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Topic Title: Why do we need energy investment from France, China, Japan, Korea etc?
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Created On: 13 October 2013 04:47 PM
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 13 October 2013 04:47 PM
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jarathoon

Posts: 1033
Joined: 05 September 2004

"Ed Davey hopeful of 'massive' energy investment"

http://www.bbc.co.uk/news/uk-politics-24511829

"Britain's energy sector is close to securing tens of billions of pounds in investment from the Far East, Energy Secretary Ed Davey has said.

He said a "massive" wave of investment in nuclear and other technology from China, Japan and Korea would help secure the UK's future power supply. "


A tsunami wave of investment that destroys the country perhaps!

We don't know the exact details of the deals are that the government is close to securing, because we don't deserve to know as the ones paying for it. However one thing we know for sure is that these are not "investments".

The payouts will be so certain that they will in effect be new forms of trans-national taxation that the British people will be paying to foreign countries.

If this is going to be case and people like me aren't going to gain enough popular support to stop this nonsense, then in backing down, we should at least demand that our own pension funds should be given the chance to benefit from this new form of perpetual levied income bond.

The government is going to make the gold plated income streams from third generation nuclear so certain and so large for foreign sovereign "investors" that I am starting to think it would be better option for me to put my entire pension fund into it, instead of foreign sovereign wealth funds.

Why can't I, a citizen of the UK, be given a chance to live a life of great luxury in retirement, without wanting for anything courtesy of the proletariat fuel poor; on the same guaranteed income deals as either foreign sovereign "investors" or the UK politicians who now work for them?

James Arathoon


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James Arathoon
 13 October 2013 05:29 PM
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westonpa

Posts: 1771
Joined: 10 October 2007

There is nothing at all wrong with having a foreign government investing in the UK.

I await the announcement anytime soon that China has taken a 50% stake in HS2.

Regards.
 13 October 2013 07:04 PM
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jarathoon

Posts: 1033
Joined: 05 September 2004

Originally posted by: westonpa

There is nothing at all wrong with having a foreign government investing in the UK.



I am saying there is something wrong with negotiating publicly subsidised deals with guaranteed income underwritten by the British public (which includes the fuel poor), in which ONLY foreign sovereign wealth funds are given the opportunity to invest.

I know I would have to become a complete and utter hypocrite to invest in such things (like the political and cultural elites that currently lead us in regards energy and HS2), but at least I will be a warm hypocrite, with some form of guaranteed income in retirement that increases at the same rate as fuel prices. I admit I would become a vein, pitiful and shameful hypocrite, destined to join the ranks of the political and sociopathic elites, as their lackey.

As such my chief duties would be to keep public order by helping suppress the masses and also by helping to digging the extra mass graves needed for the fuel poor; whether they die in rioting or from winter cold they will still need burying to prevent the spread of communicable and contagious disease to the rest of us.

However utterly contemptible and parasitical my lifestyle, at least I will be offering the public a better deal than they will get from foreign sovereign wealth funds and the politicians that invite them in on the wrong terms.

James Arathoon


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James Arathoon
 14 October 2013 09:28 PM
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westonpa

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I was being facetious James, I think it's typical UK Government, sell out the big benefits to other countries and spend uk public money on projects with poor returns.

I think we are simply looking for short term gain.

Regards.
 16 October 2013 02:59 PM
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jarathoon

Posts: 1033
Joined: 05 September 2004

The government looks like it is acting responsibly in trying to claw back bill payer subsidies into the treasury direct. However the need to design arrangements to claw back public subsidies is due to gross stupidity and incompetence on their part in the first place.

The cost envelope that EDF will now be working within is absolutely enormous. After 10 years of inflation (assuming 3%) up rating at an initial £95 per MWhe strike price comes exactly into the fixed strike price band of £130-£150 per MWhe that EDF originally wanted. However this is just the start; at the end of the 40 year contract now being discussed, electricity strike prices could easily rise to over £400 per MWhe (assuming 3% inflation per year).

