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France’s EDF struggling with the costs of fixing ever-delayed Flamanville EPR nuclear project

French energy group EDF reviews costs of delayed nuclear project https://www.ft.com/content/c6bc1884-9343-11e9-b7ea-60e35ef678d2     Flamanville plant’s faulty weldings must be fixed, says watchdog   David Keohane in Paris JUNE 20, 2019

French energy group EDF says it is reviewing the start-up schedule and costs of its flagship Flamanville nuclear project after the regulator said it would have to fix faulty weldings, which have already delayed the project.

ASN, the nuclear watchdog, said on Wednesday that nuclear-focused EDF needs to repair eight of the joins at Flamanville in northern France.

“EDF is currently analysing the impact of this decision on the Flamanville EPR [nuclear reactor] schedule and cost, and, in the upcoming weeks, it will give a detailed update on the next steps in the project,” said the company in a statement on Thursday.

“This is negative news but it does not come as a surprise,” said analysts at Société Générale, since EDF had already flagged the likelihood of a delay. EDF’s shares fell 1.8 per cent by midday in Paris.
    
The ASN said in October that the weldings were being reviewed. While, in July, EDF said there would be further delays and cost overruns due to problems with the connections. It pushed back the loading of nuclear fuel and the target construction costs at the late and over-budget plant.

   EDF had said the loading of nuclear fuel was scheduled for the end of 2019 with commercial activity starting in 2020 and costs revised up again from €10.5bn to €10.9bn. Initially, Flamanville was expected to cost €3.3bn and start operations in 2012. ASN suggested in its communication to EDF that the plant would not be operational before 2022.

The Flamanville plant in France is one of three being built in Europe using the next-generation European Pressurised Reactor technology. The other two projects are the Olkiluoto project in Finland, which is more than a decade late, and the UK’s Hinkley Point, which is mired in controversy over the high cost of the project.

More broadly, EDF is expected to brief trade unions on Thursday about plans to reorganise the company. The plan, codenamed Hercules, say people familiar with the matter, would involve a holding company 100 per cent-owned by the state and two subsidiaries sitting beneath it. EDF Bleu, or EDF Blue, would house all nuclear and hydroelectric assets and EDF Vert, or EDF Green, would hold the renewables, services and network assets.

  EDF Vert would then be floated to raise funds.

The company will also propose a regulated pricing mechanism for 100 per cent of France’s nuclear production to replace the current mechanism, said analysts at Bernstein. The plan to split the company stems from this move since, as Bernstein add, a “100 per cent regulated price for nuclear production in France would likely be considered state aid by the EU”.

The plan thus still has to clear the European Commission as well as probable public pushback to higher regulated prices and heavy union opposition. French trade unions remain particularly powerful within EDF and has used threats of power cuts in the past.

 In a joint statement this week, the unions said they “oppose a strictly financial reorganisation that would lose sight of the industrial project, the social ambition and the general interest” of the group.

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June 22, 2019 - Posted by | business and costs, France, safety

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