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France’s problems with nuclear corporation EDF

Following my previous post on EDF’s woes and their impact on the
European market, here’s a list of topics, both practical and political,
that the company needs to deal, and their domestic impact in France.

Corrosion issues. 12 plants, mostly the more modern ones, have been stopped
due to cracks in pipes;

Flamanville. The only new nuclear plant in
construction in France, it has been beset by delays and cost overruns;
Overall supply levels. With the existing nuclear fleet getting older, it
will likely require more maintenance (both scheduled and unscheduled), and
become more vulnerable to loss of skills as experienced nuclear workers
retire and are only partly replaced given the uncertain prospects of the
sector; Expensive imports. The lower production levels mean that EDF needs
to import increasing volumes of power. With the current gas crisis
triggered by the Russian invasion of Ukraine, this leads to very high power
prices and significant costs;

Blocked retail prices. After years of being
told that France has the cheapest electricity thanks to nuclear, the price
of retail electricity is a highly volatile political topic. Energy prices
are a hot-button issue everywhere, but they are specifically so for
President Macron;

The ARENH boondoggle. As part of the opening of the
French power market pushed by the EU commission, EDF has been forced to
sell a chunk of its nuclear production (initially 100 TWh/y, ie roughly 25%
of its production) at a fixed price (42 EUR/MWh) to new competitors on the
retail market;

EDF restructuring and EU competition issues. Several of the
items above remind us that EDF is a topic closely watched in Brussels. The
earlier EDF restructuring concept (codename “Hercule”) which proposed
to split EDF in 2 entities (nuclear and hydro, publicly owned: networks and
renewables, to be listed) was opposed by unions, and viewed with skepticism
in Brussels;

One of the topics that derailed the Hercule process was what
to do with EDF’s large portfolio of hydro generation. The EU commission
has long wanted to open up that sector to competition and force the
government to tender the dams when the concessions granted to EDF come to
an end. The fact that EDF has proven unable to build the next-generation
EPRs is either seen as a temporary blip, or a plot by outsiders to weaken
the country (anti-nuclear policies, pushed in particular by Germany, are
seen to have willfully weakened France’s industrial base). Renewables,
despite all evidence to the contrary, are still seen as either a useless
greenwashing sideshow or a dangerous distraction.

 Jerome in Paris 4th Aug 2022

https://jeromeaparis.substack.com/p/edf-the-strategic-questions-and-to

August 5, 2022 - Posted by | France, politics

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