AREVA’s huge loss on Finland nuclear project
Areva Posts 2.04 Billion-Euro Loss on Finnish Project http://www.bloomberg.com/news/articles/2016-02-25/areva-delays-results-by-24-hours-after-securing-bridge-loan, 25 Feb 16 Francois De Beaupuy
The company, 87 percent owned by the French government, had a net loss of 2.04 billion euros in 2015 after a loss of 4.83 billion euros a year earlier, the company based near Paris said Friday in a statement. It took a 905 million-euro charge related to the Finnish power station project due to extra operating costs and the “probable impact” of further discussions with the customer to settle the disputes over the project and bring it to completion.
Areva said it expects negative net cash flow from operations in 2016 in the range of 1.5 billion to 2 billion euros, due partly to expenses to be incurred on large projects and an unfavorable change in working capital requirements.
As a result, Areva’s credit rating was downgraded in December by Standard & Poor’s to B+, four steps below investment grade. Shares of the company have dropped 32 percent this year, extending a drop of 40 percent in 2015. The company delayed its earnings report by one day in order to finalize a bridge loan.
EDF has said it will buy a majority stake in Areva’s reactor unit provided it’s not exposed to the Finnish atomic plant project.
EDF’s Flamanville nuclear power project – ever more delays
EDF’s French nuclear plant faces years of further delay,Ft.com, 20 Mar 16 EDF’s new nuclear power station in France faces years of further delays if tests confirm that the steel used in its reactor is flawed, the country’s atomic watchdog has warned.
It is one of the clearest signals to date of the scale of the setback faced by the French utility. The flagship plant at Flamanville in Normandy has already been subject to years of delays and cost overruns, which have made it difficult for EDF to fund the identically designed £18bn reactor at Hinkley Point in the UK — a key element in Britain’s energy strategy.
Initially, Flamanville was expected to cost €3.3bn and start operations in 2012 — it is now planned to start in 2018 at a cost of €10.5bn.
But Julien Collet, the deputy director of France’s Nuclear Safety Authority, has said that it could be delayed further by several years, depending on the results of tests started last year and due to end this summer on the steel being used in the reactor core.
If the steel fails the tests, regulators could order EDF to rip out and replace the top and bottom of the reactor vessel. Mr Collet told the Financial Times: “It takes a lot of time to build new components like this — we’re talking years.”
The difficulties EDF is having with the steel at Flamanville have been caused by problems with the process of cooling and cutting a 450-tonne ingot of steel, which created an area the size of a dinner plate that was slightly more brittle than it should have been.
Areva, the French nuclear company in whose reactor business EDF is due to take a controlling stake, is working with regulators to test an identical piece to determine if it could lead to weakness in the reactor vessel.
The problem was discovered in late 2014 but EDF opted to push ahead with construction, potentially making it much more difficult to replace the faulty steel if needed……..
having agreed to fund 66.5 per cent of the [UK’s Hinkley Point C nuclear] project last year, EDF has delayed giving it final approval, with some at the top of the company arguing more investors should be brought in first.
Finding outside investment has been difficult because of the problems being experienced with other EPRs in France and Finland, according to senior people within the company………http://www.ft.com/intl/cms/s/0/73d62552-ec65-11e5-bb79-2303682345c8.html#axzz43TzEfz49
UK Members of Parliament to question EDF executives about Hinkley nuclear project financing
EDF Energy to be grilled by MPs over Hinkley Point C nuclear power plant , City AM. 17 Mar 16 EDF Energy will be grilled by a group of MPs next week over the controversial Hinkley Point C nuclear power plant in Somerset.
EDF’s chief executive Vincent de Rivaz, and managing director of new nuclear build Humphrey Cadoux-Hudson, will appear before the energy and climate change select committee on Wednesday.
It comes as French economy minister Emmanuel Macron pledged fresh financing for the £18bn project during a visit to a nuclear power plant there today.
