The remarkable thing about the ongoing Hinkley C fiasco is just how long it’s going on – and how one disaster piles onto another without the project ever quite dying – so far at least.

Today’s news? Moody’s credit rating agency has just downgraded EDF’s debt from A1 to ‘A2 outlook negative’. OK, that’s still not junk grade – after all the company has the French government standing behind it as 85% owner.

But the A2 negative rating will make it all the harder and more expensive for it to raise the cash it needs – not just to build Hinkley C but to finance its forced €2.5 billion takeover of insolvent nuclear components manufacturer Areva, make good its problems, finance the impending closure and docommissioning of its own aging nuclear fleet … you get the picture.

And Hinkley C is an important cause of EDF’s sinking down the credit rating charts. “The negative outlook”, writes Moody’s, “reflects … the incremental risks associated with the Hinkley Point C (HPC) nuclear power station project in the UK, should it go ahead.”

“The outlook could be returned to stable provided that (1) EDF decides not to proceed with the HPC nuclear project”, the rating report continues, helpfully adding: “The ratings could be downgraded if (1) the HPC project were to go ahead”.

And if you ask me, that gives an unusually clear steer to the company as to how they can please credit markets and cut their borrowing costs – something that’s actually very important for a company quite so deeply indebted as EDF.

Also this week: EDF’s projected cost of building Hinkley C just took a £3 billion hike from £18 to £21 billion – though still well short of the £24 billion widely expected elsewhere.

The company also revealed that it expected 115 months (9.5 years) to pass between a final investment decision until the commissioning of the first of the two reactors. In other words, it’s pretty well impossible for it to begin before 2026.

EDF CEO Jean-Bernard Levy also revealed in February that “Definitive construction of what will be built on the site, what we call the first concrete, is on the horizon for 2019” – hardly an indication that action of any kind is imminent.

Areva’s ‘falsified’ safety certificates for nuclear components

And what was it happened last week? Oh yes, it turned out that Areva has been systematically “falsifying” (by the company’s own admission) safety certificates for components it has made for nuclear power stations, with 400 such ‘irregularities’ including to 50 components in operational nuclear reactors.

This is very bad news for EDF not just because the French government is forcing it into a shotgun takeover of what is clearly a company in deep trouble, but because many of these 50 components will be in its own power stations. And if it sues … it will be suing itself.

It also raises serious safety questions over the EPR reactors planned for Hinkley C, and under construction at other sites: Olkiluoto in Finland, Flamanville in France, and Taishan in China – not only for the components whose safety certificates were falsified, but for everything the company has ever produced because of what it reveals about its deeply dysfunctional safety ethic.

The news of the falsified safety certificates may also explain how the reactor vessel and head supplied by Areva at Flamanville went so far as installation at the heart of the plant while suffering from grave metallurgical defects owing to an excess of carbon in areas of the steel, that could lead to embrittlement and cracking of the unit.

This safety problem remains unsolved and in a worst case (for EDF, Areva and French taxpayers) could lead to the power plant’s total abandonment. It is also widely suspected that the two Taishan reactors, also forged by Areva, may suffer from the same defect.

Meanwhile all curent EPR projects are massively over time and budget. Flamanville, begun in 2006, was meant to be complete by 2012, and costs have more than trebled from €3.3 billion to €10.5 billion, with no end in sight.

Construction of the Olkiluoto EPR began in 2005 and it is not expected to commence operating until 2018, nine years late. The estimated cost has risen from €3.2 billion to €8.5 billion. Areva has already provided for a €2.7 billion writedown on the project, with further losses expected. Meanwhile the Finnish utility FTVO and Areva / Siemens are locked in a €10 billion legal battle over the cost overruns.

Which reminds me. Moody’s again: “The A2 rating is based on Moody’s expectation that EDF will have no material exposure to AREVA NP’s liabilities associated with past and existing contracts in its engineering and construction business, including the Olkiluoto 3 nuclear project in Finland.”

Just how they expect to achieve that when EDF is buying the company is hard to understand. That A2 rating could drop even lower.

Those legal cases in the European Court

But that’s not the only legal case that could mess things up for EDF. Austria and Luxembourg have a legal challenge in play against the European Commission for approving an absurdly generous subsidy package for Hinkley C that is set to pay the company almost three times the current wholesale power price for 35 years after it begins to produce power.

A second case was filed in March 2015 by Germany’s Greenpeace Energy and a host of other cooperative and municipal green energy suppliers concerned that the massive subsidy would cause prejudice against renewables in Europe’s energy market.

And last month, new legal risks: UK green electricity supplier Ecotricity and Greenpeace UK are threatening further legal action over the French government’s plan to support EDF’s wobbly finances by taking dividend payments as shares instead of cash, and buying billions of euros worth of additional shares, in order to provide working capital for Hinkley C.

The share purchases actual and proposed, they warn, fall under EU state aid rules and would need to be approved by the Commission before they could go ahead. Any attempt by EDF to sneak a massive share issue out to the French government would be challenged in the courts.

And the simple fact is that state aid is the only way that Hinkley C will ever be built. Private investors won’t touch it with a bargepole, and here’s why. In theory the project offers investors an enviable 9% rate of return. But that’s only if it’s finished on time and on budget. If it’s not, then that number starts falling fast.

The nightmare scenario that’s scaring investors away

But it gets worse. What’s really freaking out investors is the possibility that they could sink all that money into a massive nuclear project that just doesn’t work.

Their return under the ‘contract for difference’ is based entirely on getting that premium rate for their power of approaching £100 per megawatt hour, three times higher than the current wholesale market level. So what if it turns out a lemon?

Now no one expects that it won’t work at all. But what if it keeps on tripping out with mysterious safety alerts generated by all the unbelievably complex software that’s going to run the show? What if it’s unable to pass its commissioning tests as a result? Or what if it’s permanently on the blink and only able to run intermittently?

Then EDF will have turned £21 billion or £24 billion of good money into a massive decommissioning liability. This is the risk that is alarming Moody’s, investors and EDF unions, not to mention the company’s former finance director Thomas Piquemal who resigned in March this year fearing that Hinkley C could just finish EDF off.

And it could happen: at today’s €11.33 share price, EDF is valued at €21.76 billion, or £17.1 billion – considerably less than even the lowest estimates of the Hinkley C project cost.

So what are EDF’s options here? One is to abandon the project in the process writing off the £2 billion it has so far invested in the project, as Moody’s, unions and equity investors hope. Another is to sell the site on to the Chinese General Nuclear Company (CGN) which is poised to take a 33.5% stake in the project in a deal announced last October.

But now even that last possiblity looks like it’s off the cards – perhaps as a result of the British Queen’s unguarded comment at a Buckingham Palace garden party last week that the Chinese delegation to London last October had been “very rude”. And yes, that was the official visit on which CGN’s investment in Hinkley C was wrapped up.

But whatever the reason, CGN has today stated that reports that China was planning to take over the Hinkley C site in the event that EDF backs out were “without foundation”. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”

In other news, Germany’s energy minister Sigmar Gabriel has just announced plans to invest €17 billion over five years in energy efficient technologies as part of an ‘Effizienzoffensive’ campaign aiming to halve the country’s energy consumption by 2050. That’s under a quarter of the UK’s estimated cost of supporting Hinkley C. Could Gabriel possibly know something we don’t?

But back to Hinkley C: how much longer can the tragicomedy go on before the it’s finally booed off the stage? It really can’t last much longer now.

Oliver Tickell is Contributing Editor at The Ecologist.

The remarkable thing about the ongoing Hinkley C fiasco is just how long it’s going on – and how one disaster piles onto another without the project ever quite dying – so far at least.

Today’s news? Moody’s credit rating agency has just downgraded EDF’s debt from A1 to ‘A2 outlook negative’. OK, that’s still not junk grade – after all the company has the French government standing behind it as 85% owner.

But the A2 negative rating will make it all the harder and more expensive for it to raise the cash it needs – not just to build Hinkley C but to finance its forced €2.5 billion takeover of insolvent nuclear components manufacturer Areva, make good its problems, finance the impending closure and docommissioning of its own aging nuclear fleet … you get the picture.

And Hinkley C is an important cause of EDF’s sinking down the credit rating charts. “The negative outlook”, writes Moody’s, “reflects … the incremental risks associated with the Hinkley Point C (HPC) nuclear power station project in the UK, should it go ahead.”

“The outlook could be returned to stable provided that (1) EDF decides not to proceed with the HPC nuclear project”, the rating report continues, helpfully adding: “The ratings could be downgraded if (1) the HPC project were to go ahead”.

And if you ask me, that gives an unusually clear steer to the company as to how they can please credit markets and cut their borrowing costs – something that’s actually very important for a company quite so deeply indebted as EDF.

Also this week: EDF’s projected cost of building Hinkley C just took a £3 billion hike from £18 to £21 billion – though still well short of the £24 billion widely expected elsewhere.

The company also revealed that it expected 115 months (9.5 years) to pass between a final investment decision until the commissioning of the first of the two reactors. In other words, it’s pretty well impossible for it to begin before 2026.

EDF CEO Jean-Bernard Levy also revealed in February that “Definitive construction of what will be built on the site, what we call the first concrete, is on the horizon for 2019” – hardly an indication that action of any kind is imminent.

