Tag Archives: Exelon

Centralized Nuclear Bad Investment?

A writer for Forbes spells out the question of nuclear investment:
how can something that expensive, over-budget, late, and phenomenally
risky be a good investment, especially when cheaper and faster energy
sources are readily available?

Peter Kelly-Detwiler wrote for Forbes today,

New Centralized Nuclear Plants: Still an Investment Worth Making?



Just a few years ago, the US nuclear renaissance seemed at hand. It
probably shouldn’t have been. Cost overruns from Finland to France
to the US were already becoming manifest, government guarantees were
in doubt, and shale gas drillers were beginning to punch holes into
the ground with abandon.

Then came Fukushima. The latter proved a somewhat astonishing
reminder of forgotten lessons about nuclear power risks, unique to
that technology: A failure of one power plant in an isolated


location can create a contagion in countries far away, and even
where somewhat different variants of that technology are in use.
Just as Three Mile Island put the kaibosh on nuclear power in the US
for decades, Fukushima appears to have done the same for Japan and
Germany, at a minimum. It certainly did not help public opinion, and
at a minimum, the effect of Fukushima will likely be to increase
permitting and associated regulatory costs.

He goes into detail: they take too long (while gas and solar got cheaper),
they’re extremely expensive to build and run, and they’re all-or-nothing
investments.

I was going to compile this list of recent nuclear financial failures,
but he saves us all the trouble:

Continue reading →

Change the Atomic Energy Act? How about change the Georgia Electric Territorial Act?

In reaction to

the NRC denying a nuclear permit for Calvert Cliffs,


some nuclear backers suggest

changing the
Atomic Energy Act of 1954 to permit majority foreign ownership
of nuclear reactors.
What will they suggest next?
Asking Iran to invest in U.S. nukes?

Steve Skutnik wrote for http://theenergycollective.com 5 September 2012,

A cost-free way to open up nuclear investment,

If this seems entirely backward in a world of global production and
investment, that’s because it is. The current regulation is an


artifact of the Atomic Energy Act of 1954, which first authorized
private ownership of nuclear facilities. (Prior to this—per
the Atomic Energy Act of 1946, all nuclear technology was considered
a state secret, during the short time in which the U.S. enjoyed a
monopoly on the technology.)

Is there any real compelling reason for restrictions on foreign
ownership and investment in nuclear facilities to exist at a time
when the U.S. holding a monopoly on the technology has long since
passed? Issues of safety here of course are irrelevant—the
facilities would be licensed and regulated by the NRC, just as any
other nuclear facility is now. About the only salient objection is
the political one—i.e., the implications of a foreign entity
maintaining controlling ownership in key infrastructure. (Although
it’s hard to see anyone getting particularly upset about the
reverse—U.S. entities owning a controlling stake in
infrastructure in other nations.)

Yeah, sure, strict regulation
will deal with that, just like it prevents fracking from setting
drinking water on fire, or BP from poisoning the Gulf.
The new NRC head is

maybe well-meaning,
but it’s the same NRC

that gave Vogtle 1 a clean bill just before it had to shut down
and the same NRC that’s ignoring

cancer in Shell Bluff.

Oh, by the way, the article gets to the main point eventually:

Continue reading →

NRC rejects nuke permit for EDF in Maryland

French nuclear operator Électricité de France (EDF)



was denied a license last week for the proposed Calvert Cliffs
nuclear reactor in Maryland, because the
Atomic Energy Act of 1954 prohibits majority foreign ownership
of nuclear plants.
EDF now has 60 days to find a U.S. partner, or give up the project.
Who could the possible suitors be?
Hint: think southeast.

The handwriting was on the wall two years ago when
Constellation Energy pulled out of the project.
Jim Polson and Alan Katz wrote for Bloomberg 10 October 2010,

Constellation Drops Nuclear Plant, Denting EDF’s U.S. Plans,

Constellation Energy Group Inc. pulled out of negotiations on a $7.5


billion loan guarantee to build a nuclear reactor in Maryland with
Electricite de France SA, potentially damaging the French utility’s
U.S. expansion plans and the companies’ partnership.

