nuclear-news

France’s nuclear industry now a liability, with AREVA’s down ward spiral

France’s Nuclear Decline Exposed as Areva Confronts Cash Crunch by Tara Patel, 27 Mar 15, (Bloomberg) — For decades France’s nuclear industry was seen as a source of economic strength, providing cheap power for factories, high-tech exports and tens of thousands of well-paid jobs. Today, it’s looking more like a liability.

Electricite de France SA, the world’s largest nuclear operator, must spend $63 billion over the next decade to keep the country’s aging fleet of 58 reactors running safely. More urgently, nuclear engineer Areva SA, touted as an export champion for a new atomic age, has lost billions from a project in Finland and investments in African uranium mines, raising the prospect of a state bailout…. The financial “sickness” at Areva could prove contagious to the whole nuclear industry, said Juan Camilo Rodriguez, an analyst at Alphavalue SAS…..

“The situation is difficult for Areva,” French Energy Minister Segolene Royal said Monday, just hours after the company shocked investors by saying losses for 2014 would be about 4.9 billion euros ($5.5 billion), more than its market capitalization……

Areva has been in a downward spiral since the meltdown at Fukushima’s atomic plant in Japan shook the global industry in 2011. The nuclear engineering company, which services existing reactors and supplies them with fuel, has lost about 75 percent of its value since as nations pulled back from atomic projects.

Last November, Areva’s credit rating was reduced to junk status by Standard & Poor’s after it abandoned financial targets. The company blamed its losses on construction of a new reactor on a Finnish island, delays in restarting Japanese plants and a worsening outlook for other export orders.

Before Fukushima, France’s atomic industry was readying for a nuclear energy renaissance. Former EDF Chief Executive Officer Pierre Gadonneix predicted France’s flagship reactor, the giant EPR model, would sell “like hotcakes” around the world.

Over Budget  Fukushima ended the prospect of new reactors in many countries, including Italy and Switzerland, in addition to damping a number of potential export markets for Areva and EDF. Germany decided to shut all its nuclear reactors.

Not a single EPR has yet fired up as construction projects in France’s Normandy region as well as in Finland and China are behind schedule and mostly over budget…….

Against the backdrop of Areva’s financial uncertainty, a long-delayed law that would reduce France’s reliance on nuclear power is in the Senate. Prospects for Areva and EDF will be affected by the decision of lawmakers on whether to shut some reactors……http://www.bloomberg.com/news/articles/2015-02-27/france-s-nuclear-decline-exposed-as-areva-confronts-cash-crunch

March 28, 2015 - Posted by Christina Macpherson | business and costs, France, politics