Areva’s ‘falsified’ safety certificates for nuclear components

And what was it happened last week? Oh yes, it turned out that Areva has been systematically “falsifying” (by the company’s own admission) safety certificates for components it has made for nuclear power stations, with 400 such ‘irregularities’ including to 50 components in operational nuclear reactors.

This is very bad news for EDF not just because the French government is forcing it into a shotgun takeover of what is clearly a company in deep trouble, but because many of these 50 components will be in its own power stations. And if it sues … it will be suing itself.

It also raises serious safety questions over the EPR reactors planned for Hinkley C, and under construction at other sites: Olkiluoto in Finland, Flamanville in France, and Taishan in China – not only for the components whose safety certificates were falsified, but for everything the company has ever produced because of what it reveals about its deeply dysfunctional safety ethic.

The news of the falsified safety certificates may also explain how the reactor vessel and head supplied by Areva at Flamanville went so far as installation at the heart of the plant while suffering from grave metallurgical defects owing to an excess of carbon in areas of the steel, that could lead to embrittlement and cracking of the unit.

This safety problem remains unsolved and in a worst case (for EDF, Areva and French taxpayers) could lead to the power plant’s total abandonment. It is also widely suspected that the two Taishan reactors, also forged by Areva, may suffer from the same defect.

Meanwhile all curent EPR projects are massively over time and budget. Flamanville, begun in 2006, was meant to be complete by 2012, and costs have more than trebled from €3.3 billion to €10.5 billion, with no end in sight.

Construction of the Olkiluoto EPR began in 2005 and it is not expected to commence operating until 2018, nine years late. The estimated cost has risen from €3.2 billion to €8.5 billion. Areva has already provided for a €2.7 billion writedown on the project, with further losses expected. Meanwhile the Finnish utility FTVO and Areva / Siemens are locked in a €10 billion legal battle over the cost overruns.

Which reminds me. Moody’s again: “The A2 rating is based on Moody’s expectation that EDF will have no material exposure to AREVA NP’s liabilities associated with past and existing contracts in its engineering and construction business, including the Olkiluoto 3 nuclear project in Finland.”

Just how they expect to achieve that when EDF is buying the company is hard to understand. That A2 rating could drop even lower.

Those legal cases in the European Court

But that’s not the only legal case that could mess things up for EDF. Austria and Luxembourg have a legal challenge in play against the European Commission for approving an absurdly generous subsidy package for Hinkley C that is set to pay the company almost three times the current wholesale power price for 35 years after it begins to produce power.

A second case was filed in March 2015 by Germany’s Greenpeace Energy and a host of other cooperative and municipal green energy suppliers concerned that the massive subsidy would cause prejudice against renewables in Europe’s energy market.

And last month, new legal risks: UK green electricity supplier Ecotricity and Greenpeace UK are threatening further legal action over the French government’s plan to support EDF’s wobbly finances by taking dividend payments as shares instead of cash, and buying billions of euros worth of additional shares, in order to provide working capital for Hinkley C.

The share purchases actual and proposed, they warn, fall under EU state aid rules and would need to be approved by the Commission before they could go ahead. Any attempt by EDF to sneak a massive share issue out to the French government would be challenged in the courts.

And the simple fact is that state aid is the only way that Hinkley C will ever be built. Private investors won’t touch it with a bargepole, and here’s why. In theory the project offers investors an enviable 9% rate of return. But that’s only if it’s finished on time and on budget. If it’s not, then that number starts falling fast.

The nightmare scenario that’s scaring investors away

But it gets worse. What’s really freaking out investors is the possibility that they could sink all that money into a massive nuclear project that just doesn’t work.

Their return under the ‘contract for difference’ is based entirely on getting that premium rate for their power of approaching £100 per megawatt hour, three times higher than the current wholesale market level. So what if it turns out a lemon?

Now no one expects that it won’t work at all. But what if it keeps on tripping out with mysterious safety alerts generated by all the unbelievably complex software that’s going to run the show? What if it’s unable to pass its commissioning tests as a result? Or what if it’s permanently on the blink and only able to run intermittently?

Then EDF will have turned £21 billion or £24 billion of good money into a massive decommissioning liability. This is the risk that is alarming Moody’s, investors and EDF unions, not to mention the company’s former finance director Thomas Piquemal who resigned in March this year fearing that Hinkley C could just finish EDF off.

And it could happen: at today’s €11.33 share price, EDF is valued at €21.76 billion, or £17.1 billion – considerably less than even the lowest estimates of the Hinkley C project cost.

So what are EDF’s options here? One is to abandon the project in the process writing off the £2 billion it has so far invested in the project, as Moody’s, unions and equity investors hope. Another is to sell the site on to the Chinese General Nuclear Company (CGN) which is poised to take a 33.5% stake in the project in a deal announced last October.

But now even that last possiblity looks like it’s off the cards – perhaps as a result of the British Queen’s unguarded comment at a Buckingham Palace garden party last week that the Chinese delegation to London last October had been “very rude”. And yes, that was the official visit on which CGN’s investment in Hinkley C was wrapped up.

But whatever the reason, CGN has today stated that reports that China was planning to take over the Hinkley C site in the event that EDF backs out were “without foundation”. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”

In other news, Germany’s energy minister Sigmar Gabriel has just announced plans to invest €17 billion over five years in energy efficient technologies as part of an ‘Effizienzoffensive’ campaign aiming to halve the country’s energy consumption by 2050. That’s under a quarter of the UK’s estimated cost of supporting Hinkley C. Could Gabriel possibly know something we don’t?

But back to Hinkley C: how much longer can the tragicomedy go on before the it’s finally booed off the stage? It really can’t last much longer now.

Oliver Tickell is Contributing Editor at The Ecologist.

The remarkable thing about the ongoing Hinkley C fiasco is just how long it’s going on – and how one disaster piles onto another without the project ever quite dying – so far at least.

Today’s news? Moody’s credit rating agency has just downgraded EDF’s debt from A1 to ‘A2 outlook negative’. OK, that’s still not junk grade – after all the company has the French government standing behind it as 85% owner.

But the A2 negative rating will make it all the harder and more expensive for it to raise the cash it needs – not just to build Hinkley C but to finance its forced €2.5 billion takeover of insolvent nuclear components manufacturer Areva, make good its problems, finance the impending closure and docommissioning of its own aging nuclear fleet … you get the picture.

And Hinkley C is an important cause of EDF’s sinking down the credit rating charts. “The negative outlook”, writes Moody’s, “reflects … the incremental risks associated with the Hinkley Point C (HPC) nuclear power station project in the UK, should it go ahead.”

“The outlook could be returned to stable provided that (1) EDF decides not to proceed with the HPC nuclear project”, the rating report continues, helpfully adding: “The ratings could be downgraded if (1) the HPC project were to go ahead”.

And if you ask me, that gives an unusually clear steer to the company as to how they can please credit markets and cut their borrowing costs – something that’s actually very important for a company quite so deeply indebted as EDF.

Also this week: EDF’s projected cost of building Hinkley C just took a £3 billion hike from £18 to £21 billion – though still well short of the £24 billion widely expected elsewhere.

The company also revealed that it expected 115 months (9.5 years) to pass between a final investment decision until the commissioning of the first of the two reactors. In other words, it’s pretty well impossible for it to begin before 2026.

EDF CEO Jean-Bernard Levy also revealed in February that “Definitive construction of what will be built on the site, what we call the first concrete, is on the horizon for 2019” – hardly an indication that action of any kind is imminent.

Areva’s ‘falsified’ safety certificates for nuclear components

And what was it happened last week? Oh yes, it turned out that Areva has been systematically “falsifying” (by the company’s own admission) safety certificates for components it has made for nuclear power stations, with 400 such ‘irregularities’ including to 50 components in operational nuclear reactors.

This is very bad news for EDF not just because the French government is forcing it into a shotgun takeover of what is clearly a company in deep trouble, but because many of these 50 components will be in its own power stations. And if it sues … it will be suing itself.

It also raises serious safety questions over the EPR reactors planned for Hinkley C, and under construction at other sites: Olkiluoto in Finland, Flamanville in France, and Taishan in China – not only for the components whose safety certificates were falsified, but for everything the company has ever produced because of what it reveals about its deeply dysfunctional safety ethic.

The news of the falsified safety certificates may also explain how the reactor vessel and head supplied by Areva at Flamanville went so far as installation at the heart of the plant while suffering from grave metallurgical defects owing to an excess of carbon in areas of the steel, that could lead to embrittlement and cracking of the unit.

This safety problem remains unsolved and in a worst case (for EDF, Areva and French taxpayers) could lead to the power plant’s total abandonment. It is also widely suspected that the two Taishan reactors, also forged by Areva, may suffer from the same defect.

Meanwhile all curent EPR projects are massively over time and budget. Flamanville, begun in 2006, was meant to be complete by 2012, and costs have more than trebled from €3.3 billion to €10.5 billion, with no end in sight.

Construction of the Olkiluoto EPR began in 2005 and it is not expected to commence operating until 2018, nine years late. The estimated cost has risen from €3.2 billion to €8.5 billion. Areva has already provided for a €2.7 billion writedown on the project, with further losses expected. Meanwhile the Finnish utility FTVO and Areva / Siemens are locked in a €10 billion legal battle over the cost overruns.

