AREVA’s woes heralding a slippery global slope for the nuclear industry?

French Nuclear Dynamo Stalls, NYT, By DAVID JOLLY and STANLEY REEDMAY 7, 2015 PARIS — For decades, France has been a been a living laboratory for atomic energy, getting nearly three-quarters of its electricity from nuclear power — a higher proportion by far than in any other country.

And France’s nuclear companies have long been seen as leaders in building and safely operating uranium-fueled reactors around the world — including in the United States — and championed by Paris as star exporters and ambassadors of French technological prowess.

But in the last few years, the French dynamo has started to stall. New plants that were meant to showcase the industry’s most advanced technology are years behind schedule and billions of euros over budget. Worse, recently discovered problems at one site have raised new doubts about when, or even if, they will be completed……..

Alarmed by the French industry’s problems, the Socialist government of President François Hollande is expected soon to announce an industry overhaul. As the majority owner of the country’s two main nuclear companies — the reactor maker Areva and the big utility operator Électricité de France — the government will aim not only to put the companies on a firmer financial footing but to reorganize them in hopes of restoring the French industry’s role-model luster.

On Thursday, Areva took the first of those steps by announcing big cost-cutting plans. The move is likely to trim as many as 6,000 jobs from the company’s global work force of 45,000 — as many of 4,000 of those coming in France……….

the stumbles elsewhere by Areva and Électricité de France — better known as EDF — have raised troubling questions about the viability and cost of the UK’s Hinkley Point plant. And while Prime Minister David Cameron has courted the Chinese, other British officials have raised security questions about involving state-backed Chinese companies.

With the French companies struggling, some nuclear experts see a slippery geopolitical slope.

”The problems with Areva may open the door for Russia and Chinese reactor exports, but Chinese and Russian exporters are plagued by lack of a track record in building and siting their new reactor designs, and little is known about the safety standards of these reactors,” said Antony Froggatt, a nuclear analyst at Chatham House, a London-based research organization…………….

More bad news came recently. On April 7, the French nuclear regulator, the Autorité de Sûreté Nucléaire, announced that imperfections had been discovered in the steel that Areva used to make the top and bottom caps of the main reactor vessel at the plant under construction in Flamanville.

Pierre-Franck Chevet, president of the nuclear regulator, has described the defects as “serious — even very serious.”

The reactor vessel is a crucial part of an atomic plant — the housing meant to contain the extreme heat, pressure and radiation produced by the nuclear fission that occurs inside. The steel used for key parts of the Flamanville vessel was made at the Areva forge in Le Creusot, France. An analysis by the company found an unacceptably high level of carbon –— impurities that could threaten the steel’s structural integrity……..

The companies have said they are planning new tests to show that the equipment at the Flamanville plant conforms to standards.

The energy minister, Ségolène Royal, has said that the tests should be finished by October, although there is no clarity on when the regulator’s analysis will be completed.

In the worst case, experts say, the vessels in Flamanville and Taishan might have to be dismantled and reforged, at a cost potentially totaling hundreds of millions of euros and creating additional major construction delays. Some experts say it might make more economic sense to simply to abandon the projects.

The French nuclear industry is not alone in its struggles. The remaining longtime nuclear industry leaders, including the Japanese giant Toshiba — which now owns the American maker Westinghouse — are also encountering high costs and other problems with their latest-generation reactor designs.

For instance, Southern Company, an American utility building a plant with a new type of Westinghouse reactor near Augusta, Ga., said earlier this year that the installation might be delayed for 18 months, adding $720 million to costs.

The problems have left an opening for other providers. China currently has the largest domestic nuclear power construction program and 22 reactors in operation. But the Chinese industry is only beginning to break into the export market, with a plant under construction in Pakistan and a deal under discussion in Argentina.

Russia has a long list of potential international projects including plants in India, Turkey and Finland. Analysts say, though, that the Western economic sanctions imposed on Moscow over Ukraine have cast doubts on Russian nuclear exports, in part because they would need to be supported with loans that the Kremlin may no longer be able to afford.

But the French industry now has a serious credibility problem, in the view of Yves Marignac, an independent energy analyst and a frequent critic of France’s nuclear policy. The unanswered questions, he said, include why Areva and EDF installed the possibly defective pieces in the reactor pit and began the welding and wiring even before testing was completed.

“The fact that it was detected so late means that either EDF or Areva overlooked the risk of this kind of problem, which would reflect badly on their competence, or they were trying to create a fait accompli before it was detected,” Mr. Marignac said.

“There’s a safety issue,’’ he said, “and maybe an even stronger trust issue.”

David Jolly reported from Paris and Stanley Reed from London.http://www.nytimes.com/2015/05/08/business/energy-environment/french-nuclear-dynamo-stalls.html?_r=0

May 8, 2015 - Posted by Christina Macpherson | business and costs, France, politics, politics international

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