UK

What a Turkey: Hinkley Point C Costs Hit a New High

BY LINDA PENTZ GUNTER

 FEBRUARY 2, 2024
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 The Great Mosque of Mecca is considered the most expensive building in the world at $115.2 billion. Right behind it comes….a nuclear power plant! The two-reactor 3,260MW Hinkley Point C nuclear site still under construction in the UK will now cost at least £46 billion ($59 billion) according to the latest figures released by its developer, the French energy giant, EDF.

As such, Hinkley Point C has now earned the dubious honor of becoming the second most expensive building in the world. And it’s not even finished. The price could soar still higher.

EDF originally bragged that Britons would be baking their Christmas turkeys powered by Hinkley Point C by 2017. The completion date has now been pushed to “after 2029”.

The nuclear power industry is very good at tripling things. Perhaps not global nuclear installations by 2050 as it bragged would happen during an announcement at the COP28 climate summit last December. But the price tag for a new reactor? Timelines for new reactor construction? Straight A grades all around!

That’s almost what’s happening at Hinkley Point C where the new price is more than double the original estimated cost of £18 billion ($23 billion). Getting to triple the cost still seems eminently achievable given the new completion date.

This not-so-shocking news, given nuclear power’s track record, comes after the recent, overblown announcement by Rishi Sunak’s Conservative government that Britain would launch its “biggest expansion of nuclear power for 70 years to create jobs, reduce bills and strengthen Britain’s energy security.”  The plan will of course achieve none of these things.

Far from reducing electricity bills for British consumers, the Hinkley nuclear project will in fact increase them “far above the market electricity price,” predicted Dr Norbert Allnoch, CEO of the International Economic Forum for Renewable Energies (IWR), based in Münster, Germany.

According to estimates by IWR, the cost of the electricity generated by Hinkley Point C will be “significantly higher than the 15 cents/kWh mark” and will continue to rise. This is because the UK government agreed a “state-guaranteed price for nuclear power being paid to EDF, which is linked to the inflation rate,” says IWR.

All of this came after the recent announcement that UK authorities had granted a Development Consent Order (DCO) to EDF’s identical twin EPR reactor project on the Suffolk Coast at Sizewell, while committing £1.3 billion ($1.6 billion) in funding for the project. The French company has already been tearing up pristine countryside there, destroying habitat and disturbing wildlife at the adjacent Minsmere Nature Reserve.

Meanwhile, France is pushing the UK to pay for the cost-overruns at Hinkley and the expected ballooning bills at Sizewell once work begins. France reportedly blames Britain for prompting the Chinese firm CGN to withdraw its 33.5% share from the Hinkley plant after Britain booted China out of the Sizewell C nuclear project.

Chinese investment in UK nuclear projects has been a hot political potato for some time, and came to be viewed as “an unacceptable national security risk.” A proposed new reactor project at Bradwell in Essex, a joint project between China and France, looks unlikely to go forward, at least in part due to security concerns about Chinese involvement.

Stop Hinkley campaigners warn citizens they’re about to be nuked — and fleeced. (Photo: CND)

These challenges prompted the UK government to seek  alternative sources of funding, inevitably settling on ratepayers using something called a Regulated Asset Base (RAB). RAB effectively funds future nuclear projects by charging ratepayers up front in their electricity bills for the anticipated costs of nuclear plant design, construction, commissioning, and operation.

“Hinkley Point C has been a shambolic money pit,” said a spokesperson from Together Against Sizewell C on X (formerly Twitter). “It’s been hit by delay after delay and the costs are escalating at an alarming rate. Nobody can say with any confidence when it will go live or how much money will have been wasted on it.”

The story of Hinkley C illustrates that the nuclear sector is “out of control economically,” said Paul Gunter, director of the Reactor Oversight Project at Beyond Nuclear. The cost of EDF’s EPR reactor being built in France at Flamanville and still incomplete, has more than quadrupled to close to $15 billion. Another EPR, at Olkiluoto in Finland, went from $3.2 billion to more than $12 billion and launched 12 years late.

On U.S. soil, two AP 1000 reactors at the Vogtle nuclear power plant site in Georgia, will likely come in at a total price tag of at least $35 billion, $20 billion more than originally estimated, with the second of the two reactors still not on line.