Which reminds me. Moody’s again: “The A2 rating is based on Moody’s expectation that EDF will have no material exposure to AREVA NP’s liabilities associated with past and existing contracts in its engineering and construction business, including the Olkiluoto 3 nuclear project in Finland.”

Just how they expect to achieve that when EDF is buying the company is hard to understand. That A2 rating could drop even lower.

Those legal cases in the European Court

But that’s not the only legal case that could mess things up for EDF. Austria and Luxembourg have a legal challenge in play against the European Commission for approving an absurdly generous subsidy package for Hinkley C that is set to pay the company almost three times the current wholesale power price for 35 years after it begins to produce power.

A second case was filed in March 2015 by Germany’s Greenpeace Energy and a host of other cooperative and municipal green energy suppliers concerned that the massive subsidy would cause prejudice against renewables in Europe’s energy market.

And last month, new legal risks: UK green electricity supplier Ecotricity and Greenpeace UK are threatening further legal action over the French government’s plan to support EDF’s wobbly finances by taking dividend payments as shares instead of cash, and buying billions of euros worth of additional shares, in order to provide working capital for Hinkley C.

The share purchases actual and proposed, they warn, fall under EU state aid rules and would need to be approved by the Commission before they could go ahead. Any attempt by EDF to sneak a massive share issue out to the French government would be challenged in the courts.

And the simple fact is that state aid is the only way that Hinkley C will ever be built. Private investors won’t touch it with a bargepole, and here’s why. In theory the project offers investors an enviable 9% rate of return. But that’s only if it’s finished on time and on budget. If it’s not, then that number starts falling fast.

The nightmare scenario that’s scaring investors away

But it gets worse. What’s really freaking out investors is the possibility that they could sink all that money into a massive nuclear project that just doesn’t work.

Their return under the ‘contract for difference’ is based entirely on getting that premium rate for their power of approaching £100 per megawatt hour, three times higher than the current wholesale market level. So what if it turns out a lemon?

Now no one expects that it won’t work at all. But what if it keeps on tripping out with mysterious safety alerts generated by all the unbelievably complex software that’s going to run the show? What if it’s unable to pass its commissioning tests as a result? Or what if it’s permanently on the blink and only able to run intermittently?

Then EDF will have turned £21 billion or £24 billion of good money into a massive decommissioning liability. This is the risk that is alarming Moody’s, investors and EDF unions, not to mention the company’s former finance director Thomas Piquemal who resigned in March this year fearing that Hinkley C could just finish EDF off.

And it could happen: at today’s €11.33 share price, EDF is valued at €21.76 billion, or £17.1 billion – considerably less than even the lowest estimates of the Hinkley C project cost.

So what are EDF’s options here? One is to abandon the project in the process writing off the £2 billion it has so far invested in the project, as Moody’s, unions and equity investors hope. Another is to sell the site on to the Chinese General Nuclear Company (CGN) which is poised to take a 33.5% stake in the project in a deal announced last October.

But now even that last possiblity looks like it’s off the cards – perhaps as a result of the British Queen’s unguarded comment at a Buckingham Palace garden party last week that the Chinese delegation to London last October had been “very rude”. And yes, that was the official visit on which CGN’s investment in Hinkley C was wrapped up.

But whatever the reason, CGN has today stated that reports that China was planning to take over the Hinkley C site in the event that EDF backs out were “without foundation”. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”

In other news, Germany’s energy minister Sigmar Gabriel has just announced plans to invest €17 billion over five years in energy efficient technologies as part of an ‘Effizienzoffensive’ campaign aiming to halve the country’s energy consumption by 2050. That’s under a quarter of the UK’s estimated cost of supporting Hinkley C. Could Gabriel possibly know something we don’t?

But back to Hinkley C: how much longer can the tragicomedy go on before the it’s finally booed off the stage? It really can’t last much longer now.

Oliver Tickell is Contributing Editor at The Ecologist.

The remarkable thing about the ongoing Hinkley C fiasco is just how long it’s going on – and how one disaster piles onto another without the project ever quite dying – so far at least.

Today’s news? Moody’s credit rating agency has just downgraded EDF’s debt from A1 to ‘A2 outlook negative’. OK, that’s still not junk grade – after all the company has the French government standing behind it as 85% owner.

But the A2 negative rating will make it all the harder and more expensive for it to raise the cash it needs – not just to build Hinkley C but to finance its forced €2.5 billion takeover of insolvent nuclear components manufacturer Areva, make good its problems, finance the impending closure and docommissioning of its own aging nuclear fleet … you get the picture.

And Hinkley C is an important cause of EDF’s sinking down the credit rating charts. “The negative outlook”, writes Moody’s, “reflects … the incremental risks associated with the Hinkley Point C (HPC) nuclear power station project in the UK, should it go ahead.”

“The outlook could be returned to stable provided that (1) EDF decides not to proceed with the HPC nuclear project”, the rating report continues, helpfully adding: “The ratings could be downgraded if (1) the HPC project were to go ahead”.

And if you ask me, that gives an unusually clear steer to the company as to how they can please credit markets and cut their borrowing costs – something that’s actually very important for a company quite so deeply indebted as EDF.

Also this week: EDF’s projected cost of building Hinkley C just took a £3 billion hike from £18 to £21 billion – though still well short of the £24 billion widely expected elsewhere.

The company also revealed that it expected 115 months (9.5 years) to pass between a final investment decision until the commissioning of the first of the two reactors. In other words, it’s pretty well impossible for it to begin before 2026.

EDF CEO Jean-Bernard Levy also revealed in February that “Definitive construction of what will be built on the site, what we call the first concrete, is on the horizon for 2019” – hardly an indication that action of any kind is imminent.

Areva’s ‘falsified’ safety certificates for nuclear components

And what was it happened last week? Oh yes, it turned out that Areva has been systematically “falsifying” (by the company’s own admission) safety certificates for components it has made for nuclear power stations, with 400 such ‘irregularities’ including to 50 components in operational nuclear reactors.

This is very bad news for EDF not just because the French government is forcing it into a shotgun takeover of what is clearly a company in deep trouble, but because many of these 50 components will be in its own power stations. And if it sues … it will be suing itself.

It also raises serious safety questions over the EPR reactors planned for Hinkley C, and under construction at other sites: Olkiluoto in Finland, Flamanville in France, and Taishan in China – not only for the components whose safety certificates were falsified, but for everything the company has ever produced because of what it reveals about its deeply dysfunctional safety ethic.

The news of the falsified safety certificates may also explain how the reactor vessel and head supplied by Areva at Flamanville went so far as installation at the heart of the plant while suffering from grave metallurgical defects owing to an excess of carbon in areas of the steel, that could lead to embrittlement and cracking of the unit.

This safety problem remains unsolved and in a worst case (for EDF, Areva and French taxpayers) could lead to the power plant’s total abandonment. It is also widely suspected that the two Taishan reactors, also forged by Areva, may suffer from the same defect.

Meanwhile all curent EPR projects are massively over time and budget. Flamanville, begun in 2006, was meant to be complete by 2012, and costs have more than trebled from €3.3 billion to €10.5 billion, with no end in sight.

Construction of the Olkiluoto EPR began in 2005 and it is not expected to commence operating until 2018, nine years late. The estimated cost has risen from €3.2 billion to €8.5 billion. Areva has already provided for a €2.7 billion writedown on the project, with further losses expected. Meanwhile the Finnish utility FTVO and Areva / Siemens are locked in a €10 billion legal battle over the cost overruns.

Which reminds me. Moody’s again: “The A2 rating is based on Moody’s expectation that EDF will have no material exposure to AREVA NP’s liabilities associated with past and existing contracts in its engineering and construction business, including the Olkiluoto 3 nuclear project in Finland.”

Just how they expect to achieve that when EDF is buying the company is hard to understand. That A2 rating could drop even lower.

Those legal cases in the European Court

But that’s not the only legal case that could mess things up for EDF. Austria and Luxembourg have a legal challenge in play against the European Commission for approving an absurdly generous subsidy package for Hinkley C that is set to pay the company almost three times the current wholesale power price for 35 years after it begins to produce power.

A second case was filed in March 2015 by Germany’s Greenpeace Energy and a host of other cooperative and municipal green energy suppliers concerned that the massive subsidy would cause prejudice against renewables in Europe’s energy market.

And last month, new legal risks: UK green electricity supplier Ecotricity and Greenpeace UK are threatening further legal action over the French government’s plan to support EDF’s wobbly finances by taking dividend payments as shares instead of cash, and buying billions of euros worth of additional shares, in order to provide working capital for Hinkley C.

The share purchases actual and proposed, they warn, fall under EU state aid rules and would need to be approved by the Commission before they could go ahead. Any attempt by EDF to sneak a massive share issue out to the French government would be challenged in the courts.

And the simple fact is that state aid is the only way that Hinkley C will ever be built. Private investors won’t touch it with a bargepole, and here’s why. In theory the project offers investors an enviable 9% rate of return. But that’s only if it’s finished on time and on budget. If it’s not, then that number starts falling fast.

The nightmare scenario that’s scaring investors away

But it gets worse. What’s really freaking out investors is the possibility that they could sink all that money into a massive nuclear project that just doesn’t work.

