The Inevitability of Nuclear Power

Hinkley Point B nuclear power station, UK

[A third nuclear reactor is to be built in Flamanville, France  by Electricité de France (EDF)]…Called Flamanville 3, is likely to become the focus of international attention because it is the model for an imminent expansion across the channel…EDF has agreed on October 21st agreed with China General Nuclear Power Corp (CGN), a state-owned entity, to build two reactors of the same design in south-west England called Hinkley Point C. EDF will own two-thirds of the project and CGN a third. The plant in Somerset is supposed to open by 2025, after construction that is forecast to cost £24.5 billion ($37.8 billion)…

The history of Flamanville 3, where work began in 2007, indicates how difficult that might be. It was planned as a five-year scheme, but this month EDF, which is mostly state-owned, formally asked officials to extend the deadline to 2020. Its original budget of €3.3 billion has more than tripled, to €10.5 billion ($11.9 billion). Getting its new European Pressurised Reactor (EPR) into service is proving harder than expected. One problem is the troubled condition of Areva, another mostly state-owned French firm, which supplies reactor components. It reported losses of nearly €5 billion in March, because of soaring costs and long delays at the only other EPR being built in Europe, Olkiluoto 3, in Finland. Work began in 2005 but it will not open before 2018 at the earliest.

The main technical problem at Flamanville 3 concerns suspicions of high levels of carbon in the steel of a crucial component, the vessel, already installed under the dome of the new reactor. Replacing it now, if inspectors conclude it is too brittle, would be costly. In June the company also said it was double-checking the working of safety valves.

Meanwhile EDF’s financial burden grows. It boasts of €73 billion in global revenues, but faces a threefold strain. Demand for electricity is stalling in France, its main market—and, as problematic, the country plans to cut nuclear’s share of electricity generation to half of the total, by 2025, from 75%. Next, though details are not finalised, EDF will absorb the nuclear unit of troubled Areva. Last, it has to upgrade, or at least maintain, France’s stock of ageing reactors. Mr Lévy told French radio on October 18th that capital expenditure for that alone would be around €50 billion.

No wonder ratings agencies judge that EDF’s financial prospects are secure only because of its state backing.

EDF’s prospects, indeed those of any nuclear company, depend on the backing of politicians who want to preserve nuclear expertise and jobs at home. 

EDF’s Nuclear Ambitions: French Lessons, Economist,Oct. 24, 2015, at 63

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