In the final two years of the contract EDF will collecting more money than the 3.2 GW power stations originally cost to build; on my estimates over £18 billion will be collected in at Hinkley Point C in that final two year period under contract (at 80% utilisation). Remember the loan to build the power stations will not have been going up with inflation and EDF will have been laughing all the way to the bank well before this stage has been reached.

These figures are absolutely mind blowing.

The profits for EDF and its partners will be absolutely enormous even with a clawback to 10% profits on subsidised income.

The government will want to claw back excess profits, so the Treasury will wait at the profit line for their cut, but little of what they were originally expecting may arrive at the bottom line.

All businesses are free to declare whatever costs and profits they think advantageous to them and their shareholders, especially if they become motivated in a desire for easy public money. The process of redirecting money away from the profit line work best if the main shareholders of a particular company are also the main contracting companies to that effectively run the business; who can provide staff and services to run the company using a complex network of opaque contracts. Using such arrangements it would be very easy to leagally launder public cash out of the business, if the the desire was there to do this.

My feeling is that the politicians just want to steam roller a flawed deal through whatever the eventual costs to the public.

If you are going to use highly inflated strike prices as an initial subsidy you cannot up rate them with inflation, because in effect you amplify that subsidy year in year out for the length of the contract; eventually the subsidy becomes bloated beyond all belief and will bancrupt the country.

James Arathoon


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James Arathoon
 18 October 2013 10:55 AM
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acsinuk

Posts: 153
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The problem is us!!! We love to purchase modern electronic goods at a lower price than we are prepared to produce them for. Why pay twice as much for an item produced here with expensive labour?? We support free trade don't we.
This means that China has surplus sterling in the billions which they could use to buy up lots of the property in England if they choose to. Well, why not let them use that foreign exchange to finance something useful like a nuclear power plant? What the government must do is to make sure we can monitor the progress of the construction using the health and safety and other regulations and that we have sufficient engineers on site to make sure that once commissioned we know everything about the plant and its workings.
Black boxes of a Chinese Siemens/GE electronics to control the feed rods and sync. are not acceptable without full circuitry and setup info. Once commissioned we must be the people to operate and run the plant using 100's of locals on a shift rota system.
CliveS
 18 October 2013 02:49 PM
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jarathoon

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Joined: 05 September 2004

Clive,

Very few British companies will get nuclear engineering contracts to work on Hinkley Point C. EDF will mostly want to go with contractors who have they have already worked with at the new EPR's being constructed at Flamanville or Olkiluoto. They can't be blamed for wanting to go with who and what they know.

New third generation nuclear stations will have to be built in the UK with foreign labour and resources, because the UK has not got a viable nuclear industry anymore. Despite all the slick looking nuclear passports being issued, everyone knows that it is industrial experience in a commercial environment that really counts at the end of the day.

After another 10 or 20 years we won't have enough of a nuclear industry left to attempt the process of rebuilding it. This would have to be done slowly and methodically over the next 20 years as I plan, to meet the challenge of building fourth generation nuclear reactors, in particular molten salt reactors. Most of our post - graduate engineering students are not UK citizens; we have to encourage some of them to stay here to gain industrial experience if we want to turn things around in the UK. The nuclear fission industry hasn't yet got a good and long track record of employing and promoting ethnic minority applicants, so why would they apply, unless there are really large efforts and programmes set up to attract them in and to keep them here.

Giving the go ahead to building third generation nuclear stations will effectively consign our nuclear engineering industry to history, because all our spare public cash for the next 40 years will be effectively ***** away in subsidies and moving nuclear waste around from place to place in a vain attempt to show that progress is being made on the waste issue. There may be some pretence at training people up as nuclear engineers, while we ***** all our cash away, but this will mostly be for academic window dressing purposes.