Their return under the ‘contract for difference’ is based entirely on getting that premium rate for their power of approaching £100 per megawatt hour, three times higher than the current wholesale market level. So what if it turns out a lemon?

Now no one expects that it won’t work at all. But what if it keeps on tripping out with mysterious safety alerts generated by all the unbelievably complex software that’s going to run the show? What if it’s unable to pass its commissioning tests as a result? Or what if it’s permanently on the blink and only able to run intermittently?

Then EDF will have turned £21 billion or £24 billion of good money into a massive decommissioning liability. This is the risk that is alarming Moody’s, investors and EDF unions, not to mention the company’s former finance director Thomas Piquemal who resigned in March this year fearing that Hinkley C could just finish EDF off.

And it could happen: at today’s €11.33 share price, EDF is valued at €21.76 billion, or £17.1 billion – considerably less than even the lowest estimates of the Hinkley C project cost.

So what are EDF’s options here? One is to abandon the project in the process writing off the £2 billion it has so far invested in the project, as Moody’s, unions and equity investors hope. Another is to sell the site on to the Chinese General Nuclear Company (CGN) which is poised to take a 33.5% stake in the project in a deal announced last October.

But now even that last possiblity looks like it’s off the cards – perhaps as a result of the British Queen’s unguarded comment at a Buckingham Palace garden party last week that the Chinese delegation to London last October had been “very rude”. And yes, that was the official visit on which CGN’s investment in Hinkley C was wrapped up.

But whatever the reason, CGN has today stated that reports that China was planning to take over the Hinkley C site in the event that EDF backs out were “without foundation”. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”

In other news, Germany’s energy minister Sigmar Gabriel has just announced plans to invest €17 billion over five years in energy efficient technologies as part of an ‘Effizienzoffensive’ campaign aiming to halve the country’s energy consumption by 2050. That’s under a quarter of the UK’s estimated cost of supporting Hinkley C. Could Gabriel possibly know something we don’t?

But back to Hinkley C: how much longer can the tragicomedy go on before the it’s finally booed off the stage? It really last much longer now.

Oliver Tickell is Contributing Editor at The Ecologist.

The remarkable thing about the ongoing Hinkley C fiasco is just how long it’s going on – and how one disaster piles onto another without the project ever quite dying – so far at least.

Today’s news? Moody’s credit rating agency has just downgraded EDF’s debt from A1 to ‘A2 outlook negative’. OK, that’s still not junk grade – after all the company has the French government standing behind it as 85% owner.

But the A2 negative rating will make it all the harder and more expensive for it to raise the cash it needs – not just to build Hinkley C but to finance its forced €2.5 billion takeover of insolvent nuclear components manufacturer Areva, make good its problems, finance the impending closure and docommissioning of its own aging nuclear fleet … you get the picture.

And Hinkley C is an important cause of EDF’s sinking down the credit rating charts. “The negative outlook”, writes Moody’s, “reflects … the incremental risks associated with the Hinkley Point C (HPC) nuclear power station project in the UK, should it go ahead.”

“The outlook could be returned to stable provided that (1) EDF decides not to proceed with the HPC nuclear project”, the rating report continues, helpfully adding: “The ratings could be downgraded if (1) the HPC project were to go ahead”.

And if you ask me, that gives an unusually clear steer to the company as to how they can please credit markets and cut their borrowing costs – something that’s actually very important for a company quite so deeply indebted as EDF.

Also this week: EDF’s projected cost of building Hinkley C just took a £3 billion hike from £18 to £21 billion – though still well short of the £24 billion widely expected elsewhere.

The company also revealed that it expected 115 months (9.5 years) to pass between a final investment decision until the commissioning of the first of the two reactors. In other words, it’s pretty well impossible for it to begin before 2026.

EDF CEO Jean-Bernard Levy also revealed in February that “Definitive construction of what will be built on the site, what we call the first concrete, is on the horizon for 2019” – hardly an indication that action of any kind is imminent.

Areva’s ‘falsified’ safety certificates for nuclear components

And what was it happened last week? Oh yes, it turned out that Areva has been systematically “falsifying” (by the company’s own admission) safety certificates for components it has made for nuclear power stations, with 400 such ‘irregularities’ including to 50 components in operational nuclear reactors.

This is very bad news for EDF not just because the French government is forcing it into a shotgun takeover of what is clearly a company in deep trouble, but because many of these 50 components will be in its own power stations. And if it sues … it will be suing itself.

It also raises serious safety questions over the EPR reactors planned for Hinkley C, and under construction at other sites: Olkiluoto in Finland, Flamanville in France, and Taishan in China – not only for the components whose safety certificates were falsified, but for everything the company has ever produced because of what it reveals about its deeply dysfunctional safety ethic.

The news of the falsified safety certificates may also explain how the reactor vessel and head supplied by Areva at Flamanville went so far as installation at the heart of the plant while suffering from grave metallurgical defects owing to an excess of carbon in areas of the steel, that could lead to embrittlement and cracking of the unit.

This safety problem remains unsolved and in a worst case (for EDF, Areva and French taxpayers) could lead to the power plant’s total abandonment. It is also widely suspected that the two Taishan reactors, also forged by Areva, may suffer from the same defect.

Meanwhile all curent EPR projects are massively over time and budget. Flamanville, begun in 2006, was meant to be complete by 2012, and costs have more than trebled from €3.3 billion to €10.5 billion, with no end in sight.

Construction of the Olkiluoto EPR began in 2005 and it is not expected to commence operating until 2018, nine years late. The estimated cost has risen from €3.2 billion to €8.5 billion. Areva has already provided for a €2.7 billion writedown on the project, with further losses expected. Meanwhile the Finnish utility FTVO and Areva / Siemens are locked in a €10 billion legal battle over the cost overruns.

Which reminds me. Moody’s again: “The A2 rating is based on Moody’s expectation that EDF will have no material exposure to AREVA NP’s liabilities associated with past and existing contracts in its engineering and construction business, including the Olkiluoto 3 nuclear project in Finland.”

Just how they expect to achieve that when EDF is buying the company is hard to understand. That A2 rating could drop even lower.

Those legal cases in the European Court

But that’s not the only legal case that could mess things up for EDF. Austria and Luxembourg have a legal challenge in play against the European Commission for approving an absurdly generous subsidy package for Hinkley C that is set to pay the company almost three times the current wholesale power price for 35 years after it begins to produce power.

A second case was filed in March 2015 by Germany’s Greenpeace Energy and a host of other cooperative and municipal green energy suppliers concerned that the massive subsidy would cause prejudice against renewables in Europe’s energy market.

And last month, new legal risks: UK green electricity supplier Ecotricity and Greenpeace UK are threatening further legal action over the French government’s plan to support EDF’s wobbly finances by taking dividend payments as shares instead of cash, and buying billions of euros worth of additional shares, in order to provide working capital for Hinkley C.

The share purchases actual and proposed, they warn, fall under EU state aid rules and would need to be approved by the Commission before they could go ahead. Any attempt by EDF to sneak a massive share issue out to the French government would be challenged in the courts.

And the simple fact is that state aid is the only way that Hinkley C will ever be built. Private investors won’t touch it with a bargepole, and here’s why. In theory the project offers investors an enviable 9% rate of return. But that’s only if it’s finished on time and on budget. If it’s not, then that number starts falling fast.

The nightmare scenario that’s scaring investors away

But it gets worse. What’s really freaking out investors is the possibility that they could sink all that money into a massive nuclear project that just doesn’t work.

Their return under the ‘contract for difference’ is based entirely on getting that premium rate for their power of approaching £100 per megawatt hour, three times higher than the current wholesale market level. So what if it turns out a lemon?

Now no one expects that it won’t work at all. But what if it keeps on tripping out with mysterious safety alerts generated by all the unbelievably complex software that’s going to run the show? What if it’s unable to pass its commissioning tests as a result? Or what if it’s permanently on the blink and only able to run intermittently?

Then EDF will have turned £21 billion or £24 billion of good money into a massive decommissioning liability. This is the risk that is alarming Moody’s, investors and EDF unions, not to mention the company’s former finance director Thomas Piquemal who resigned in March this year fearing that Hinkley C could just finish EDF off.

And it could happen: at today’s €11.33 share price, EDF is valued at €21.76 billion, or £17.1 billion – considerably less than even the lowest estimates of the Hinkley C project cost.

So what are EDF’s options here? One is to abandon the project in the process writing off the £2 billion it has so far invested in the project, as Moody’s, unions and equity investors hope. Another is to sell the site on to the Chinese General Nuclear Company (CGN) which is poised to take a 33.5% stake in the project in a deal announced last October.

But now even that last possiblity looks like it’s off the cards – perhaps as a result of the British Queen’s unguarded comment at a Buckingham Palace garden party last week that the Chinese delegation to London last October had been “very rude”. And yes, that was the official visit on which CGN’s investment in Hinkley C was wrapped up.

But whatever the reason, CGN has today stated that reports that China was planning to take over the Hinkley C site in the event that EDF backs out were “without foundation”. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”

In other news, Germany’s energy minister Sigmar Gabriel has just announced plans to invest €17 billion over five years in energy efficient technologies as part of an ‘Effizienzoffensive’ campaign aiming to halve the country’s energy consumption by 2050. That’s under a quarter of the UK’s estimated cost of supporting Hinkley C. Could Gabriel possibly know something we don’t?