EDF has been forced to defend Hinkley after its chief financial officer Thomas Piquemal resigned over the huge costs. It subsequently sent a letter to employees reiterating confidence that the project will go ahead.
“The hearing will give EDF Energy an opportunity to answer the committee’s questions on the investment plans for a new nuclear power station at Hinkley Point C in Somerset,” it said in a statement today……..http://www.cityam.com/237033/edf-energy-to-be-grilled-by-mps-over-hinkley-point-c-nuclear-power-plant
France’s auditor brands Hinkley Point nuclear project as financially risky
Hinkley Point branded potentially risky for EDF by French auditor, Guardian 11 Mar 16
Cour des Comptes urges greater study of nuclear project’s risks given poor recent investments and the fact EDF must fund likely cost overruns. EDF’s £18bn project to build nuclear reactors in Britain is potentially risky for the state-owned utility, whose foreign investments in recent years have proved disappointing, France’s top public auditor has said.
In a report on EDF’s international strategy, the Cour des Comptes – the French equivalent of the UK’s National Audit Office – said EDF and its 85% state shareholding should take a close look at the risks associated with the project to build two nuclear reactors at Hinkley Point in Somerset.
The report, which focuses on the 2009-2014 period – which includes EDF’s October 2013 agreement with the British government but not its deal in October 2015 with the Chinese utility CGN to take a one-third stake – said the financing around the Hinkley Point deal was potentially risky for EDF.
The auditor said EDF’s cashflow and high debt limit its capacity to invest abroad, especially given the huge sums needed to upgrade its ageing French nuclear plants.
“Even though the [Hinkley Point] deal has not been finalised, the complexity of the deal and especially the way it could impact the responsibility of EDF suffice to raise serious questions,” the auditor ……..http://www.theguardian.com/business/2016/mar/11/hinkley-point-risky-edf-french-auditor-cour-de-comptes?CMP=share_btn_tw
EDF want French tax-payers’ financial aid for UK Hinkley Point Nuclear Projectr
EDF Asks French Government for Aid for Hinkley Point Nuclear Plant CEO Jean Bernard Levy says EDF won’t engage in project without necessary commitments from state http://www.wsj.com/articles/edf-asks-french-government-for-aid-for-hinkley-point-nuclear-plant-1457797452 By INTI LANDAURO March 12, 2016
PARIS— Electricité de France SA Chief Executive Jean-Bernard Levysaid he is seeking financial support from the French government to develop the Hinkley Point nuclear plant in southern England, as the project faces fierce scrutiny following the resignation of the company’s No. 2.
In a letter sent to company employees on Friday, Mr. Levy said EDF wouldn’t engage in the £18 billion ($25.89 billion) project unless it was able to secure necessary financial commitments from the state, which holds almost 85% of the utility.
Two EDF officials who requested anonymity confirmed Mr. Levy’s comments. The letter was sent four days after Chief Financial Officer Thomas Piquemal quit unexpectedly on concerns that the project would threaten the company’s financial stability.
The Hinkley Point project is the centerpiece of a series of business deals between the U.K. and China announced last year, with China General Nuclear Power Corp. agreeing to take a 33.5% stake in it.
The past week’s letter and CFO resignation are signs that scrutiny over the project has grown, despite support from the French and U.K. governments.
Even though the conditions granted by the U.K. government—with the pledge to buy the electricity generated around three times the current market price—would make it profitable, union representatives on EDF’s board have said Hinkley Point could saddle the company with too much debt.
EDF, which has €37.4 billion ($41.70 billion) in net debt, had its credit rating put on review for a downgrade by Moody’s Investors Service last month. Also last month, EDF said it would reduce its dividend and offer stockholders part payment in shares to bolster its finances, as well as selling assets and reducing capital spending. The utility is separatelyinvolved in the financial rescue of state-controlled Areva SA, which has lost money for the past five years. EDF last year agreed to pay at least €1.25 billion for a majority stake in Areva NP, the unit that manufactures nuclear reactors.
