Demand for Europe’s debt sales is running at a record pace as investors clamor to lock in attractive yields before central banks start cutting rates. Issuers from across the ratings spectrum are attempting to get deals done at the start of the year. Because of the swollen public debt, investors want a premium for holding long-term bonds in particular.

Output shrank to about 37 TWh after two stations closed. The UK wants to build as much as 24 GW of new nuclear capacity by 2050, with 6 GW in the next decade at a cost of more than £150 billion. “With revenues materializing around a decade after the Final Investment Decision, few banks are willing to consider financing nuclear power.

The new regulations will require banks to set aside more capital. US banks currently have capital requirements from $9 to $13 for every $100 in risk-weighted assets. Under the new rules, they will need to add $2. This will affect lending, including to green energy projects. Banks will look to work alongside other corners of the finance sector to finance project.

Small module reactors suffer financing setbacks and regulatory headwinds. Shares of NuScale are down 70% this year. A $1.8 bln deal for X-energy to go public collapsed. Oklo plans to go public and raise $500 mln via SPAC, but the Nuclear Regulatory Commission denied its permission, saying it did not provide enough information on its reactor design.

Naarea has already raised €50 mln from a handful of French family offices. The molten salt fast neutron reactors the size of a bus will burn plutonium and radioactive waste, have a 40MW electricity output and produce heat as well. Ceramic will prevent corrosion from the liquid fuel, something that has hampered the development of such reactors in the past.

Enel is planning to cut renewable investments (from €17 bln to €12.1bln), spend more on grids and pledged more fiscal discipline, under the new management. Italy will account for 49% of investments. Enel’s debt was €69 bln at the end of 2022 and should be cut by €11.5 bln by the end of 2024. The group will exit Argentina, Peru and Romania.

Germany will cease sales of inflation-linked bonds starting next year, the country’s Federal Finance Agency said. Germany has four outstanding inflation-linked bonds totaling €66.25 bln with remaining maturities between 2.5 and 22.5 years. The nation’s outstanding inflation-linked securities will continue to be tradable on the open market.

High inflation will raise interest payments on these of bonds by a third to £92 bln over the next 5 years, on top of the £89 bln extra for the last 2 years (3.4% of GDP). The UK has 25% of debt linked to inflation, Italy is second with 12%. The reason is demand by UK pension schemes eager to buy assets that match their inflation-linkedin payments.

Japanese companies are dropping out of offshore wind projects in Taiwan, one of fastest growing markets for the technology, as rising costs and worsening delays plunge the industry into trouble worldwide. This will affect Taiwan's plans to eliminate nuclear power, cut the use of coal, increase natural gas and increase offshore wind capacity.

Germany’s constitutional court ruled against reallocating the unspent money borrowed during the coronavirus pandemic for the energy transition, which will affect government plans. The constitution places limits on government borrowing. The pandemic allowed emergency borrowing, but using that money now for other purposes is unconstitutional.

The German government will provide €7.5 bln of guarantees as part of a rescue package, to save the €110 bln energy projects planned by the company. Engineering problems of the new wind turbines reduced new orders, costs have spiralled, while long term supply contracts locked in sale prices. The company will record a €4.5 bln loss for 2023.

NuScale Power and the Utah Associated Municipal Power Systems have ended the 462MW project. In January, NuScale raised the target price for power from the project from $58/MWh to $89/MWh, citing a “changing financial landscape”. NuScale's VOYGR is the only small modular nuclear reactor (SMR) design certified for use in the United States.