But back to Hinkley C: how much longer can the tragicomedy go on before the it’s finally booed off the stage? It really last much longer now.

Oliver Tickell is Contributing Editor at The Ecologist.

The remarkable thing about the ongoing Hinkley C fiasco is just how long it’s going on – and how one disaster piles onto another without the project ever quite dying – so far at least.

Today’s news? Moody’s credit rating agency has just downgraded EDF’s debt from A1 to ‘A2 outlook negative’. OK, that’s still not junk grade – after all the company has the French government standing behind it as 85% owner.

But the A2 negative rating will make it all the harder and more expensive for it to raise the cash it needs – not just to build Hinkley C but to finance its forced €2.5 billion takeover of insolvent nuclear components manufacturer Areva, make good its problems, finance the impending closure and docommissioning of its own aging nuclear fleet … you get the picture.

And Hinkley C is an important cause of EDF’s sinking down the credit rating charts. “The negative outlook”, writes Moody’s, “reflects … the incremental risks associated with the Hinkley Point C (HPC) nuclear power station project in the UK, should it go ahead.”

“The outlook could be returned to stable provided that (1) EDF decides not to proceed with the HPC nuclear project”, the rating report continues, helpfully adding: “The ratings could be downgraded if (1) the HPC project were to go ahead”.

And if you ask me, that gives an unusually clear steer to the company as to how they can please credit markets and cut their borrowing costs – something that’s actually very important for a company quite so deeply indebted as EDF.

Also this week: EDF’s projected cost of building Hinkley C just took a £3 billion hike from £18 to £21 billion – though still well short of the £24 billion widely expected elsewhere.

The company also revealed that it expected 115 months (9.5 years) to pass between a final investment decision until the commissioning of the first of the two reactors. In other words, it’s pretty well impossible for it to begin before 2026.

EDF CEO Jean-Bernard Levy also revealed in February that “Definitive construction of what will be built on the site, what we call the first concrete, is on the horizon for 2019” – hardly an indication that action of any kind is imminent.

Areva’s ‘falsified’ safety certificates for nuclear components

And what was it happened last week? Oh yes, it turned out that Areva has been systematically “falsifying” (by the company’s own admission) safety certificates for components it has made for nuclear power stations, with 400 such ‘irregularities’ including to 50 components in operational nuclear reactors.

This is very bad news for EDF not just because the French government is forcing it into a shotgun takeover of what is clearly a company in deep trouble, but because many of these 50 components will be in its own power stations. And if it sues … it will be suing itself.

It also raises serious safety questions over the EPR reactors planned for Hinkley C, and under construction at other sites: Olkiluoto in Finland, Flamanville in France, and Taishan in China – not only for the components whose safety certificates were falsified, but for everything the company has ever produced because of what it reveals about its deeply dysfunctional safety ethic.

The news of the falsified safety certificates may also explain how the reactor vessel and head supplied by Areva at Flamanville went so far as installation at the heart of the plant while suffering from grave metallurgical defects owing to an excess of carbon in areas of the steel, that could lead to embrittlement and cracking of the unit.

This safety problem remains unsolved and in a worst case (for EDF, Areva and French taxpayers) could lead to the power plant’s total abandonment. It is also widely suspected that the two Taishan reactors, also forged by Areva, may suffer from the same defect.

Meanwhile all curent EPR projects are massively over time and budget. Flamanville, begun in 2006, was meant to be complete by 2012, and costs have more than trebled from €3.3 billion to €10.5 billion, with no end in sight.

Construction of the Olkiluoto EPR began in 2005 and it is not expected to commence operating until 2018, nine years late. The estimated cost has risen from €3.2 billion to €8.5 billion. Areva has already provided for a €2.7 billion writedown on the project, with further losses expected. Meanwhile the Finnish utility FTVO and Areva / Siemens are locked in a €10 billion legal battle over the cost overruns.

Which reminds me. Moody’s again: “The A2 rating is based on Moody’s expectation that EDF will have no material exposure to AREVA NP’s liabilities associated with past and existing contracts in its engineering and construction business, including the Olkiluoto 3 nuclear project in Finland.”

Just how they expect to achieve that when EDF is buying the company is hard to understand. That A2 rating could drop even lower.

Those legal cases in the European Court

But that’s not the only legal case that could mess things up for EDF. Austria and Luxembourg have a legal challenge in play against the European Commission for approving an absurdly generous subsidy package for Hinkley C that is set to pay the company almost three times the current wholesale power price for 35 years after it begins to produce power.

A second case was filed in March 2015 by Germany’s Greenpeace Energy and a host of other cooperative and municipal green energy suppliers concerned that the massive subsidy would cause prejudice against renewables in Europe’s energy market.

And last month, new legal risks: UK green electricity supplier Ecotricity and Greenpeace UK are threatening further legal action over the French government’s plan to support EDF’s wobbly finances by taking dividend payments as shares instead of cash, and buying billions of euros worth of additional shares, in order to provide working capital for Hinkley C.

The share purchases actual and proposed, they warn, fall under EU state aid rules and would need to be approved by the Commission before they could go ahead. Any attempt by EDF to sneak a massive share issue out to the French government would be challenged in the courts.

And the simple fact is that state aid is the only way that Hinkley C will ever be built. Private investors won’t touch it with a bargepole, and here’s why. In theory the project offers investors an enviable 9% rate of return. But that’s only if it’s finished on time and on budget. If it’s not, then that number starts falling fast.

The nightmare scenario that’s scaring investors away

But it gets worse. What’s really freaking out investors is the possibility that they could sink all that money into a massive nuclear project that just doesn’t work.

Their return under the ‘contract for difference’ is based entirely on getting that premium rate for their power of approaching £100 per megawatt hour, three times higher than the current wholesale market level. So what if it turns out a lemon?

Now no one expects that it won’t work at all. But what if it keeps on tripping out with mysterious safety alerts generated by all the unbelievably complex software that’s going to run the show? What if it’s unable to pass its commissioning tests as a result? Or what if it’s permanently on the blink and only able to run intermittently?

Then EDF will have turned £21 billion or £24 billion of good money into a massive decommissioning liability. This is the risk that is alarming Moody’s, investors and EDF unions, not to mention the company’s former finance director Thomas Piquemal who resigned in March this year fearing that Hinkley C could just finish EDF off.

And it could happen: at today’s €11.33 share price, EDF is valued at €21.76 billion, or £17.1 billion – considerably less than even the lowest estimates of the Hinkley C project cost.

So what are EDF’s options here? One is to abandon the project in the process writing off the £2 billion it has so far invested in the project, as Moody’s, unions and equity investors hope. Another is to sell the site on to the Chinese General Nuclear Company (CGN) which is poised to take a 33.5% stake in the project in a deal announced last October.

But now even that last possiblity looks like it’s off the cards – perhaps as a result of the British Queen’s unguarded comment at a Buckingham Palace garden party last week that the Chinese delegation to London last October had been “very rude”. And yes, that was the official visit on which CGN’s investment in Hinkley C was wrapped up.

But whatever the reason, CGN has today stated that reports that China was planning to take over the Hinkley C site in the event that EDF backs out were “without foundation”. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”

In other news, Germany’s energy minister Sigmar Gabriel has just announced plans to invest €17 billion over five years in energy efficient technologies as part of an ‘Effizienzoffensive’ campaign aiming to halve the country’s energy consumption by 2050. That’s under a quarter of the UK’s estimated cost of supporting Hinkley C. Could Gabriel possibly know something we don’t?

But back to Hinkley C: how much longer can the tragicomedy go on before the it’s finally booed off the stage? It really last much longer now.

Oliver Tickell is Contributing Editor at The Ecologist.

The remarkable thing about the ongoing Hinkley C fiasco is just how long it’s going on – and how one disaster piles onto another without the project ever quite dying – so far at least.

Today’s news? Moody’s credit rating agency has just downgraded EDF’s debt from A1 to ‘A2 outlook negative’. OK, that’s still not junk grade – after all the company has the French government standing behind it as 85% owner.

But the A2 negative rating will make it all the harder and more expensive for it to raise the cash it needs – not just to build Hinkley C but to finance its forced €2.5 billion takeover of insolvent nuclear components manufacturer Areva, make good its problems, finance the impending closure and docommissioning of its own aging nuclear fleet … you get the picture.

And Hinkley C is an important cause of EDF’s sinking down the credit rating charts. “The negative outlook”, writes Moody’s, “reflects … the incremental risks associated with the Hinkley Point C (HPC) nuclear power station project in the UK, should it go ahead.”

“The outlook could be returned to stable provided that (1) EDF decides not to proceed with the HPC nuclear project”, the rating report continues, helpfully adding: “The ratings could be downgraded if (1) the HPC project were to go ahead”.

And if you ask me, that gives an unusually clear steer to the company as to how they can please credit markets and cut their borrowing costs – something that’s actually very important for a company quite so deeply indebted as EDF.

Also this week: EDF’s projected cost of building Hinkley C just took a £3 billion hike from £18 to £21 billion – though still well short of the £24 billion widely expected elsewhere.