This first appeared on Beyond Nuclear International.

Linda Pentz Gunter is the editor and curator of BeyondNuclearInternational.org and the international specialist at Beyond Nuclear. 

Is this the World's Most Expensive and Most Delayed Power Project?

By Leonard Hyman & William Tilles - Jan 31, 2024

Yes, they are still building the Hinckley Point C nuclear power station in the United Kingdom, and yes the latest estimated cost is more than the previously estimated cost and the completion date has receded another two years into the future. 

This nuclear project received its license for construction in 2012, with an estimated cost of £18 billion and completion date in 2025. The last estimate calls for 2029-2031 completion at a cost of £46 billion. To the extent that these estimates can be trusted, the plant would end up costing double the original estimate in real terms. In the same time period, solar and wind costs will decline by at least one half. We are not sure yet whether Hinckley Point will set an all-time record as the most expensive and most delayed power-related project in history, but it certainly will be a contender.

As is the case for so many climate- or security-related projects, the UK government offered significant subsidies to the builder. But in a different way.  Most governments, nowadays, offer start-up subsidies in order to bring production levels up to a point where economies of scale kick in, after which costs drop rapidly and consumers get real benefits.  The cost curves for wind, solar, and energy storage show how well this strategy works. Give the industry a kickstart and watch the action take place. Not so with nuclear, where costs seem to rise with encouragement rather than fall. Opting for nuclear, then, seems more like an ideological rather than a technological or economic choice, especially for British Conservative politicians. “Nuclear has to be part of the package”, they seem to say. Even if the nuclear cost per kW installed is five-eight times higher than non-fossil alternatives. But, fortunately, the UK government is not directly on the hook for the added costs, the Chinese co-investor in the project has declared that it will not contribute more, and it looks as if French utility EDF will bear the increased costs if it does not get a new power contract. But if the UK decides to stick EDF with the bill, what will that decision do to discourage further nuclear construction? Given the perilous nature of that construction (namely the danger of cost inflation), who could take the risk of initiating new projects other than a government agency?

Hinkley Point might cause us to examine the premises underlying nuclear projects. Building a nuke has two purposes: to ensure national security and to reduce carbon emissions. As for reducing carbon emissions, those reductions could take place anywhere in the world and still benefit the planet. Some contractors (Russians or South Koreans?) in some countries apparently can build nuclear plants for less than contractors in Europe or the United States. So why not let them build nukes where it is economic to do so and pay the host countries for the carbon reductions? And maybe, if there still are savings, the paying countries that have natural gas supplies and wish to use that gas for national security reasons could contribute the savings to an international carbon reduction fund. In other words, the substantial nuclear savings made possible by differences in construction costs might create an opportunity for nuclear cost arbitrage. Just a thought. Our point: Hinkley Point C could put the kibosh on new nuclear construction in the West, but it need not discourage nuclear building everywhere.

By Leonard Hyman and William Tilles for Oilprice.com

It’s Not Inflation: Here’s the Proof We’re Getting Ripped Off

BY LINDSAY OWENS  AND ELIZABETH PANCOTTI

 FEBRUARY 2, 2024
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Photograph by Nathaniel St. Clair

Many Americans are still experiencing the sticker shock they first faced two years ago when inflation hit its peak. But if inflation is down now, why are families still feeling the pinch?

The answer lies in corporate profits — and we have the data to prove it.

Our new report for the Groundwork Collaborative finds that corporate profits accounted for more than half — 53 percent — of inflation from April to September 2023. That’s an astronomical percentage. Corporate profits drove just 11 percent of price growth in the four decades prior to the pandemic.

Businesses have been quick to blame rising costs on supply chain shocks from the pandemic and the war in Ukraine. But two years later, our economy has mostly returned to normal. In some cases, companies’ costs to make things and stock shelves have actually decreased.

Let’s demonstrate with one glaring example: diapers.

The hyper-consolidated diaper industry is dominated by just two companies, Procter & Gamble and Kimberly-Clark, which own well-known diaper brands like Pampers, Huggies, and Luvs. The cost of wood pulp, a key ingredient for making diapers absorbent, did spike during the pandemic, increasing by more than 50 percent between 2020 and 2021.