Separately, the risk associated with the construction of EDF’s EPR reactor design also raises uncertainty about the project. To this day, no plants using the technology have been completed. The first two being built, in Finland and in northern France, have run way over budget and are years behind schedule.
Write to Inti Landauro at inti.landauro@wsj.com
How EDF taught Britons to love nuclear power, especially targeting women
Targeting women In 2012 EDF began a publicity campaign in the UK to soften up the public, which was predominantly anti-nuclear, including paying for editorial in women’s magazines because its market research found that women were more like to oppose nuclear power than men.
A complaint I made to the Advertising Standards Authority was upheld, regarding the use of advertising from EDF that was not labelled as advertising and looked like editorial, in Marie Claire – the “magazine for women who want to think smart and look amazing”. The articles were provided by EDF, under the headline “Nuclear power: the facts”, but contained inaccuracies.
Even after the ASA ruled in my favour, EDF still continued making dubious claims in the pages of the magazine, such as that in the 2030s “nuclear reactors in Somerset and Suffolk could supply around 40 per cent of the country’s energy needs”.
In its dreams, maybe. because even while this was going on the French National Audit Office had recommended abandonment of the EPR as too complex and expensive.
“The problem is, politicians like big projects. By contrast, energy efficiency, although much more beneficial, is almost invisible, and is certainly lots of small projects.”
And energy projects don’t come much bigger than nuclear power. As Jimmy Cliff might have put it: “the bigger they come, the harder they fall.”
The mystery of Britain’s love affair with new nuclear, The Fifth Estate, David Thorpe | 8 March 2016
Electricite de France’s chief financial officer Thomas Piquemal has resigned after opposing the announcement next month of a final investment decision on building a new nuclear reactor at Hinkley Point C in the UK.
EDF shares immediately dropped in value and further questions are being asked over the wisdom of proceeding with the plant, which would be the first new nuclear power station to be built in the UK in two decades. It was originally planned for completion in 2017 and is now unlikely to be built until at least 2025 – if ever. Continue reading
Letter from Stop Hinkley Campaign to EDF Energy
nuClear News Mar 16
Dear EDF Energy, We are writing to you before another EDF Board Meeting at which it is rumoured a final investment decision on Hinkley Point C could be made to urge you to scrap this project altogether.
- Debts of €37 billion (£28 billion) and its share price has fallen from €29 in April 2014 to €10.32 last week. Financing a massive project like Hinkley Point C will clearly place a significant strain on finances. (2) The union notes that the debt related to Hinkley Point C will need to be 100% fully consolidated into the EDF accounts – an amount which exceeds the market capitalization of the Group.
- EDF is now facing a €100m bill for upgrading its nuclear power stations in France according to a report by French Government auditor – the Cour des Comptes – rather than €55bn previously estimated. (3)
- EDF has also agreed to buy between 51 and 75% of the struggling French reactor builder Areva NP which is valued at €2.7bn. So will have to find at least €1.4bn for that.
- The French waste agency Andra has estimated that the cost of its deep geological disposal project could be as high as €30bn rather than the €20bn estimated by EDF. (4) French energy minister Ségolène Royal has signed a decree setting the ‘reference cost’ at €25 billion – still a jump of €5bn for EDF. (5)
Resignation of EDF’s finance director heralds crisis in UK Hinkley nuclear project
Hinkley Point C nuclear project in crisis as EDF finance director resigns
Proposed £18bn Somerset plant has been pushed by George Osborne but some on French company’s board fear risky spending, Guardian, Terry Macalister, 7 Mar 16, The £18bn Hinkley Point C nuclear project was in crisis on Sunday night after reports that the finance director of EDF, the company behind the scheme, had resigned.EDF tells contractors to restart work on Hinkley Point, report says
Thomas Piquemal has stood down from his post after expressing trenchant opposition to those on the EDF board who want to give the green light to the project within weeks, sources said.
The resignation of such an important figure on the EDF board will make it much harder for the remaining executives to proceed with Hinkley in the short term……..