The company also revealed that it expected 115 months (9.5 years) to pass between a final investment decision until the commissioning of the first of the two reactors. In other words, it’s pretty well impossible for it to begin before 2026.

EDF CEO Jean-Bernard Levy also revealed in February that “Definitive construction of what will be built on the site, what we call the first concrete, is on the horizon for 2019” – hardly an indication that action of any kind is imminent.

Areva’s ‘falsified’ safety certificates for nuclear components

And what was it happened last week? Oh yes, it turned out that Areva has been systematically “falsifying” (by the company’s own admission) safety certificates for components it has made for nuclear power stations, with 400 such ‘irregularities’ including to 50 components in operational nuclear reactors.

This is very bad news for EDF not just because the French government is forcing it into a shotgun takeover of what is clearly a company in deep trouble, but because many of these 50 components will be in its own power stations. And if it sues … it will be suing itself.

It also raises serious safety questions over the EPR reactors planned for Hinkley C, and under construction at other sites: Olkiluoto in Finland, Flamanville in France, and Taishan in China – not only for the components whose safety certificates were falsified, but for everything the company has ever produced because of what it reveals about its deeply dysfunctional safety ethic.

The news of the falsified safety certificates may also explain how the reactor vessel and head supplied by Areva at Flamanville went so far as installation at the heart of the plant while suffering from grave metallurgical defects owing to an excess of carbon in areas of the steel, that could lead to embrittlement and cracking of the unit.

This safety problem remains unsolved and in a worst case (for EDF, Areva and French taxpayers) could lead to the power plant’s total abandonment. It is also widely suspected that the two Taishan reactors, also forged by Areva, may suffer from the same defect.

Meanwhile all curent EPR projects are massively over time and budget. Flamanville, begun in 2006, was meant to be complete by 2012, and costs have more than trebled from €3.3 billion to €10.5 billion, with no end in sight.

Construction of the Olkiluoto EPR began in 2005 and it is not expected to commence operating until 2018, nine years late. The estimated cost has risen from €3.2 billion to €8.5 billion. Areva has already provided for a €2.7 billion writedown on the project, with further losses expected. Meanwhile the Finnish utility FTVO and Areva / Siemens are locked in a €10 billion legal battle over the cost overruns.

Which reminds me. Moody’s again: “The A2 rating is based on Moody’s expectation that EDF will have no material exposure to AREVA NP’s liabilities associated with past and existing contracts in its engineering and construction business, including the Olkiluoto 3 nuclear project in Finland.”

Just how they expect to achieve that when EDF is buying the company is hard to understand. That A2 rating could drop even lower.

Those legal cases in the European Court

But that’s not the only legal case that could mess things up for EDF. Austria and Luxembourg have a legal challenge in play against the European Commission for approving an absurdly generous subsidy package for Hinkley C that is set to pay the company almost three times the current wholesale power price for 35 years after it begins to produce power.

A second case was filed in March 2015 by Germany’s Greenpeace Energy and a host of other cooperative and municipal green energy suppliers concerned that the massive subsidy would cause prejudice against renewables in Europe’s energy market.

And last month, new legal risks: UK green electricity supplier Ecotricity and Greenpeace UK are threatening further legal action over the French government’s plan to support EDF’s wobbly finances by taking dividend payments as shares instead of cash, and buying billions of euros worth of additional shares, in order to provide working capital for Hinkley C.

The share purchases actual and proposed, they warn, fall under EU state aid rules and would need to be approved by the Commission before they could go ahead. Any attempt by EDF to sneak a massive share issue out to the French government would be challenged in the courts.

And the simple fact is that state aid is the only way that Hinkley C will ever be built. Private investors won’t touch it with a bargepole, and here’s why. In theory the project offers investors an enviable 9% rate of return. But that’s only if it’s finished on time and on budget. If it’s not, then that number starts falling fast.

The nightmare scenario that’s scaring investors away

But it gets worse. What’s really freaking out investors is the possibility that they could sink all that money into a massive nuclear project that just doesn’t work.

Their return under the ‘contract for difference’ is based entirely on getting that premium rate for their power of approaching £100 per megawatt hour, three times higher than the current wholesale market level. So what if it turns out a lemon?

Now no one expects that it won’t work at all. But what if it keeps on tripping out with mysterious safety alerts generated by all the unbelievably complex software that’s going to run the show? What if it’s unable to pass its commissioning tests as a result? Or what if it’s permanently on the blink and only able to run intermittently?

Then EDF will have turned £21 billion or £24 billion of good money into a massive decommissioning liability. This is the risk that is alarming Moody’s, investors and EDF unions, not to mention the company’s former finance director Thomas Piquemal who resigned in March this year fearing that Hinkley C could just finish EDF off.

And it could happen: at today’s €11.33 share price, EDF is valued at €21.76 billion, or £17.1 billion – considerably less than even the lowest estimates of the Hinkley C project cost.

So what are EDF’s options here? One is to abandon the project in the process writing off the £2 billion it has so far invested in the project, as Moody’s, unions and equity investors hope. Another is to sell the site on to the Chinese General Nuclear Company (CGN) which is poised to take a 33.5% stake in the project in a deal announced last October.

But now even that last possiblity looks like it’s off the cards – perhaps as a result of the British Queen’s unguarded comment at a Buckingham Palace garden party last week that the Chinese delegation to London last October had been “very rude”. And yes, that was the official visit on which CGN’s investment in Hinkley C was wrapped up.

But whatever the reason, CGN has today stated that reports that China was planning to take over the Hinkley C site in the event that EDF backs out were “without foundation”. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”

In other news, Germany’s energy minister Sigmar Gabriel has just announced plans to invest €17 billion over five years in energy efficient technologies as part of an ‘Effizienzoffensive’ campaign aiming to halve the country’s energy consumption by 2050. That’s under a quarter of the UK’s estimated cost of supporting Hinkley C. Could Gabriel possibly know something we don’t?

But back to Hinkley C: how much longer can the tragicomedy go on before the it’s finally booed off the stage? It really last much longer now.

Oliver Tickell is Contributing Editor at The Ecologist.

The remarkable thing about the ongoing Hinkley C fiasco is just how long it’s going on – and how one disaster piles onto another without the project ever quite dying – so far at least.

Today’s news? Moody’s credit rating agency has just downgraded EDF’s debt from A1 to ‘A2 outlook negative’. OK, that’s still not junk grade – after the company has the French government standing behind it as 85% owner.

But the A2 negative rating will make it all the harder and more expensive for it to raise the cash it needs – not just to build Hinkley C but to finance its forced €2.5 billion takeover of insolvent nuclear components manufacturer Areva, make good its problems, finance the impending closure and docommissioning of its own aging nuclear fleet … you get the picture.

And Hinkley C is an important cause of EDF’s sinking down the credit rating charts. “The negative outlook”, writes Moody’s, “reflects … the incremental risks associated with the Hinkley Point C (HPC) nuclear power station project in the UK, should it go ahead.”

“The outlook could be returned to stable provided that (1) EDF decides not to proceed with the HPC nuclear project”, the rating report continues, helpfully adding: “The ratings could be downgraded if (1) the HPC project were to go ahead”.

And if you ask me, that gives an unusually clear steer to the company as to how they can please credit markets and cut their borrowing costs – something that’s actually very important for a company quite so deeply indebted as EDF.

Also this week: EDF’s projected cost of building Hinkley C just took a £3 billion hike from £18 to £21 billion – though still well short of the £24 billion widely expected elsewhere.

The company also revealed that it expected 115 months (9.5 years) to pass between a final investment decision until the commissioning of the first of the two reactors. In other words, it’s pretty well impossible for it to begin before 2026.

EDF CEO Jean-Bernard Levy also revealed in February that “Definitive construction of what will be built on the site, what we call the first concrete, is on the horizon for 2019” – hardly an indication that action of any kind is imminent.

Areva’s ‘falsified’ safety certificates for nuclear components

And what was it happened last week? Oh yes, it turned out that Areva has been systematically “falsifying” (by the company’s own admission) safety certificates for components it has made for nuclear power stations, with 400 such ‘irregularities’ including to 50 components in operational nuclear reactors.

This is very bad news for EDF not just because the because the French government is forcing it into a shotgun takeover of the company, but because many of these 50 components will be in its own power stations. And if it sues … it will be suing itself.

It also raises serious safety questions over the EPR reactors planned for Hinkley C, and under construction at other sites: Olkiluoto in Finland, Flamanville in France, and Taishan in China – not only for the components whose safety certificates were falsified, but for everything the company has ever produced because of what it reveals about its deeply dysfunctional safety ethic.

The news of the falsified safety certificates may also explain how the reactor vessel and head supplied by Areva at Flamanville went so far as installation at the heart of the plant while suffering from grave metallurgical defects owing to an excess of carbon in areas of the steel, that could lead to embrittlement and cracking of the unit.

This safety problem remains unsolved and in a worst case (for EDF, Areva and French taxpayers) could lead to the power plant’s total abandonment. It is also widely suspected that the two Taishan reactors, also forged by Areva, may suffer from the same defect.

Meanwhile all curent EPR projects are massively over time and budget. Flamanville, begun in 2006, was meant to be complete by 2012, and costs have more than trebled from €3.3 billion to €10.5 billion, with no end in sight.

