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EDF’s nuclear decommissioning – financial problems

Another month in UK’s failing new nuclear programme nuClear News No.94 April 2017 EDF Finances A French Parliamentary report from the National Assembly’s Commission for Sustainable Development and Regional Development says the clean-up of French reactors will take longer, be more challenging and cost much more than French nuclear operator EDF anticipates. Whereas Germany has set aside €38 billion to decommission 17 nuclear reactors, and the UK Nuclear Decommissioning Authority estimates that clean-up of UK’s 17 nuclear sites will cost between €109‒250 billion over the next 120 years, France has set aside only €23 billion to decommissioning its 58 reactors. In other words France estimates it will cost €300 million per gigawatt (GW) of generating capacity to decommission a nuclear reactor, Germany estimates €1.4 billion per GW and the UK estimates €2.7 billion per GW.

EDF says it wants to set aside a €23 billion fund to cover decommissioning and waste storage for an estimated €54 billion final bill ‒ and the difference between these two figures will be closed through the appreciating value of its equities, bonds and investments ‒ in other words, ‘discounting’. Unfortunately, recent experience has taught us that markets can go up and down over time ‒ especially the very long-time periods involved in radioactive waste management. But for a company that has huge borrowings and an enormous debt of €37 billion, €23 billion is a large sum of money to find. Any significant change in the cost of decommissioning would have an immediate and disastrous impact on EDFs credit rating ‒ something that the debt-ridden corporation can simply not afford. EDF is already in financial trouble. Along with bailing out collapsing AREVA, EDF also has to bear the huge financial burden of the failing reactor newbuild at Flamanville. It will also have to pay for extending the life of France’s existing nuclear power stations (to 2025), at a cost of €55 billion.

On top of all this the French authority tasked with disposal of all the countries vast and increasing waste burden (Andra) has recently ramped up the estimated cost for the planned national nuclear waste repository at Cigéo, to €25 billion ‒ and EDF must pay for most of Cigéo’s construction. Although €5 billion more than EDF anticipated, it still seems a gross underestimation, and the costs are likely to rise considerably. (21) http://www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo94.pdf

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April 8, 2017 - Posted by | business and costs, decommission reactor, France, politics

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