Piquemal is said to have been arguing that pursuing what would be the world’s most expensive power project at this moment could jeopardise the French group, which already has rising debts.
Union members on the EDF board are also implacably opposed to Hinkley Point, saying it is too expensive and a risk to the energy company’s future…….http://www.theguardian.com/environment/2016/mar/07/hinkley-point-c-nuclear-project-in-crisis-as-edf-finance-director-resigns?CMP=twt_a-environment_b-gdneco
Burdened by the failure of AREVA, Electricite De France struggles for survival
French Mastery of Nuclear Power at Stake in U.K. Reactor Project, Bloomberg Francois De Beaupuy March 4, 2016
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EDF faces dilemma of whether to proceed with $26 billion plant
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Unions argue for a delay because company’s future is `at risk’
Electricite de France SA, the world’s largest operator of nuclear power plants, is stuck in a multibillion-dollar quandary that will shape its future.
Going ahead with new EPR atomic plants in the U.K. would strain the limits of its balance sheet as slumping electricity prices across Europe reduce cash flow. Dropping the Hinkley Point venture in southwest England would further damage the image of a new French-designed reactor, already tarnished by delays and cost overruns at projects elsewhere…….
The EPR reactor design from French nuclear group Areva SA was once a symbol of the nation’s engineering prowess. EDF’s former Chief Executive Officer Pierre Gadonneix predicted it would sell “like hotcakes” around the world. Project setbacks and the safety fears following the Fukushima disaster in Japan in 2011 stymied those plans, while a flood of competing energy supplies from solar and wind has left one of the nation’s most important industries in distress. - The two 1,600-megawatt plants at Hinkley Point would cost about 18 billion pounds ($26 billion), with China General Nuclear Power Corp. paying for a third. Standard & Poor’s is threatening to downgrade EDF’s credit rating if the U.K. project, which has been planned for more than eight years, goes ahead……
- EDF shares, 85 percent of which are owned by the French state, have lost as much as 89 percent of their value since peaking in 2007 and hit a record low on Feb. 25. French year-ahead wholesale electricity prices dropped 60 percent over the same period…….
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Areva Burden
Areva has complicated matters for EDF, accumulating 5.5 billion euros of losses on the construction of an EPR in Finland that’s already seven years late. Areva was due to take 10 percent of Hinkley Point, with EDF taking 45 percent to 50 percent and two Chinese partners holding the remaining 40 percent. As Areva’s finances worsened, it withdrew, forcing EDF to raise its stake to 66.5 percent. To make matters worse, EDF was called to rescue Areva by the French government by taking a majority stake in its troubled reactor unit.
EDF has its own problems with the EPR it’s building in Flamanville. Costs have more than tripled to 10.5 billion euros and construction is now six years behind schedule. The French nuclear watchdog has expressed concerns about the strength of the reactor vessel, forcing EDF and Areva to conduct tests to prove its safety.
“EDF is vulnerable to events over which it has no control: falling power prices following deregulation, and the balance sheet knock-on impact from Areva’s financial troubles,” said Adam Dickens, an analyst at HSBC Holdings Plc, in a March 1 report.
The company is borrowing money to pay its dividend and plans to sell assets to finance new developments. It cut annual operational expenditures by 300 million euros, or 1.4 percent, last year and plans to reduce them by a further 700 million euros by 2018. On Feb. 16, it reduced its estimate for how much it will spend to extend the life of its French reactors by 5 billion euros to 50 billion euros.
“Risks are way too high, ” Francis Raillot, a representative of the CFE-CGC union at EDF, said on Feb. 29. “We want the final investment decision to be delayed. The future of the company is at stake.” http://www.bloomberg.com/news/articles/2016-03-03/french-mastery-of-nuclear-power-at-stake-in-u-k-reactor-project
This year, France will close Fassenheim, its oldest nuclear power station
France’s oldest nuke plant ‘to close this year’ , The Local 7 Mar 16, France is to close down its oldest nuclear power plant, at the centre of a row with neighbouring Germany and Switzerland, by the end of this year, a green minister said Sunday.
