Timmy elsewhere

At the ASI.

Why are the same reactors one third the price in China than they are in Europe?

12 thoughts on “Timmy elsewhere”

  1. Acceptance of higher risk, not treating everything with the same radioactivity as a banana as nuclear waste, a large market where a pile it high sell it cheap strategy can work, no planning delays, no democracy, there are myriad reasons to expect Chinese plants to be cheaper than UK nuclear.

    What might incite a UK contractor to lower his price? I can’t think of any way it would be in his interest.

  2. I was told in the 1970s or 1980s by one of my elder-and-betters (he was better at his job than me) that Kraftwerke Union used to say when pitching for a cvontract to build as nuclear power plant “Do you want American safety or German safety?” “What’s the difference?” *A million Deutschemarks”.
    The second main difference is the cost of semi-skilled labour doing all the construction work.

  3. Aren’t they the only bidder for the UK contract, in which case I presume we are being charged the limit of what is politically acceptable?

  4. Tim,
    Any comment on today’s Hinkley Point announcement? Our dear leaders have signed up for a new nuclear power station at a guaranteed minimum price of £92.50 per megawatt hour. This is apparently twice the current market price. Other than the obvious culprits (inane CO2 targets), why are tying ourselves in to electricity at twice the market rate?

  5. Andrew: the government’s economic model suggests that over the lifecycle of the plant, scarcity will drive power prices up to that level, to the point that it’s a decent hedge. Which, should the model prove to be accurate, is fair enough.

    The accuracy of the model, obviously, is another question.

  6. Nuclear doesn’t count toward renewables targets (which is silly, but that’s a separate point) so no, that’s not the reason – it is very much a “keeping the lights on” plan.

  7. john b,

    I’m assuming the figures are inflation-linked, i.e. that it’s £92.50/mWh in 2013 prices. Hinkley Point C is expected to open in 2023. Does our government really think that in 10 years’ time, the real price of electricity will be twice today’s price? That’s a scary prospect for all those people who are currently whining about the utility companies’ 8-9% rate hikes.
    (Yes, 7% a year compounded over a decade makes a 100% increase. It’s still not a pleasant thought; especially if your home is on electric heating.)

  8. Bloke asks “what might incite a contractor to lower his price”

    I suggest a free market, as UKIP wants. Not only competition but that if such a market operated and reactors cost 1/3rd of what they do (in Europe & electricity cost about 10% of what it does, without all the wind subsidies) we would be building about 10 times as much capacity, all nuclear, as we are now. I think that a considerable incentive.

    Because reactors are high tech the lower cost of unskilled labour but lack of skilled technicians means reactors should be more expensive in China (see SpaceX compared with Chinese rockets).

    The reason for the disparity is entirely state parasitism.

  9. Andrew: yes, indeed, to all you say. There is a possibility that the combination of fracking and continued falling in the cost of solar and wind will counter the otherwise rising price trajectory, but the government is (reasonably enough IMO) taking the view that it would be foolish to rely on these happening.

    Neil: the USSR ran an immensely cost-effective nuclear programme compared to that in any western country, largely because it avoided costly and redundant health and safety bureaucracy. And that worked out brilliantly for all concerned.

  10. Neil Craig
    Yes, it’s a puzzle.
    Given the usual levels of graft (see Sochi Olympics) I’d expect Chinese reactors to cost twice as much as they should do in a free market.
    Which means ours cost SIX times what they should (graft not included).

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