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First off, you seem to be making claims about the way EDF is run rather than the core discussion we were having, which was about production cost for nuclear pow

by pyrale 3y ago

First off, you seem to be making claims about the way EDF is run rather than the core discussion we were having, which was about production cost for nuclear power. I'm assuming, since you change topic, that my explanation about cheap legacy nuclear not being related to shady tax funding was clear. That being said, a few notes on your other points: > It's relevant because they are making less than what they spend. It's not necessarily a big issue. A large expense item for 2022 was the work necessary to extend plants' life by 10 years. That is the reason for about 60% of the plants being down last summer. Sure, the timing was unfortunate, but the production loss was offset ahead of time, and the return on that investment should be extremely profitable. > ARENH exists for a decade now, and whether it's the right thing or not is for the sake of this discussion entirely irrelevant My link wasn't about the mechanism itself but about its surprise extension. There is a difference between knowing ahead of time that you need to provision 100tWh for your competitors, and learning overnight - at the same time as any market participant - that you need to provide an extra 20 tWh, on short notice, while market prices are already over the roof, while your own production is already sold. The cost to EDF of this one political decision was about €8bn [1]. EDF wasn't doing great before that, but it had a positive EBITDA, which should tell you that its core business is profitable. > How much will it cost to replace 50+ reactors? It is no big secret that EDF is under-capitalized. That's expected when your main shareholder raids your coffers [2] and uses you to buy and recapitalize its other companies [3]. As I said previously, the issue here is government decisions, not EDF's electricity pricing. > you can even find some larger ones at 50kWh per year That's low, 50kWh per year means the fridge draws 6 watts on average, that's less than a LED. I guess nothing prevents it theoretically, but I suspect that was calculated for a perpetually shut fridge. The numbers I find are around 100-200 kWh per year depending on the rating, more for one with a freezer. Anyhow, that's interesting numbers. I guess I'll have to recheck my appliances (even though, since I heat on electricity, that's not my main draw). [1]: https://www.edf.fr/en/the-edf-group/dedicated-sections/journalists/all-press-releases/legal-claim-concerning-the-allocation-of-additional-electricity-volumes-at-a-regulated-price-for-2022 https://www.edf.fr/en/the-edf-group/dedicated-sections/journ... [2]: https://www.bnains.org/archives/action.php?codeISIN=FR0010242511 https://www.bnains.org/archives/action.php?codeISIN=FR001024... [3]: https://www.reuters.com/article/us-edf-areva-idUSKBN1EG2AS https://www.reuters.com/article/us-edf-areva-idUSKBN1EG2AS

locallost 3y ago
It doesn't make much sense to say the company is making a profit, but it's only losing money because of maintenance and it will not be able to replace its current plants because it's undercapitalized. All those things are a part of running a business. The cost of electricity is not fuel plus operations, it's the funding for a plant, the maintenance, and once that's paid off the depreciation of the asset which will eventually need to be replaced. I don't understand why this is so difficult. Also for the EDF being forced to buy Areva, I mean, you need to pick a side. Either you are a real business and you don't need to do that, or you are a state owned political tool. If it's a real business, will it go to a bank or issue bonds for hundreds of billions it will take to eventually replace the current plants? If not, then that investment in Areva will be very cheap when the time comes for the state to fund the new plants. Macron is talking about new ones for at least four years.
- pyrale 3y ago
  > it's only losing money because of maintenance The "grand carénage" isn't maintenance, it's an investment to extend the lifetime by 10 years. Operations and maintenance are factored in electricity prices and aren't the reason these plants were shut down in 2022. > I don't understand why this is so difficult. [...] I mean, you need to pick a side. It feels like you're misinterpreting my position. My point is that 1) production costs are low and well reflected in consumer prices and 2) the business is viable. It is completely unrelated to whether EDF is a private company or a state-owned company, whether the leadership and shareholders and are making sound decisions or whether the money made from current operations will be reinvested into new production facilities.
  - locallost 3y ago
    Whatever it is, it costs EDF money, and therefore it needs to be a part of the price. Also we were at this point previously so I can only repeat what I'd already said: almost a quarter of the total plants were out last year for unplanned maintenance, meaning they had cracks in the pipes and couldn't even run. This year started in a similar way: more unexpected problems, this will again cost money. I also posted a link to the president of the EDF at the time the plants were built. His quote: "the plants were designed to run for just over 30 years". So where are the replacements. And if they were starting to get built, who will pay for it? EDF is 65 billion in debt, Flamanville 3 cost 15 billion and is unfinished etc. etc. Does not sound viable to me. Can they go somewhere and borrow hundreds of billions for new plants? Here is an article from 2012, where it was already back then clear change is needed: https://www.reuters.com/article/uk-france-nuclear-watchdog-idUKBRE8AL0TA20121122 https://www.reuters.com/article/uk-france-nuclear-watchdog-i... . But it never happened. My guess is there was no money for it. I am not a free market zealot, but you cannot compare the final price to the one in Germany. The electricity market there contains hundreds of companies that all need to be profitable, or at least not lose money, or they will simply be removed from the market. The only exception I can think of are the four electricity distributors which have regional monopolies for obvious reasons. Even the made up number of 500 billion for renewables, even if true, would not mean it cost anybody anything other than what they paid for electricity - the renewables surcharge was always a part of the bill until it was removed. Every model has flaws, but at least here you always know what the true price is, and Scholz or Merkel or whoever doesn't go around making plans on how they will build nuclear plants, which Macron does all the time.

