The Nuclear Option

CLAPTON

Wookster wrote: »

IRR would be the net present value of net future cash flows over the investment. I thought it would be a reasonable benchmark, especially for huge infrastructure investments where you (allegedly) have stable and predictable cash flows.

You only have stable and predictable cash flows if the government guarantees them either directly by subsidy through taxation or indirectly by stealth taxes on electricity bills.

Surprisingly the government prefers that later method.

Wookster

CLAPTON wrote: »

You only have stable and predictable cash flows if the government guarantees them either directly by subsidy through taxation or indirectly by stealth taxes on electricity bills.

Surprisingly the government prefers that later method.

Infrastructure projects (eg. airports, utility companies etc) tend to have stable and predictable cashflows (even though they are heavily regulated) compared to other types of businesses. This is why private equity & pension funds find them great investment opportunities.

CLAPTON

Wookster wrote: »

Infrastructure projects (eg. airports, utility companies etc) tend to have stable and predictable cashflows (even though they are heavily regulated) compared to other types of businesses. This is why private equity & pension funds find them great investment opportunities.

Indeed so because they are either directly subsidised by the tax payer and/or and subsidised by government determined stealth tariffs (think green tax, minimum price guarantees etc etc).

Where they have predictable cashflow it is BECAUSE of government regulation and subsidy.

British Energy went bankrupt.

The use of coal, gas, wind, wave power are all predicated on government policy and regulation.

kabayiri

This situation was floated in such creditable publications as Private Eye (!), ever since Hitachi pulled out of negotiations.

I'm not sure why they pulled out though.

purch

kabayiri wrote: »

I'm not sure why they pulled out though.

Most of the locals have 6 fingers. :eek: An unlucky sign in Japan.

Seeing as West Somerset Council (the smallest local authority in England) is effectively bankrupt
this is the worst possible scenario.

If Butlins close down all you will have left are 6 sheep :eek:

Wookster

CLAPTON wrote: »

Where they have predictable cashflow it is BECAUSE of government regulation and subsidy.

Nonsense. It is because humans require utilities. Or perhaps you live in a cave and do not require running water, electricity or gas?

coastline

Contracts for future gas...Statoil currently supply around 25% of all UK gas...16 billion cubic metres which could rise up to 26 billion if the deal goes ahead.

http://www.express.co.uk/finance/city/381529/Norwegian-gas-powers-UK-plans

CLAPTON

Wookster wrote: »

Nonsense. It is because humans require utilities. Or perhaps you live in a cave and do not require running water, electricity or gas?

of course there is an underlying demand for utilities which may make a very good case for public ownership
I also require food and clothing for which I would make a poorer case for public ownership

why did british energy go bankrupt?

why do electiocity companies have by law to buy useless 'renewable energy' at an artificially high price?