martes, diciembre 19, 2006

Playing With Fire and Collapse Part 6

Reference: Playing With Fire and Collapse Part 5

Hi Arvid,

"It is Time To Innovate - Energy Utilities Face Unprecedented Challenge, Opportunity. A new paradigm of electric power is emerging which will replace vertical integration and under either ("Tough Times" or "Rising Expectations") very plausible “non-continuity” scenario, will allow a large market share of distributed resources, as explained under the article The Future Utility Customer Service Model.

Notice please that a third way was missed in the decade old debate, which I consider to be electricity without price controls (EWPC). Notice also that under systemic thinking we should be changing from debate to a generative dialogue to answer the question posed by Andy “And perhaps most critically, how can we instill the sense of urgency needed for a comprehensive energy strategy to be put in place?” A lot of uncertainty will not allow imposing a highly risky silver bullet anymore.

Given a “non-continuity” – systemic thinking - expansion scenario, to be simulated using Energy Dynamics against the nuclear silver bullet – mechanistic thinking - expansion “continuity” scenario, please describe the mental model behind the proposal explaining the following about EDF Finances (Source Wikipedia).

For a long time, EDF suffered from very low profits for a group benefiting from such monopoly, especially since in the weakness of its results on the domestic market, were added the poor performances of its foreign subsidiaries. Nevertheless, its balance sheet is very fragile, because of its international development, of its tariff policy in France and rapid deterioration of its profitability.

From 2001 till 2003, EDF was forced to reduce its equity capital due to untoward deviations of conversion in South America and write-down of its assets in Germany, Italy and in Brazil for a total of €6.4 billion total. However, according to the report of the Roulet Commission, international development, although costly, must be followed, because if EDF spent €15 billion euro on acquisitions, its rivals would spend €70 billion. The commission recommends a European strategy, an international presence, albeit focussed, and a larger drive to supply gas.

The most significant problem (in May, 2004) was the rocking of the balance sheet between equity capitals of €19 billion and a €24.5 billion debt (November, 2004), for which it is necessary to add:

--- about €30 billion to meet its commitments to retirement of its workers in the electrical and gas industries (retirement at 55 years, favourable pension rates, etc), which will be met over time by the new tax payable tariff by consumers.

--- €6.4 billion for financial commitments in Italy and in Germany, a sum which could come to more than €10 billion, from 2005.

--- and a huge sum to continue establishing reserves to finance the future dismantling of 58 nuclear power stations. A theoretical reserve currently valued at €28 billion was made, but it is far from being sufficient and it is used in fact to a greater extent for international development.


José Antonio (not just José)

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