Yes we will end up encouraging a community of academic physicists and engineers, that see little need to priortize work in terms of cost and practicality; they will still be around in 10 years time trying to build power stations with costly and unreliable particle accelerators or tokamak fusion reactors, I am sure of that. There will be plenty of photo opportunities for the politicians, so that they can pretend we are investing for a better future.

We need an innovative industrial engineering base and this consists of the sort of people who are willing to quietly strive with no thanks or fame and get things built and working reliably with a constrained and limited budget that the rest of us can afford (the sort of person I was before my mental breakdown at Imperial College, when I unwisely tried to comprehend the utterly incomprehensible nonsense written by a large array of humanities academics and social scientists on the subject of the history of science and engineering).

I apologise that I am no longer the quite obedient indiustrial engineer that quietly kept Britain running. I apologise to everyone for the shift in my personality that occurred following my breakdown. I apologise to everyone for no longer being able to turn a blind eye while the political and governing elites, slowly but surely, destroy this country, whether through incompetence, vain self-interest or greed. I apologise for no longer being the person I once was; a quiet engineer who just got on with his contract work at old ICI plants,and at Astra-Zeneca, Syngenta, Rolls Royce (now Bentley Cars), Faiveley Transport, Ocado, Cerulean, BOC Edwards and Neoresins in Holland as it was once known. None of this experience is relevant anymore and post breakdown, with a different set of eyes and a willingness to upset the governing elites, all I am now qualified to do is clean the toilets at HS2 Ltd and DECC, whilst watching them flush away billions and billions of pounds of public money for no good reason.

The problem I am raising in this post is not about any of the above, though this all remains important, the issue I am raising is about how third generation nuclear power stations at any cost are to be financed.

UK pension funds and UK businesses collectively have plenty of money to invest and if the government had been honest with them from the outset about how much public and bill payer money it was prepared to throw at them to get third generation nuclear power stations, at any cost, built. Given the loan guarantees and income streams now on the table, I am sure that the UK pension industry could have come up with a deal, given the rivers of cash now apparently on offer to foreign government wealth funds.

All rational investors in the UK thought that nuclear was too expensive and too risky to build, so they thought that the government would at some stage give up and come up with a better more cost effective long term strategy. Well this didn't happen and now the government has decided to underwrite all the expense and risk of third generation nuclear new build and potentially sign up to contracts that will shower the foreign governments in so much cash over the next 40 years, that the government has had to spend most of its time recently trying to working out how it can claw back the some of this excess cash back into the vaults of treasury (not back bill payers), whilst trying to convince foreign governments that a future UK government won't use this mechanism to renege on the deal at a later date.

The people of Britain have now ended up with a secret deal being negotiated between three or four governments; cutting out the UK public, cutting out UK academics and engineers; cutting out UK think tanks; cutting out UK investors and UK pension funds, cutting out UK democracy; cutting out UK debate and lastly cutting out UK businesses and UK workers. This is a secret deal that will leave the UK nuclear industry without access to contracts and without a strategically managed long term future.

When people conspired to do such grievous and conspicuous harm to this country in the past, the crime was called treason!

The energy crisis won't be solved by powerful corporate interests and foreign governments lobbying for favours and subsidies to maintain the status quo, by the simple expedient of repackaging old technologies, or indeed maintaining the status quo with new imaginary sticking plasters, like CCS, that are fictional technologies that won't work in practice because they are up against the laws of thermodynamics, rather than the laws of the land. The laws of the land are completely different in that they are human creations amenable to change.

The energy crisis in an engineering and social crisis and that is now leading to a political crisis; it has to be solved by engineering and social innovation, not financial innovation, political rhetoric on policy, or by governments rearranging deck chairs to suit incumbent players. Inventing new mechanisms for paying subsidies will just get us the equivalent of a Common Agricultural Policy for Energy.

The politicians were not voted in to destroy this country and its industrial base by any means they could, they were voted in to build this country up by giving UK citizens the confidence to take on tasks.

James Arathoon

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James Arathoon
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