Construction of the Olkiluoto EPR began in 2005 and it is not expected to commence operating until 2018, nine years late. The estimated cost has risen from €3.2 billion to €8.5 billion. Areva has already provided for a €2.7 billion writedown on the project, with further losses expected. Meanwhile the Finnish utility FTVO and Areva / Siemens are locked in a €10 billion legal battle over the cost overruns.

Which reminds me. Moody’s again: “The A2 rating is based on Moody’s expectation that EDF will have no material exposure to AREVA NP’s liabilities associated with past and existing contracts in its engineering and construction business, including the Olkiluoto 3 nuclear project in Finland.”

Just how they expect to achieve that when EDF is buying the company is hard to understand. That A2 rating could drop even lower.

Those legal cases in the European Court

But that’s not the only legal case that could mess things up for EDF. Austria and Luxembourg have a legal challenge in play against the European Commission for approving an absurdly generous subsidy package for Hinkley C that is set to pay the company almost three times the current wholesale power price for 35 years after it begins to produce power.

A second case was filed in March 2015 by Germany’s Greenpeace Energy and a host of other cooperative and municipal green energy suppliers concerned that the massive subsidy would cause prejudice against renewables in Europe’s energy market.

And last month, new legal risks: UK green electricity supplier Ecotricity and Greenpeace UK are threatening further legal action over the French government’s plan to support EDF’s wobbly finances by taking dividend payments as shares instead of cash, and buying billions of euros worth of additional shares, in order to provide working capital for Hinkley C.

The share purchases actual and proposed, they warn, fall under EU state aid rules and would need to be approved by the Commission before they could go ahead. Any attempt by EDF to sneak a massive share issue out to the French government would be challenged in the courts.

And the simple fact is that state aid is the only way that Hinkley C will ever be built. Private investors won’t touch it with a bargepole, and here’s why. In theory the project offers investors an enviable 9% rate of return. But that’s only if it’s finished on time and on budget. If it’s not, then that number starts falling fast.

The nightmare scenario that’s scaring investors away

But it gets worse. What’s really freaking out investors is the possibility that they could sink all that money into a massive nuclear project that just doesn’t work.

Their return under the ‘contract for difference’ is based entirely on getting that premium rate for their power of approaching £100 per megawatt hour, three times higher than the current wholesale market level. So what if it turns out a lemon?

Now no one expects that it won’t work at all. But what if it keeps on tripping out with mysterious safety alerts generated by all the unbelievably complex software that’s going to run the show? What if it’s unable to pass its commissioning tests as a result? Or what if it’s permanently on the blink and only able to run intermittently?

Then EDF will have turned £21 billion or £24 billion of good money into a massive decommissioning liability. This is the risk that is alarming Moody’s, investors and EDF unions, not to mention the company’s former finance director Thomas Piquemal who resigned in March this year fearing that Hinkley C could just finish EDF off.

And it could happen: at today’s €11.33 share price, EDF is valued at €21.76 billion, or £17.1 billion – considerably less than even the lowest estimates of the Hinkley C project cost.

So what are EDF’s options here? One is to abandon the project in the process writing off the £2 billion it has so far invested in the project, as Moody’s, unions and equity investors hope. Another is to sell the site on to the Chinese General Nuclear Company (CGN) which is poised to take a 33.5% stake in the project in a deal announced last February.

But now even that last possiblity looks like it’s off the cards – perhaps as a result of the British Queen’s unguarded comment at a Buckingham Palace garden party last week that the Chinese delegation to London last October had been “very rude”. And yes, that was the official visit on which CGN’s investment in Hinkley C was wrapped up.

But whatever the reason, CGN has today stated that reports that China was planning to take over the Hinkley C site in the event that EDF backs out were “without foundation”. A CGN spokesman said: “China General Nuclear Power Corporation has no plans to build nuclear reactors at Hinkley Point C. Our intention is to obtain regulatory approval to build our reactor design at Bradwell in Essex.”

But back to the key question: how much longer can the Hinkley C tragicomedy go on before the it’s finally booed off the stage? It really can’t go on much longer now.

Oliver Tickell is Contributing Editor at The Ecologist.

Taking advantage of Brazil’s present political turbulence, as the battle to impeach President Dilma Rousseff reaches its climax, reactionary politicians are quietly rolling back environmental and indigenous protection laws in defiance of the country’s commitments under the Paris Agreement.

Environmentalists say that if the bill known as PEC 65/2012, now at the Senate committee stage, is approved, it means that major infrastructure projects will be able to go ahead regardless of their impacts on biodiversity, indigenous areas, traditional communities and conservation areas.

Instead of a careful if somewhat slow licensing process which involves scientific assessments including biological, botanical, anthropological and archaeological studies, developers will merely have to present a proposed study of environmental impact to be allowed to begin – without actually having to carry out the study.

And once a project is under way it cannot be cancelled or suspended by the environmental protection agencies.

A chorus of protest – but who’s listening?

Environment organisations, both governmental and non-governmental, have protested strongly at the bill’s implications. For Marilene Ramos, the president of the official agency for the environment and renewable resources, IBAMA, (in Portuguese only) it means Brazil is going in the opposite direction to developed countries and will no longer be able to control infrastructure projects.

Indigenous leader Nara Baré, of COIAB – the Coordination of Indian organisations in the Brazilian Amazon – said: “Brazil presented targets in Paris but doesn’t do its homework, protecting the forest and us who live in it.”

Carlos Bocuhy, the president of PROAM, an environmental NGO, says the effect of the bill will be to end environmental licensing: “It is completely absurd; it is as though the act of applying for a driving licence entitled you to drive a lorry.”

The Climate Observatory (in Portuguese only) sees the bill as “a bad joke”, even more so in a country that has just suffered the worst environmental disaster in its history, the bursting of a dam of toxic mud in Minas Gerais state on 5th November last year. The calamity destroyed all animal and plant life and a major river nearby, and could be the world’s worst disaster after Chernobyl.

Greenpeace director Marcio Astrini said of the bill that “if it becomes law, it will act as a factory of tragedies.”

Senators’ enormous personal stakes in environmental destruction

Its author, Senator Acir Gurgacz, has a personal interest: his family owns a transport company which would benefit hugely from the paving of the 900 km BR319 highway, linking two Amazon capitals, Porto Velho and Manaus.

At present the project cannot go ahead because IBAMA has embargoed the work, alleging environmental damage. The road runs through conservation areas, indigenous lands and areas of largely unspoiled rainforest.

The bill’s rapporteur is Senator Blairo Maggi, a soya magnate, who has cleared thousands of hectares of rainforest in his home state of Mato Grosso, and is tipped to be the minister of agriculture in the new government that will take over once President Rousseff is suspended from office this week.

Environmentalists are already expressing deep concern about the government planned by vice-president Michel Temer, who will become Brazil’s president today, 12th May, if the impeachment goes through. They note that his policy paper, A bridge to the future, which laid out his plans for government, made no mention of the environment, climate change or the Amazon rainforest.

Instead the big farmers’ and ranchers’ lobby, FPA, or Parliamentary Farming Front, presented the president-to-be with a ‘positive agenda’: a list of demands which included the abolition of the ministry of land reform, the halting and revision of the demarcations of indigenous reserves and quilombos (territories inhabited by the descendants of runaway slaves), and more funds for agribusiness, which already enjoys substantial subsidies.

Besides the bill to end environmental licensing, other damaging bills are in the pipeline.

Ignoring local wishes

One, known as PEC 215, has been doing the rounds in Congress for over 15 years, but with the imminent arrival of the new, pro-farmer government it is expected soon to be voted into law. If it is, it will mean that the power to decide further demarcations of indigenous areas – nearly 400 are under consideration – will pass from the executive to the Congress.

With both houses dominated by members of the rural lobby, this is regarded as tantamount to ending demarcations. Another 1,611 quilombo areas will also be affected. The importance of the indigenous and quilombo territories is that they tend to conserve forested areas, instead of clearing them for mechanised agriculture or cattle grazing.

By law certain areas contained within each rural property (which, especially in the Amazon, are often vast) must be left wild. But another measure on the table (bill 4508/16) will allow them to be used for cattle grazing.

Others will permit mining and hydroelectric dams in indigenous areas without any need for permission from their inhabitants. Reducing controls on pesticides – Brazil is the world’s biggest consumer – is yet another target.

The government of Dilma Rousseff has in no way been a model of protection for the environment and indigenous areas, but it seems that the government of Michel Temer could be much worse.

Jan Rocha is a freelance journalist living in Brazil and is a former correspondent there for the BBC World Service and The Guardian. She now writes for Climate News Network where this article was originally published (CC BY-ND).

A jewel in South Africa’s ecological crown, the Wild Coast stretches along the nation’s Eastern Cape from the Mtamvuna River in the north to the Great Kei River in the south.

The region is one of South Africa’s last remaining wildernesses, a land of jagged coastline, sandy bays and ancient forests. It is also the ancestral home of the indigenous Xhosa people.

Famous for its natural beauty, tourism and being the birthplace of Nelson Mandela, today the Wild Coast’s reputation is being darkened by the violence associated with mining operations seeking to exploit its rolling dunes.