The cost of the U.S. government loan guarantee that the companies’
joint venture, UniStar Nuclear Energy, would need to build the
Calvert Cliffs 3 reactor is too high and creates too much risk for
Constellation, the Baltimore-based utility said in a statement
yesterday. The statement said the next step is up to EDF. Enlarge
image U.S. Deputy Energy Secretary Daniel Poneman

In a letter Oct. 8 to Daniel Poneman, deputy secretary of the U.S.
Department of Energy, Constellation said it received a government
estimate that the venture would have to pay about $880 million to
the U.S. Treasury for the loan guarantee, “dramatically out of
line with both our own independent assessments and of what the
figure should reasonably be.”

Constellation’s decision may make it more likely that the U.S.
utility will exercise a put option forcing EDF to buy as much as $2
billion of Constellation’s non-nuclear power plants, said Ingo
Becker, head of utilities sector research at Kepler Capital Markets.

“EDF very clearly said if they exercise the put, this thing is
over,” Becker said. “Constellation may have just turned
around the calendar and pulled out of the new build before
exercising the put, anticipating EDF’s reaction.”

In a letter Oct. 8 to Daniel Poneman, deputy secretary of the U.S.
Department of Energy, Constellation said it received a government
estimate that the venture would have to pay about $880 million to
the U.S. Treasury for the loan guarantee, “dramatically out of
line with both our own independent assessments and of what the
figure should reasonably be.”

Meanwhile, Southern Company

is still trying to reduce what it has to pay for its
$8.3 billion federal loan guarantee.

Back in Maryland, the news got worse for the nuke last year.
EDF

asked for the state’s help,
but didn’t get the answer it wanted.
Scott Dance wrote for Baltimore Business Journal 16 December 2011,

EDF: Constellation-Exelon settlement hurts Maryland nuclear industry,

Continue reading →

Profits per Market Cap in the Forbes 2000: solar and wind still win

We saw that two out of three of the most profitable electric utilities in the world emphasize solar and wind energy: ENEL of Italy and Iberdrola of Spain, both of which operate in multiple countries, including Iberdrola claiming second most wind power in the U.S. Well, maybe those companies are small, so their profits are a fluke. Nope. We get similar results for profits divided by market cap:

ENEL of Italy is still number 1, with no nuclear and a lot of solar and wind energy. Iberdrola is #4 in profits/market instead of #3 in profits alone. However, Electricité de France (EDF) is #7 instead of #2, and Exelon is #9 instead of #4. Number 2 is Energias de Portugal (EDP), which is heavily into wind power including owning Horizon Wind Energy LLC:

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Electric Utility Profits in the Forbes Global 2000 from 2006 through 2012

Which are the most and least consistently profitable electric utilities in the world? Hint: the biggest losers all lost on nukes. But the biggest winners may surprise you.

Following up on Southern Company CEO Thomas A. Fanning’s brag that “We are a great, big company from an energy production standpoint,” I looked in the Forbes Global 2000 to see which are the biggest electricities in the world. Indeed, Southern Company (SO) is the biggest in the U.S. and number 6 in the world for 2012. But what about the rest, and what about previous years? Here’s a graph of profits for the top 40 electric utilities from 2006 through 2012. SO is the blue line muddling along in the middle:

Profits

Profits
Graph by John S. Quarterman from

What’s that dark red line dropping way below the rest? Tokyo Electric Power (TEPCO), owner of the Fukushima nuclear plants. And the red line starting at the top and ending up near the bottom? E.ON, the company that owns most of Germany’s nuclear plants, as Germany shifts away from nuclear energy, after Cheronobyl and now Fukushima. The blue line that ends up as low as E.ON? Korea Electric Power (KEP), also an owner of nuclear plants. All the big losers are nuke owners.

What about the winners? The light green line ending up second by profits is Electricité de France (EDF), also an owner of nuclear plants, but one which has not yet had a major accident.

But what’s that purple line that starts near the top and ends up at the top?

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