"Quite simply," say’s Smart Commodities Editor Garry White "in the twelve years it will take for this miracle cure to be a viable alternative... we will have spent so much money on one specific stop gap solution it will seem ridiculous... unless of course... you invest in this stop gap solution today - like I have".
Britain is finally getting somewhere with its energy strategy... but unfortunately... it’s too little too late.
Today marks the closing day for bidders to table their offer for a 35% stake in British Energy. French giant EDF (possibly in conjunction with Centrica), Germany’s RWE and Spain’s Iberdrola are all expected to make an offer. It looks likely this will be at a level below the current share price.... so don’t go anywhere near the shares. You are likely to lose money.
According to Charles Stanley, the bids could be between 600p and 700p a share. The share price is now just below 700p, down around 2.5% today.
The reason the bids are assured to be below 700p is due to the nature of British Energy’s nuclear assets. The reactors are old, need replacing and the cost of this is likely to be much higher than expected.
Earlier this week I mentioned that E.On chief executive Dr Wulf Bernotat had said the Government had vastly underestimated the cost of building a new generation of nuclear power plants. (Note E.On has said it will not bid for British Energy, so he wasn’t trying to get the price knocked down.)
Bernotat reckons that that the cost per plant could be as high as 6bn euro, which is double the government’s estimate. It’s going to take a lot of time and money to get the new nuclear power stations up and running.
EDF are a shoe-in... if they don’t win I’ll eat my beret...
Dr Bernotat knows what he is talking about. E.On was recently involved in building a reactor in Finland - and his numbers are based on the cost of this real-life project.
I expect that EDF will eventually win, because of its wide experience of the nuclear industry. France still generates 80% of its electricity from nuclear. The company operates 19 nuclear sites in France, and it has extensive operations across Europe.
The French are, rightly, very confident about their bid. News emerged this morning that the group had bought land near two existing nuclear sites in England and Wales.
The company had acquired land near Wylfa on Anglesey and at Hinckley Point in Somerset.
So, at last we are starting to get our energy policy sorted - but it’s going to be a long and painful process... one that is going to take twelve years to bare fruit...
So what is Britain going to do in the meantime... how are we going to meet our increasing energy demands?
Simple... in my mind there is only one place Britain will turn to.
It’s a complete no-brainer... and I for one would be perfectly prepared to put my own hard earned money where my mouth is... and invest in this company’s stock...
I hope you enjoy the sunshine this weekend
Regards,
Garry White
Editor
Smart Commodities UK