Since the mid-2000s, Australian mining company Mineral Commodities Limited (MRC) and subsidiary Transworld Energy and Mineral Resources (TEM) have been attempting to mine thousands of tonnes of Ilmenite, Rutile and Zircon from the Wild Coast’s metal-rich sands along a 22-kilometre strip of northern Pondoland, known as Xolobeni.

Standing in the way of MRC’s plans are the indigenous Amadiba community, the majority of whom are vociferously opposed to the mine.

Resistance

Despite MRC’s best-laid plans, active operations at the area earmarked for mining are yet to start due to sustained resistance from the Amadiba community.

Over the past decade, self-organised mass mobilisations of hundreds of Amadiba community members have physically blocked MRC’s attempts to drill in Xolobeni. Local people have also taken their protests to government level, stating in no uncertain terms that MRC does not have their Free Prior and Informed Consent to mine anywhere in their ancestral territory.

Sinegugu Zukulu, a Wild Coast resident and Director of local non-profit organisation Sustaining the Wild Coast, says the majority of the Amadiba community oppose MRC’s proposed mine because of the impacts it will have on the livelihoods and environment in the area.

“People see the mine as threatening their land security”, he says. “It will take away grazing and cropland away from the community, it will take away fishing rights from estuaries, it will take away access to other resources harvested from estuaries due to pollution created by dust from the mine. Mining will disturb hundreds of ancestral graves in the land earmarked for mining and sacred sites on the targeted land are to be destroyed.”

Zukulu’s concerns are backed up by a 2014 report from South Africa’s Eastern Cape Department of Economic Development, Environmental Affairs and Tourism. This found that “surrounding communities are unanimous in their opposition to the mine as it would require moving communities away from the area, destroying their livelihoods in the process, and potentially causing irreparable damage to the surrounding environment.”

However, the prospect of these damages has not convinced everyone to oppose the mine. Whilst the majority’s resistance has been successful in blocking the progress of the Xolobeni project, their efforts to protect land and life have exposed them to harassment, threats, physical assault and murder.

Divide and conquer

According to Ryley Grunenwald, director of The Shore Break, a film that explores the struggle over the Amadiba community’s future, says MRC’s presence in the area has caused deep and increasingly violent social division between the small minority who support the mine and the majority who do not:

“MRC’s local partners, XOLCO, are a minority group who will benefit from the mining and are hell bent to override the majority, who call XOLCO ‘the crooks of the village’. For more than a year there have been violent attacks, night raids and assaults on anti-mining community members.”

XOLCO, which stands for the Xolobeni empowerment company, is one of two community empowerment groups set up by MRC in the Xolobeni area. The other, Blue Bantry, has a 50% shareholding in Mineral Sands Resources (Pty) Ltd, which owns the Tormin Mineral Sands project in the Western Cape, and therefore benefits from MRC’s operations.

Zukulu says MRC has intentionally divided the community, targeting leaders in an attempt to weaken community resistance to the mine: “The mining company has co-opted a traditional leader- our Chief – and as a result he may now not resolve the conflict as he is an applicant as well.”

Chief Lunga Baleni, who MRC claims to have consulted over permission to mine in Xolobeni, a traditional leader of the Amadiba People, is a director of XOLCO. Both Baleni and Zamile Qunya, an MRC employee and director of Blue Bantry, are reported to have helped bail out individuals who have attacked anti-mining members of the Amadiba community and to have taken part in attacks themselves.

Since MRC’s arrival on the Wild Coast, opponents of the mine say such attacks have taken four lives and that many others have been injured, creating a climate of fear in the area.

“People are now leaving in fear of being attacked. We have had babies being born in the bush as people sleep there in fear of being attacked”, says Zukulu.

Video: The Shore Break documentary trailer (May 2015) from Ryley Grunenwald on Vimeo.

‘You cannot have development without blood’

In what campaigners say is an escalation of the violence facing mining opponents on the Wild Coast, on the 22nd March 2016 Sikosiphi ‘Bazooka’ Radebe was shot in the head eight times and killed in front of his young son.

Up until his death, Mr Radebe was Chairman of the Amadiba Crisis Committee (ACC), a group formed in 2007 to oppose MRC’s Xolobeni project and claim the environmental rights of the Amadiba community.

Hours before his death, Radebe called fellow ACC member Nonhle Mbuthumba to check on her safety. He told her that he had heard about a ‘hit-list’ that included his name, hers and that of another ACC member, Mzamo Dlamini.

The perpetrators of Radebe’s murder, who posed as police officers on their approach to his home, remain at large.

In a statement released after Radebe’s death, MRC denied any responsibility for violence against opponents of its operations. Despite the testimony of local people and findings by the Department of Economic Development, Environmental Affairs and Tourism this statement also dismissed claims that the majority of local people are opposed to the Xolobeni mine.

MRC has consistently denied playing any role in the conflict that has occurred since by its arrival on the Wild Coast and insists it does not support violence. However, the company has been heavily criticised over its engagement with local communities and for comments made by company employees that have been interpreted as condoning violence against mining opponents at two of its South African mines.

In an email sent to local stakeholder’s at the company’s Tormin mine on South Africa’s Western Cape and obtained by South Africa’s Sunday Times, MRC’s Executive Chairman Mark Caruso is reported to have threatened to “rain down vengeance” on those who opposed the mine:

“From time to time I have sought the Bible for understanding and perhaps I can direct you to Ezekiel 25.17. ‘And I will strike down upon thee with great vengeance and furious anger, those who attempt to poison and destroy my brothers. And you will know my name is the Lord when I lay my vengeance upon thee’.”

In relation to the Xolobeni project, The Bench Marks Foundation that Mark Caruso’s younger brother and business partner, Patrick, has made similarly disturbing comments.

The group write that at a 2007 community meeting following the murder of community activist Scorpion Dimane, Patrick Caruso responded to the bloodshed that had occurred since MRC’s arrival by saying:

“Well, there is always blood where there are these types of projects … in my experience you cannot have development without blood.”

Protests, petitions and British billionaires

The murder of Bazooka Radebe has intensified international advocacy efforts in support of the Amadiba Crisis Committee in recent weeks, with campaigners exposing and applying pressure to MRC’s connections to the UK and Australia.

In London campaigners from several UK-based organisations gathered on the 5th May to call on British property magnate and mining investor Graham Edwards to help put a stop to violence and killings associated with MRC’s Xolobeni mine.

Leaflets handed out to passers by campaigners highlighted the fact that, as the sole owner and director of AU Mining Limited, Edwards – who doubles as chief executive of UK property giant Telereal Trillium – holds 96 million shares in MRC, amounting to an estimated 23.6% of the company.

Protestors dropped a banner proclaiming “No Mining Amadibaland” from a walkway, read statements from Amadiba community leaders and filmed messages of solidarity outside the central London offices of Edwards’ investment firm Telereal Trillium.

Ahead of MRC’s Annual General Meeting in Australia on 25th of May, the campaigners urged Mr Edwards to listen to the wishes of the majority of the Amadiba community and use his influence within MRC to encourage the company to abandon its conflict-ridden interest in Xolobeni.

Speaking at the protest, Dr Andrew Higginbottom said that if Edwards’ fails to influence MRC to abandon Xolobeni, he should divest and save his reputation from being sullied by association with MRC:

“MRC should respect the wishes of the Amadiba community and walk away. Edwards and his family are the beneficiaries of this mining … he has a moral responsibiilty for MRC’s conduct.”

Last September Edwards (or by another account his wife barrister Georgina Black) bought a luxury property on Sydney’s prestigious Rose Bay waterfront, ‘Indah’, for a reported AU$27 million (see photo).

Another future for Amadibaland

As well as bearing witness to the pain and anger of the Amadiba Community in central London last week, protestors carried with them the hopes of the Amadiba People. These were most succinctly summed up by a placard that read “Graham Edwards, MRC, Hands-Off. Xolobeni is for Farming and Tourism”.

Those who oppose the mine, like the members of the ACC, have an alternative vision for the future of their community, based on sustainable eco-tourism and traditional small-scale agriculture, says Sandy Heather of non-profit organization Sustaining the Wild Coast

“Small-scale community-based eco-tourism and related livelihoods projects – village-based accommodation, hiking trails, school leadership trails- have the potential to provide decent work for approximately 200 people indefinitely whilst respecting ecological integrity”, says Heather.

“The mining will provide approximately 150 low level jobs, which may still be an overstatement, for 22 years, whilst destroying the entire ecological integrity of the area as well as the social, cultural and livelihood fabric.”

Nonhle Mbuthumba, a forthright member of the ACC, is confident that those who oppose MRC’s mine will be victorious. In a statement of solidarity sent to campaigners in London, she wrote:

“There will be no mining on the Wild Coast. There will be life, there will be peace and there will be development supported by the people.”

Action: Protest at MRC’s annual shareholders meeting in Subiaco, Western Australia, on 25th May 2016.

Hal Rhoades is Communications and Advocacy Officer at The Gaia Foundation which is working with communities resisting unwanted mining operations in KwaZulu Natal and worldwide. He is also a regular contributor to Intercontinental Cry.

Sign the AVAAZ petition to ask Graham Edwards to divest from MRC.

Watch The Shore Break, Ryley Grunenwald’s film documenting the struggle over the future of the Amadiba community and South Africa’s Wild Coast.