- Germany demands France shut old nuclear plant (04 Mar 16)
- Swiss sue French over ‘dangerous’ nuclear plant (03 Mar 16)
”The timeline is one the president has repeated to me several times, it’s2016,” said Emmanuelle Cosse, who was named to President Francois Hollande’s cabinet last month, referring to the Fassenheim plant.
Cosse was speaking to French media after a row sparked Friday when Germanydemanded that France close down Fassenheim following reports that a 2014 incident there was worse than earlier portrayed……..
On Sunday, Cosse said that to reach its target, the government would have”to close other nuclear plants, other reactors, obviously, over several years.”
Hollande named Cosse, a member of the French Greens Party (EELV), housingminister as part of a reshuffle seen as a bid to broaden his appeal ahead of a re-election bid next year. http://www.thelocal.fr/20160306/frances-oldest-nuke-plant-to-close-this-year
Authorities withheld information on serious incident at Fessenheim nuclear facility in France
Reports: Fessenheim nuclear accident played down by authorities http://www.dw.com/en/reports-fessenheim-nuclear-accident-played-down-by-authorities/a-19093477
An incident at the Fessenheim nuclear facility in France in 2014 was more serious than previously known. German media reports claim the authorities withheld information detailing the gravity of the situation. Both the French nuclear authority, ASN, and the company operating the two Fessenheim nuclear reactors, French energy giant EDF, allegedly did not divulge the gravity of the incident on April 9, 2014, when one of the reactors had to be shut down after water was found leaking from several places.
Researchers from German daily “Süddeutsche Zeitung” and public broadcaster WDR claim the incident at Fessenheim, which is in Alsace near the border with Germany, could turn out to be one of “most dramatic nuclear accidents ever in Western Europe.”
They are basing the claim on a document they say they have obtained, sent by ASN to the then-head of the facility on April 24, 2014.
The letter and subsequent reply reveal that the reactor could not be shut down in an ordinary fashion due to control rods being jammed. The reactor had to be shut down by adding boron to the pressure vessel, an unprecedented procedure in Western Europe, according to an expert.
“I don’t know of any reactor here in Western Europe that had to be shut down after an accident by adding boron,” Manfred Mertins, expert and government advisor on nuclear reactor safety, told WDR and Süddeutsche Zeitung.
The reports say the official report ASN released did not contain information on adding boron nor the jammed control rods. It was also not reported in that way to the International Atomic Energy Agency (IAEA).
The Fessenheim reactors went online in 1977 and 1978, making them France’s oldest. The government has repeatedly said it would shut down the facility after fierce criticism from politicians at home, as well as from neighboring Germany and Switzerland.
On Friday, Eveline Lemke, environment minister for the German state of Rhineland-Palatinate, which borders Alsace, called for Fessenheim to be shut down immediately. She said she was “dismayed to hear about yet another incident involving a French reactor,” adding that France’s nuclear watchdog was “evidently failing.”
Germany has also been at loggerheads with Belgium over the country’s Tihange nuclear reactor near their shared border. It was shut down in March 2014, but went back online in December last year, despite concerns over cracks in its pressure vessels.
Nuclear power still provides three-quarters of France’s energy needs, but the government passed legislation last summer to cut the country’s dependence on atomic energy.
France sued by Geneva over dangerous and polluting nuclear station
Geneva sues France over ‘dangerous’ nuclear plant, The Local, 03 Mar 2016 Geneva is taking legal action over a French nuclear reactor for “endangering lives and polluting water”. Some 70 kilometres from Geneva as the crow flies, Bugey, in the Ain department, is one of France’s oldest nuclear power plants, having come into service in 1972.
The site creates about 4.5 percent of France’s electricity using pressurized water reactors that harness water from the nearby Rhône River.
It has been the subject of controversy before, notably in 2013 when Greenpeace activists broke in to the plant to highlight alleged security weaknesses at the facility.
