nuclear-news

EDF’s costly EPR nuclear reactor failures – in France, UK, China

 Emmanuel Macron hammers EDF as Britain’s nuclear energy future hangs in
the balance. The energy giant is our last hope in the push for big new
reactors. But the French president has handed it an almighty financial
headache.

Macron ordered the company to sell more electricity at knock-down
prices to its competitors, in order to keep a lid on soaring energy bills.
For Macron, it makes complete political sense. Three months out from an
election, he is keen to temper voter anger over energy costs, which, as in
the UK, have been pushed higher by surging gas prices.

EDF is 84 per cent owned by the French state and has to bow to its will — even when the
government’s intervention is “painful and defies good economic
sense”, as newspaper Le Monde put it. EDF calculated that Macron’s
demand would cost it €8.4 billion (£7 billion).

The company had no choice but to scrap its profit guidance for the year and warned investors
that it may need to seek more capital. Shares in EDF, listed in Paris,
plunged. In a leaked memo, chief executive Jean-Bernard Levy claimed that
Macron’s demand was a “real shock”. “It is going to weigh very
heavily on our results,” he added.

Trade union members at EDF have called
for a strike this week in protest at the president’s order.

Macron’sedict could not have come at a worse time for EDF, which was already facing
huge demands on its capital. On the same day that Kwarteng toured Hinkley,
the company cut its expected output of nuclear power this year by 8 per
cent, after warning that five faulty reactors in France would have to stay
offline while being serviced for longer than expected. This pushed the
total number of EDF reactors currently offline to nine.

EDF is midway through a long, slow upgrade of France’s fleet of 56 ageing nuclear
reactors; this project could cost it at least €50 billion. And, earlier
this month, it pushed back the start date and nudged up the expected cost
for its new reactor at Flamanville in France; the project’s cost has
quadrupled from initial estimates in 2004.

Flamanville’s overruns havetheir parallels at Hinkley Point, which is also years late and over budget.
It uses the same type of European pressurised water reactor (EPR) as
Hinkley, too. Other EPRs designed by EDF have run into problems: the
much-delayed Olkiluoto nuclear power plant in Finland is now finally
looking to start up this year; and Taishan — in Guangdong province in
China — has been offline since July because of a fault.

Taishan was supposed to be EDF’s “proof of principle for the EPR design”, said
Paul Dorfman, associate fellow in the science policy research unit at
Sussex University. “But that has not been the case. To shut down the
reactor is hugely expensive in terms of power, reputation, and in potential
safety … The EPR reactor has failed miserably in terms of cost overruns
everywhere that it’s been built.”

EDF remains confident that Hinkley
will be completed by 2026. Five and a half years into construction, it is
now at the halfway point. When operational, it will supply 7 per cent of
the UK’s electricity. About half of the £23 billion earmarked for
Hinkley has already been spent, and the remainder is expected to come from
EDF’s €27.5 billion cash pile. Hinkley, in other words, should be
completed despite the company’s travails. The outlook for EDF’s
Sizewell B in Suffolk, the next big nuclear project in the queue, is less
clear.

 Times 23rd Jan 2022

https://www.thetimes.co.uk/article/emmanuel-macron-hits-nuclear-button-edf-hinkley-point-cpcvtccn3

January 24, 2022 - Posted by Christina Macpherson | France, politics