Consciousness of Sheep
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As the “energy death spiral” gathers pace and energy companies struggle to remain profitable, all eyes are on French energy giant and nuclear power provider EDF. The company, which supplies more than 39 million consumers across Europe is teetering on the edge of bankruptcy according to an AlphaValue report for Greenpeace.
According to Paul Brown at Climate News Network:
“While EDF is threatening to sue people who say it is technically bankrupt, the evidence is that the cost of producing electricity from its ageing nuclear reactors is greater than the market price.
“Coupled with the impossibility of EDF paying the full decommissioning costs of its reactors, it is inevitable that it is the taxpayers in France and the UK who will eventually pick up the bill.”
According to Brown, EDF needs a sustained rise in the wholesale price of electricity to avoid making a loss on every kilowatt it sells. Whether the European economies can afford that kind of price rise is a moot point given the impact of economic stagnation of European politics. In any case, beyond the cost of generating electricity:
“Even more money is required to finish new nuclear stations EDF is already committed to building. The first, Flamanville in northern France, is five years late and billions over budget. Questions over the quality of the steel in its reactor are still not resolved, and it may never be fully operational.
“Add to that the need for €12 billion capital to complete the two nuclear stations EDF is committed to building at Hinkley Point in southwest England, and it is hard to see where all the money will come from.”
Even if EDF manages to hang on for now, its precarious financial situation raises a question that has so far only been voiced in relation to the banking sector. Could EDF – along with the other big energy corporations – be too big to fail? And if so, what might we do about it?
The standard response from Europe’s political leaders is that taxpayers will have to stump up the cash to bail out stricken energy companies just as we had to stump up the cash to stave off the collapse of the banks. But that was before Brexit, Trump and the rise of the populist right. The way in which the banks were able to socialise their losses while privatising their gains is symbolic of everything that is wrong with the neoliberal globalist project that the populist movements across the developed states are railing against. It might be that nationalisation – something that is currently illegal in EU law – is the only option that can avoid pushing even more people into supporting the populists. Certainly with key elections coming up in France, Holland and Germany, any mishandling of an energy sector collapse could well be the final nail in coffin for the European project.