The current Swiss legal action is a joint initiative by Geneva’s city and cantonal authorities, which have teamed up on an issue that has preoccupied the region for some time, reports Swiss daily 24 Heures.
Back in 2012, the canton placed an official objection to French energy company EDF’s authorization to create a nuclear waste depot at the Bugey site, but the complaint was rejected by the French government. In March 2015 the city council engaged Corinne Lepage, environmental law specialist and a former French minister, to devise a legal strategy calling for the plant to be shut down.
This fresh Swiss campaign against Bugey, led by Lepage, comes as Switzerland decides to shut down one of its own nuclear plants, at Mühleberg.
The reactor in the canton of Bern will be disconnected from the Swiss electricity grid in 2019 and will be finally put out of service by September 2020 at the latest, its owner BKW Energy announced to the press on Wednesday.
Like Bugey, Mühleberg also dates from 1972, making it one of the oldest nuclear plants in the world.
No age limits
However, despite the old age of some of Switzerland’s nuclear installations, their lifespan should not be limited by law, the federal government said on Wednesday.
On Wednesday the Swiss parliament voted against a motion to set an age limit for nuclear plants………
Worse than before Fukushima’
Quashing the proposal angered some on the political left, however, including president of the Greens, Adèle Thorens.
Speaking to Le Matin, she said: “Instead of moving away from nuclear power it’s been decided to prolong the life of nuclear plants instead.”
Worse, she said, was the fact that parliament “had refused the recommendations of our own monitoring organization!”
“We are now in a security situation worse than before Fukushima,” she added. “That’s the incredible paradox of our energy strategy.” http://www.thelocal.ch/20160303/geneva-sues-france-over-dangerous-nuclear-plant
The horrendous truth about just how big a mess nuclear corporation EDF is in
EDF’s leaked Board Agenda: Zombie nuclear projects and ‘beyond the grave’ reactors http://www.theecologist.org/blogs_and_comments/Blogs/2987305/edfs_leaked_board_agenda_zombie_nuclear_projects_and_beyond_the_grave_reactors.html Jonathon Porritt 29th February 2016 
French nuclear parastatal EDF is facing problem after problem – zombie nuclear projects in the UK, Finland, China and France, a fleet of ‘beyond the grave’ reactors, a dropping share price and its drooping credit rating. But is it really as bad as all that? Jonathon Porritt has exclusive access to the leaked Agenda of its latest board meeting. And the answer is – no. It’s even worse.
You seriously wouldn’t want to be a Director of EDF at the moment. The agenda for an average Board Meeting must be seriously gloomy on each and every occasion.
And thanks to an EDF mole (and to judge by the number of leaks to the French press and the UK’sFT there’s a lot of them) I can now state this as fact, not mere opinion.
An annotated copy of the Agenda items for their last meeting on 16th February mysterious showed up in my email today, helpfully summarised byAlexandre Perra, EDF’s Executive Committee Secretary.
Item 1: Existing EPR construction projects
1.1 Olkiluoto (Finland)
Continuing, horrendous cost overruns, leading to ongoing legal stand-off with Finnish partners. Already delayed by seven years, but (hopefully!) could be finished by 2018.
1.2 Flamanville (France)
Continuing, horrendous cost overruns. Already delayed by nine years, but (hopefully!) could be finished by 2018.
1.3 Taishan (China)
Serious problems with both reactors under construction, but, this being China, everything’s shrouded in secrecy. WARNING: This could be much worse than we currently understand.
1.4 Pressure vessels
Still waiting for final safety assessment from French regulators. WARNING: There could be really serious problems here, despite our best efforts to ‘work with’ the regulator.
1.5 Deadlines/UK Treasury
These deadlines are now CRITICAL – as in EXISTENTIAL.
UK Treasury’s loan guarantees are linked to Flamanville operating successfully. And if it is not working properly by 2020, loan guarantee will be completely withdrawn.
