Friday, February 25, 2005

Nuclear Power? No thanks!

There is an innovative, and some might say, elliptical, suggestion that French chemicals companies might like to invest in a new Nuclear power station to help them to avoid the difficulties of high energy prices.

Needless to say the idea appears to come from politicians. Not from people on the ground. France definitely dragged its feet on the road to energy de-regulation. The system adopted, according to a source in Paris is that companies can either subscribe to the spot market or have longer term contacts. Our source says there is no middle way to have their energy delivered under a range of different agreements. Were we being cynical we might think the system was designed to fail.

Energy prices in France have not reached levels that are beyond the range you would expect for Europe. But the question must be: are consumers being gouged by a government that invested heavily in nuclear power? Nuclear power which cost the same amount to produce and transmit at any time of the day or night. Nuclear power which can generate for long periods of time on a single charge of radioactive material.

But something funny has been happening with prices, it seems that French Nuclear power suppliers have been raising the price of their electricity along the same lines as electricity generated from coal or gas. It also seems to be impossible for companies to build, or commission a third party to build a combined steam-generating gas-powered power station. This is widely done in the UK where the chemicals plant buys the steam for process energy and the power is sold into the National Grid. No, instead companies are being offered the chance to buy into an asset with potentially endless environmental liabilities. Sounds balmy to me and to the French Industrialists I've spoken with.

If the polticians, Economy and Finance minister Hervé Gaymard and Industry minister Patrick Devedjian, are serious about stopping the chemical industry leaving France to pastures both cheaper and greener, then they need to address this. Lets hope they get some sense out of the round table they propose between generators and users in the next few weeks.

The chemical industry could learn from this. Its supplier is pricing on benefit to consumer and the market rather than cost to produce plus a bit.

Pip pip

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