But last year it declined by 25 percent. Did that drop in costs lead Procter & Gamble and Kimberly-Clark to lower their prices? Far from it. Diaper prices have increased to nearly $22 on average.

These corporate giants have no plans to bring prices down anytime soon. In fact, their own executives are openly bragging about how they’re going to “expand margins” on earnings calls. Procter & Gamble predicted $800 million in windfall profits as input costs decline. Kimberly-Clark’s CEO said the company has “a lot of opportunity” to expand margins over time.

It’s not just diapers — while many corporations were quick to pass along rising costs, they’ve been in no hurry to pass along their savings. A recent survey from the Richmond Fed and Duke University revealed that 60 percent of companies plan to hike prices this year by more than they did before the pandemic, even though their costs have moderated.

Corporations across industries, from housing to groceries and used cars, are juicing their profit margins even as the cost of doing business goes down. And they’re not hiding the ball. Since the summer of 2021, Groundwork began listening in on hundreds of corporate earnings calls where we heard CEO after CEO boasting about their ability to raise prices on consumers.

Now we hear something slightly different: CEOs crowing about keeping their prices high while their costs go down.

PepsiCo raised its prices on snacks and beverages by roughly 15 percent twice in the last year while bragging to shareholders that their profit margins will grow as input costs come down. Tyson’s earnings report flaunted how their higher prices have “more than offset” their higher costs. The CFO of Hershey said last quarter that pricing gains more than offset inflation and higher costs.

So what can we do about it?

The Biden administration has taken important steps to rein in corporate profiteering and address the longstanding affordability crisis, from eliminating junk fees to strengthening global supply chains and cracking down on corporate concentration.

With the 2017 Trump tax cuts set to expire, Congress should also take this opportunity to raise taxes on corporations. Taxing profits helps disincentivize price gouging and profiteering because large corporations will have to send a greater share of their windfall to Uncle Sam.

We’ve come a long way in bringing inflation down since its peak in 2022. But stamping out inflation once and for all will require a concerted effort to rein in the corporate profiteering.

Lindsay Owens is the Executive Director of the Groundwork Collaborative.  Elizabeth Pancotti is Strategic Advisor to Groundwork. 

Nuclear War? Climate Collapse? No Worries. WEF Says Disinformation is Humanity’s Most Immediate Threat

BY EVE OTTENBERG

 FEBRUARY 2, 2024
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The assorted billionaire geniuses and official intellectual luminaries who gathered in Davos Switzerland January 15-19 proved, for those who doubted, that neither singly nor as a group could these nincompoops find their way out of a paper bag. Weighing the world’s fate in their well-manicured fingers, did they seem concerned about the Ukraine War morphing into nuclear catastrophe, or ditto for a wider Middle East war? They did not. Did they tear their beautifully coiffed hair and rend their designer ensembles over the prospect of the earth heating up like a pancake on a griddle due to uncontrolled climate change? A disaster caused by rich countries gobbling up and belching out burnt fossil fuels? Or did they mouth vague platitudes about extreme weather? Yes, bromides were their plat du jour.

The most immediate threat to humanity, according to this assemblage of well-groomed nitwits (who paid $52,000 apiece to join the World Economic Forum and then $19,000 each for a ticket to the Davos shindig), is misinformation or disinformation – you pick. After all, these bigwigs can take to their pate de foie gras-stocked bunkers if the planet succumbs either to nuclear winter or high temperatures inhospitable to human life. So of course, they regard speech, that is, free speech, as the main threat to their luxurious creature comforts. After all, someone might say something bad about these oligarchs! That surely bodes far worse for our species than radioactivity or a global, climate-change-induced sauna. So the Davos set has grabbed the bull by the horns. Disinformation purveyors beware! As for the rest of the world’s people, well, God help us, as we are led to oblivion by bubbleheads.

