray after the nuclear power group rejected the only offer it has so far received, while EDF, the jilted suitor, signalled that it would not budge on price.
The board of British Energy told the French power group at the weekend that its bid, thought to have valued the company at around £11bn, was too low. The rejection leaves an auction, for which the Government held high hopes, at an impasse and could mean that the company will remain independent.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Tue Jun 10th, 2008 at 07:09:47 AM EST

Re: UK rejects French State-owned groups (none / 0)

Well, that's just a public posture for negotiation purposes. We'll see how this ends, but BE remaining independent seems doubtful. Ultimately the government can ignore the management and sell its 35% directly.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Jun 10th, 2008 at 07:15:13 AM EST
[ Parent ]

Oh the irony - UK entrusts its energy future to French State-owned groups | 29 comments (29 topical, 0 editorial, 0 hidden)

Go to: [ European Tribune Homepage : Top of page : Top of comments ]