by pyrale 3y ago

locallost 3y ago

It doesn't make much sense to say the company is making a profit, but it's only losing money because of maintenance and it will not be able to replace its current plants because it's undercapitalized. All those things are a part of running a business. The cost of electricity is not fuel plus operations, it's the funding for a plant, the maintenance, and once that's paid off the depreciation of the asset which will eventually need to be replaced. I don't understand why this is so difficult. Also for the EDF being forced to buy Areva, I mean, you need to pick a side. Either you are a real business and you don't need to do that, or you are a state owned political tool. If it's a real business, will it go to a bank or issue bonds for hundreds of billions it will take to eventually replace the current plants? If not, then that investment in Areva will be very cheap when the time comes for the state to fund the new plants. Macron is talking about new ones for at least four years.

pyrale 3y ago
> it's only losing money because of maintenance The "grand carénage" isn't maintenance, it's an investment to extend the lifetime by 10 years. Operations and maintenance are factored in electricity prices and aren't the reason these plants were shut down in 2022. > I don't understand why this is so difficult. [...] I mean, you need to pick a side. It feels like you're misinterpreting my position. My point is that 1) production costs are low and well reflected in consumer prices and 2) the business is viable. It is completely unrelated to whether EDF is a private company or a state-owned company, whether the leadership and shareholders and are making sound decisions or whether the money made from current operations will be reinvested into new production facilities.
- locallost 3y ago
  Whatever it is, it costs EDF money, and therefore it needs to be a part of the price. Also we were at this point previously so I can only repeat what I'd already said: almost a quarter of the total plants were out last year for unplanned maintenance, meaning they had cracks in the pipes and couldn't even run. This year started in a similar way: more unexpected problems, this will again cost money. I also posted a link to the president of the EDF at the time the plants were built. His quote: "the plants were designed to run for just over 30 years". So where are the replacements. And if they were starting to get built, who will pay for it? EDF is 65 billion in debt, Flamanville 3 cost 15 billion and is unfinished etc. etc. Does not sound viable to me. Can they go somewhere and borrow hundreds of billions for new plants? Here is an article from 2012, where it was already back then clear change is needed: https://www.reuters.com/article/uk-france-nuclear-watchdog-idUKBRE8AL0TA20121122 https://www.reuters.com/article/uk-france-nuclear-watchdog-i... . But it never happened. My guess is there was no money for it. I am not a free market zealot, but you cannot compare the final price to the one in Germany. The electricity market there contains hundreds of companies that all need to be profitable, or at least not lose money, or they will simply be removed from the market. The only exception I can think of are the four electricity distributors which have regional monopolies for obvious reasons. Even the made up number of 500 billion for renewables, even if true, would not mean it cost anybody anything other than what they paid for electricity - the renewables surcharge was always a part of the bill until it was removed. Every model has flaws, but at least here you always know what the true price is, and Scholz or Merkel or whoever doesn't go around making plans on how they will build nuclear plants, which Macron does all the time.