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France’s new nuclear reactors mired in debt

plants-downFrench taxpayers face huge nuclear bill as EDF financial crisis deepens, Ecologist, Paul Brown 8th December 2016 “………New nuclear stations  Even more money is required to finish new nuclear stations EDF is already committed to building. The first, Flamanville in northern France, is five years late and billions over budget. Questions over the quality of the steel in its reactor are still not resolved, and it may never be fully operational.

Add to that the need for €12 billion (or potentially considerably more) capital to complete the two nuclear stations EDF is committed to building at Hinkley Point in southwest England, and it is hard to see where all the money will come from.

To help the cash-strapped company, its ultimate owner, the French state, has already provided €3 billion in extra capital this year, and decided to forego its shareholder dividend. But that is a drop in the ocean.

Mycle Schneider, a Paris-based independent international consultant on energy and nuclear policy, says: “The French company overvalues its nuclear assets, and underestimates how much it will cost to decommission them.

“However, EDF’s biggest problem is the cost of producing power from these ageing power stations. The cost is greater than the wholesale price, so everything they sell is at a loss. It is impossible to see how they can ever make a profit.”

He says that is not the company’s only problem: France has not dealt with the problem of nuclear waste, and has badly underestimated the cost of doing so: “With German electricity prices going down and production increasing in order to export cheap electricity to France, it is impossible to see how EDF can ever compete. It is really staggering that no one is paying any attention to this.”

Even former EDF director Gérard Magnin agrees. He resigned from the board in July as he thought the Hinkley Point project too risky for the company because of its already stretched finances. Now he says that, with the reactors closed for safety checks, the French nuclear industry faces “its worst situation ever”.

The company’s troubles do not stop in France, as EDF also owns the UK nuclear industry. Ironically, it took over 15 reactors in the UK after British Energy went bankrupt in 2002 because the cost of producing the electricity was greater than the wholesale price – exactly the situation being repeated now in France.http://www.theecologist.org/News/news_analysis/2988433/french_taxpayers_face_huge_nuclear_bill_as_edf_financial_crisis_deepens.html

December 9, 2016 - Posted by | business and costs, France, politics

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