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New Nukes Update
Oct. 16th, 2008 09:23 amI feel for those living in the area of Florida where they're going to start charging consumers for the new nukes in advance of the plants actually running. Like people need extra bills to pay things that may not materialize for another ten years, if ever.
Frankly, I'm surprised that the fixed income folks aren't in open revolt. Maybe they found the sweet spot on how much they could extract without that happening.
Florida Grants Early Recovery of Nuclear Costs
Reuters - 14 Oct 08
"Florida regulators on Tuesday approved plans to allow the state's two largest utilities to collect more than $600 million next year in costs for new nuclear plants expected to be online in eight to 10 years."
"An FPL customer using 1,000 kilowatt-hours of electricity each month will pay about $2.13 a month, said FPL, the largest utility in the state with 4.5 million customers."
And the latest new nuke in Europe built by the "experts" at Siemens and Areva is two years behind schedule and a billion over budget. What's funny is that they evidently sold this plant to the Finns on a "turnkey" basis which means they are eating the billion dollar cost overrun, not their client. Evidently they're trying to get out of that too.
Areva to Settle Finnish Project Loss With Client TVO
Bloomberg - 16 Oct 08
"Areva SA, the world's largest reactor maker, is negotiating with Teollisuuden Voima Oyj, or TVO, to share losses at a reactor it is building for the Finnish utility."
"'Areva obviously lacks visibility on the project but really needs to make it happen to prove its new design really works,' said Pierre Boucheny, an analyst at Landsbanki Kepler in Paris. The analyst, who rates Areva 'reduce,' estimates that the cost overruns of about 1 billion euros have already wiped out profit on Areva's next 10 reactors."
It's somewhat ironic that the US nuclear industry started their industry with loss-leader "turn-key" projects that almost broke them but provided the false assurance of cheap power and jump-started the industry. For some strange reason, all US plants since then have been on a cost-plus basis.
The Turnkey Era in Nuclear Power - Land Economics - Vol. 56, No. 2 (May 1980), pp. 188-202
"Between late 1962 and mid-1966, the leading United States reactor manufacturers offered nuclear reactors for sale to public utilities on 'turnkey' terms. These turnkey contracts were contracts under which the reactor manufacturers took on all the responsibilities for design, construction and testing of a reactor, including meeting regulatory guidelines, simply turning the key over to the utility once the reactor became operational. Moreover, turnkey contracts were available under fixed price terms.
Thirteen reactors were built during the turnkey era under such contracts, all by GE or Westinghouse, and the two reactor manufacturers took combined losses on the contracts that ranged upwards of $1 billion. In June, 1966 GE announced termination of its program of offering turnkey contracts, and no reactor since that time has included turnkey terms.
Prior to the turnkey era, the nuclear reactor industry was at a standstill; immediately after the era, there was a boom in reactor sales, all under (cost-plus) contracts."
Frankly, I'm surprised that the fixed income folks aren't in open revolt. Maybe they found the sweet spot on how much they could extract without that happening.
Florida Grants Early Recovery of Nuclear Costs
Reuters - 14 Oct 08
"Florida regulators on Tuesday approved plans to allow the state's two largest utilities to collect more than $600 million next year in costs for new nuclear plants expected to be online in eight to 10 years."
"An FPL customer using 1,000 kilowatt-hours of electricity each month will pay about $2.13 a month, said FPL, the largest utility in the state with 4.5 million customers."
And the latest new nuke in Europe built by the "experts" at Siemens and Areva is two years behind schedule and a billion over budget. What's funny is that they evidently sold this plant to the Finns on a "turnkey" basis which means they are eating the billion dollar cost overrun, not their client. Evidently they're trying to get out of that too.
Areva to Settle Finnish Project Loss With Client TVO
Bloomberg - 16 Oct 08
"Areva SA, the world's largest reactor maker, is negotiating with Teollisuuden Voima Oyj, or TVO, to share losses at a reactor it is building for the Finnish utility."
"'Areva obviously lacks visibility on the project but really needs to make it happen to prove its new design really works,' said Pierre Boucheny, an analyst at Landsbanki Kepler in Paris. The analyst, who rates Areva 'reduce,' estimates that the cost overruns of about 1 billion euros have already wiped out profit on Areva's next 10 reactors."
It's somewhat ironic that the US nuclear industry started their industry with loss-leader "turn-key" projects that almost broke them but provided the false assurance of cheap power and jump-started the industry. For some strange reason, all US plants since then have been on a cost-plus basis.
The Turnkey Era in Nuclear Power - Land Economics - Vol. 56, No. 2 (May 1980), pp. 188-202
"Between late 1962 and mid-1966, the leading United States reactor manufacturers offered nuclear reactors for sale to public utilities on 'turnkey' terms. These turnkey contracts were contracts under which the reactor manufacturers took on all the responsibilities for design, construction and testing of a reactor, including meeting regulatory guidelines, simply turning the key over to the utility once the reactor became operational. Moreover, turnkey contracts were available under fixed price terms.
Thirteen reactors were built during the turnkey era under such contracts, all by GE or Westinghouse, and the two reactor manufacturers took combined losses on the contracts that ranged upwards of $1 billion. In June, 1966 GE announced termination of its program of offering turnkey contracts, and no reactor since that time has included turnkey terms.
Prior to the turnkey era, the nuclear reactor industry was at a standstill; immediately after the era, there was a boom in reactor sales, all under (cost-plus) contracts."
