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Electricite de France (EDF) ‘s new nuclear reactors not financially viable

French auditor calls for financing guarantee for future EPR projects, WNN, 15 July 2020, EDF must ensure the financing and profitability of its proposed EPR2 reactor before starting construction of any plants based on the design in France, the country’s state audit office has said. The EPR2 is a simplified version of the EPR design, construction of which has been hit by delays and cost increases in France and Finland……..

Construction of the Olkiluoto 3 EPR began in 2005, with completion of the reactor originally scheduled for 2009. However, with various delays and setbacks, fuel loading is now planned for later this year. The loading of fuel into the Flamanville EPR in France, construction of which began in December 2007, is now scheduled for the end of 2022. Two EPR units are also under construction at the Hinkley Point C project in Somerset, UK.
In a report published 9 July, the Cour des Comptes says the rivalries between Areva and EDF “resulted in the hasty launch of the construction sites of the first two EPRs, in Finland and in Flamanville. This insufficient preparation led to underestimating the difficulties and the construction costs, and to overestimating the capacity of the French nuclear sector to face it, at the cost of financial risks for the companies of the sector.”
The report says the 3.3 times increase in the construction cost, estimated by EDF at EUR12.4 billion (2015 value), and by at least 3.5 times the commissioning time for the Flamanville EPR compared to initial forecasts, “constitutes a considerable drift”. It says this is the result of “unrealistic initial estimates, poor organisation of the project by EDF, a lack of vigilance on the part of the supervisory authorities and a lack of awareness of the loss of technical competence of industrialists in the sector”.

The audit office added, “The construction of new EPRs in France cannot in any event be envisaged without clear prior answers on the methods of financing and the role of nuclear power production in the electricity mix of tomorrow.”

The report says EDF is no longer in a position to finance the construction of new reactors on its own. The utility, it says, is studying means of financing that either makes the consumer – as in the case of the UK’s contract-for-difference for construction of Hinkley Point C – or the taxpayer bear the costs of construction.  

“The financial challenges are major, with the cost of construction of three pairs of EPR2 reactors being estimated at EUR46 billion (2018 value),” the Cour des Comptes notes. “Taking into account their duration of construction, production and dismantling, the decision to build or not to build future EPRs will have consequences until the 22nd Century. ….

July 16, 2020 - Posted by | business and costs, France, politics

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