Ot And nuclear power was supposed to be cheap!

[Chris Hogg]

And it'll last a lot longer.

[Tim Streater]

And EDF gets to pay for the decommissioning in 60 years time.

[87213]

Yes, but it is still a subsidy.

[Tim Streater]

Meaning you think we could have obtained the Hinkley C volts at less than £92/MWh. What sort of amount should it have been then, in your view?

Presumably, EDF did some sums about what it would cost, over the years, to build, run, refuel, and decommission the place. They then would have made some calcs about how many MWh they could supply the grid over the assumed lifetime of the plant, and came up with a figure by dividing one by the other. I assume that companies do this sort of calc all the time; I don't know whether they then add some contingencies and a profit margin, which is then presumably their lowest price they could agree to. Anything above that is then gravy.

Those are the calcs that they then take into the negotiating chamber. Presumably also their negotiating adversaries (CEGB? Gumment?, National Grid?) try to do the same sums also ahead of time, they then sit down and hammer out an agreed price.

You can only assert "subsidy" with any credibility if you have access to the figures, or can come up with your own. And how is this subsidy paid? Under the table? As a higher than necessary price?

A bit of detail to back up your assertion, please.

[Vir Campestris]

Read on Harry.

They've got actual experience of all the fuel types.

Andy

[87213]

No, just that that is clearly a subsidy, even if the other two have more of a subsidy.

I have no opinion on that. Sounds about right to me given that its much lower than the subsidy that the others get.

But that can only be a guess, particularly with the decommissioning costs.

They then would have

And they clearly don?t always get it right.

I don't know whether they then add some contingencies and a

And it remains to be seen if there is any gravy.

There is no chamber.

Wrong, that contracted price clearly is a subsidy.

And how is this subsidy

As the price they are guaranteed, regardless of what it costs them.

It isn't an assertion, it?s a fact.

[Chris Hogg]

So how do you distinguish between legitimate profit and subsidy, especially when that profit has been negotiated between a commodity supplier and a government regulator? ISTM that you're classifying any form of profit as subsidy.

[Tim Streater]

That was my thought too, but the dweeb has been unable to provide any facts to backup his assertions and so may safely be ignored.

[87213]

Without a contracted price, they get to see if they can sell the electricity generated for more than it cost them to produce.

No, just a contracted price. Yes, it is certainly possible to get the contracted price wrong and not make a profit and then there is no subsidy, but that is a different issue.

[Chris Hogg]

So are you saying that because the strike price that EDF and the government have negotiated for Hinkley-C is higher that the current wholesale price of electricity, it must be a subsidy?

[87213]

I am saying that when there is a strike price instead of EDF seeing if they can sell the electricity for more than it costs them to produce, that is clearly a subsidy, a guaranteed price they will be paid, regardless of what the wholesale price happens to be at the time.

And in the previous comment that someone else made, that the strike price is higher with wind and solar and that those were subsidised, it isnt possible to claim that a strike price is a subsidy with wind and solar but not with Hinkley C.

[Tim Streater]

That person was not claiming it was a subsidy for wind/solar. He was just pointing out the shitty value that wind/solar represents, compared to nuclear.

By saying "that is clearly a subsidy, a guaranteed price they will be paid, regardless of what the wholesale price happens to be at the time." you are just showing that you don't understand risk management. You are also assuming that the wholesale price at the time will be less than the govt will be paying EDF - otherwise it won't be a "subsidy", in your terms.

There are market traders who will buy up the whole crop that a, say, coffee farmer, expects to produce in the coming year, in advance. They are futures traders. Why does the farmer do this? Because as long as he is savvy and gets a decent enough price, it's job done: he's off-loaded the market risk to someone else. On average, over the years, he probably loses a bit and the trader gains a bit. That's the price you pay for that sort of insurance. The farmer probably couldn't afford to take the risk that there might be a glut of coffee in a given year, which would risk him getting sod all when he went to sell his crop, and go bust. The farmer, with his guaranteed price, can also do forward planning, not so easy to do when you don't know what your income will be at the end of the year.

In agreeing a strike price, the govt is in the same position as the farmer, that's all. They've offloaded their risk to EDF.

[The Other Mike]

On page 96 a map of existing transmission infrastructure so you can crayon in your carefully considered and planned engineering strategy

Please indicate your locations of this mega renewable generation that will require more "East-West electrical power transmission lines"

--

[The Natural Philosopher]

A subsidy is a profit underwritten or guarnteed by government.

[The Natural Philosopher]

It is a subsidy . Not must be.

It is government intervention in the free market

[The Natural Philosopher]

I think you have it the wrong way round. EDF have offloaded their risk to the consumer, helped by the government.

If gas declines in price EDF won't have to compete.

[Tim Streater]

The consumer always gets the short end of the stic k.

[87213]

Not when there is no price guarantee and the operation that made the wrong choice of the type of power generation gets to not make a profit or go broke.