1) UK nuclear: Hinkley gets £2bn infrastructure guarantee
The Chancellor, George Osborne has announced a £2bn infrastructure investment guarantee to support the financing of the Hinkley C power plant. He said it would allow Chinese investors to raise funds and pave the way for a final investment decision.
This means that the government is offering a guarantee to commercial lenders that the taxpayer would step in and repay them if the developers went bust – which is regarded as necessary to secure financing for the project, The Telegraph’s Emily Gosden explains.
The £24.5 billion project by EDF, which has been plagued by delays and legal challenges, has also been decried as poor value for money – even by pro-nuclear technology commentators. They argued on Friday the reactor design has led to huge delays and spiraling costs in similar projects in France and Finland.
The Hinkley project has already been hit by delays associated with getting investment, which it admitted meant the project wouldn’t be up and running by 2023. A legal case against its support under EU State Aid rules led by Austria could also take years to resolve, Politico reports.
The BBC’s Robert Peston said the most striking thing about the deal to underwrite the project was Obsorne “doubling his political and economic bet on the world’s number two economy at a time when that economy is looking its most fragile for 30 years”, adding that it was paradoxical how expensive power from nuclear looks in the context of the oil price decline partly driven by China’s economic slowdown.
2) Coal finance: Taxpayers paying for coal subsidies and health impacts as well as power
The cost of coal subsidies and health impacts effectively double or triple the per-kilowatt-hour cost of coal, making renewable energy such as wind and solar economically competitive, according to a comment piece published in Science.
A new analysis from Carbon Tracker found billions of pounds worth of subsidies are spent every year by the US and Australian governments to prop up the country’s coal industries, distorting the energy market and slowing the rollout of cleaner energy sources.
Meanwhile the head of coal at BHP Billiton says anti-coal activists are winning over public opinion, making it arguably the industry’s biggest problem.
3) Oil price: Futures are down, but could oil prices stay low for 15 years?
Oil prices rose by around one percent on Monday as US drilling slowed and analysts estimated that $1.5 trillion worth of planned American production investment was uneconomical at prices of $50 per barrel or lower.
But on Friday, oil futures saw their largest daily drop in almost three weeks over concerns about the US economy on an interest rate announcement.
Goldman Sachs has followed up its $20 per barrel oil forecast by saying oil prices could remain at $50 per barrel for 15 year – till 2030. An analyst on Oilprice.com calls these preditions bearish and wonders if they should be taken seriously.
In other related news Hillary Clinton has said she would support the raising of the longstanding oil export ban from the US, but only as part of a wider deal with concessions from industry.
Also in the US, a new rule on pipeline safety is in the works after an increase in oil spills, such as the one in Santa Barbara this year.
China oil corruption: Sinopec’s former president expelled from Chinese Communist Party.
US/China renewables: US Lab agrees to help China use even more renewable energy
Fracking: Is the shale gas revolution over? Asks an analyst.