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by jmyeet
70 days ago
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The UK's grid upgrades are a mix of the shift to renewables but also to handle anticipated increased demand, which will be needed regardless of the electricity source or location. I don't know what the mix is however. > Not true, HPCs 'agreement' is for 35 years. After that they just get the market price, so it is not based on the 60 year lifespan per se. Isn't this conceding the point that costs are going to go way up as HPC ages? Why else would you have a 60 year lifespan on a plan but 35 years of agreed pricing? |
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Obviously there is some investment needed but if you take a look at the capex cost of the north Scottish grid upgrades PLUS the HVDCs it's pretty terrifying.
The idea is that the financing will be "paid off" after 35 years so it doesn't require a "guaranteed" price after that (it reduces finance costs significantly when HMG is underwriting the main payback period. I expect the remaining 25 years will be extraordinarily profitable for EDF. Even if there is more maintenance costs they will have no finance costs. And finance is the main cost of HPC (60-70% goes to interest payments on the debt).