I suppose we should take some solace that the Davos jet-set did acknowledge the dangers of extreme weather. As anyone with a functioning brain knows, earth has smashed all calefaction records in recent years, and this has royally interfered with the planet’s thermostat. So we get droughts, floods, intolerable summer heat, balmy weather in January (on the 26^th the mercury topped 80 degrees Fahrenheit in Washington, D.C.), followed the next day by an Arctic freeze, due to cold polar air having lost its compass. These developments kill lotsa people and are very hard to ignore. Hence the WEF designation of extreme weather as the greatest long-term concern – in short, a close second to those supposed twin terrors, misinformation and disinformation. WEF’s Global Risks Report 2024 bemoans “a multipolar or fragmented order to take shape over the next decade.” Things were so much simpler when the Exceptional Empire alone held the world’s reins! But when even Davos intellectual heavyweights recognize that it no longer does, you know imperial decline is speeding along.

“An unstable order characterized by polarizing narratives and insecurity…are causing accelerating risks – including misinformation and disinformation – to propagate,” says the WEF’s managing director. Why this bizarre fixation on speech? Because “the nexus between falsified information and societal unrest will take center stage amid elections…” Translation: angry plebs with pitchforks will defenestrate oligarchy-approved rulers. Heavens! Billionaires may be hindered when it comes to selecting their puppets in Western political capitals. Populists – left and right – may seize power! Class privilege could become dicey. Class war, actually waged from below, could erupt.

One danger, not mentioned on the WEF list of Top 10 Risks, is fascism. That’s probably because the Davos nabobs don’t really fear fascism. They know quite well that when fascists grab power, though they handle the proles quite roughly, they treat plutocrats with kid gloves. Many fantastically wealthy movers and shakers have no real beef with fascism – after all, from it they receive the criminalization of strikes, tax cuts, more docile leftwingers, who are too busy to protest as they scrounge to eat grass in concentration camps and, of course, the trains run on time! In sum, a massive defeat for the hoi poloi. From an oligarch’s viewpoint, what’s not to like?

And yet, we all know fake news can be a fascist ploy. Take the lament circulating on Twitter in recent months that millions of male foreigners of military age sneak across the southern U.S. border and are greeted with open arms by namby-pamby liberals, who give them bank cards worth thousands of dollars and free plane tickets to anywhere in the U.S. they choose. My question is this – if each of these supposed potential criminals gets $5000 on a bank card, why do they sleep in tents or welfare hotels? No one answers this, or even addresses it. That’s because the purpose of this fake news is to stir Americans up into a nativist frenzy.

If that’s the type of thing the dim bulbs at Davos were complaining about, why didn’t they say so? Because it’s not – they can live with nativist hysteria, just as easily as they can live with millions of destitute, undocumented immigrants. Neither one ruffles their opulent feathers, because either way their hands remain on the steering wheel. A public in a frenzy over its ethnic purity and millions of desperate, dispossessed arrivals willing to do any degrading, dangerous work for peanuts are not things our rulers fear. After all, the nation was built on such. My guess is they’re more concerned with direct threats to their janissaries, namely the CIA and FBI, posed by their eternal bogeyman, independent media, whom despite their best efforts they never seem to manage to throttle, and by scruffy journalists and activists like Julian Assange, currently, to their likely satisfaction, rotting in jail.

 Also, the Davos honchos do fear some class upheaval on the right, for instance, those very alarming protests that caused toadies of the fantastically affluent to seize Canadian truckers’ bank accounts back in February 2022. That whole episode may appear bizarre to leftists, but it is a harbinger of elite abuses to come. Canadian minister of finance and WEF sachem Chrystia Freeland justified using the Emergencies Act to freeze low and middle-income protestor’s funds, by saying “we faced as a country and as a government an incredibly serious threat.” Now you’re talking! A bunch of unarmed truckers blocking highways had the nerve to challenge the status quo. By all means, freeze their bank accounts, before they write letters to the editor decrying this abuse!

Though the truckers’ “Freedom Convoy” seethed with anti-vax crackpots, they had every right to air their grievances and their government had no right absolutely to flip out and seize their checking accounts. That’s what a fixation on “disinformation” leads to – stealing ordinary people’s money when they’re uppity enough to complain. The Davos imbeciles nodded their heads in approval. You shouldn’t. Left or right, if you’re not rich, you could be next.

Eve Ottenberg is a novelist and journalist. Her latest book is Lizard People. She can be reached at her website.