Item 2: New reactors at Hinkley Point, Somerset
2.1 Final investment decision
Postponed again – for the eighth time. Still unable to raise the €23.3bn (£18bn), despite our Chinese backers agreeing last year to provide one-third of the total sum, and despite the UK Government offering all but limitless subsidies.
CAUTIONARY NOTE: The true cost is of course much closer to €31 (£24.5bn) taking into account both the cost of construction and the costs of finance. This has been recognised by the EU Commission.
Have just released new announcement: construction will now not start until 2019. We should know by then whether the EPR will ever produce any electricity, with Olkiluoto and Flamanville both due to come on stream in 2018.
2.2 Media strategy
Must keep up a good front: have blamed the latest delay on the Chinese New Year. Crucial that CEO maintains the line: “We estimate the investment decision is very close.”
‘Stop Hinkley Point’ protesters occupied our offices in Bridgewater yesterday. Need to handle with care. Negative coverage increasing all the time, and people have started to talk about our ‘zombie reactors‘ at Hinkley Point.
Regrettably, our cohort of ‘green ambassadors’ (led by renowned UK environmentalist George Monbiot) has fallen silent. Very few advocates now for EPR. Even the FT has now joined the ranks of the critics stating “Politically painful it may be, but the case for halting Hinkley Point C is becoming hard to refute.”
Item 3: Extending the life of our UK reactors
3.1 Some good-ish news: we’ve negotiated extensions for four of our eight reactors in the UK: Heysham 1 and Hartlepool, through to 2024, and Heysham 2 and Torness through to 2030. There will be a significant financial outlay here, which has not yet been properly accounted for, but still relatively ‘small beer’ (as the English say) when looking at our overall finances.
3.2 The longer we keep these reactors ticking over, more or less safely, the better it will be. As soon as they come offstream, all the liabilities associated with decommissioning kick in. Reminder to the Board: managing our rising liabilities is now our most critical priority!
Item 4: Extending the life of our French reactors
Current operating fleet: 58 reactors. The Board has already signed off on a major life extension programme, with an estimate of €55bn of costs. Recent external assessments have put total costs at €100bn. Crucial to hold the line in the media at €55bn. In reality, we have no idea what the total outlay will be.
Item 5: Energy Transition Law (France)
5.1 This now represents A MAJOR RISK, with a direct mandate from our principal shareholder (the French Government) that the country must reduce its dependence on nuclear generation from 75% to 50% of total electricity demand by 2025.
5.2 The Cour des Comptes (state Audit Office) has just issued a new report challenging our long-held expectation that demand for electricity in France will continue to grow significantly through to 2025. If they are right, the energy transition law will mean:
- Worst-case scenario: 20 reactors (35% of the fleet) will need to close.
- Best-case scenario: 17 reactors (29% of the fleet) will need to close.
5.3 Lobbying relevant Ministers and Prime Minister to amend the Energy Transition Law now a TOP PRIORITY.
tem 6: Financial position
- Current share price: down 50% on January 2015 position.
- Current market cap: €22.5 (symbolically and very uncomfortably, less than the total projected costs of the Hinkley Point project).
- Our €37bn net debt load also dwarfs our €18.5bn market capitalisation.
- Current credit rating still at risk. Standard & Poors and Moody’s both looking wobbly.
- Growing concern about perceived splits on the Board, especially as regards increasingly forceful hostility from our Trade Union representatives to Hinkley Point.
Merde alors! And now the FT reports that they have two EDF sources telling them that the final investment decision will be delayed until 2017! Nous sommes trahis! It will be soon! Very very soon! Call security!
The Champagne has lost its fizz
See what I mean? Not exactly a cheery occasion, even with the best of French lunches, and it must be a bit like that Board meeting after Board meeting.
So now shift the focus to London, to the Department of Energy and Climate Change. Imagine for a moment the Permanent Secretary, metaphorically shitting himself as the single biggest element in the UK’s future electricity supply slides, slowly but ever more inexorably, down the pan. Wouldn’t he just love to get access to the (real) Minutes of EDF’s Board meetings!
The implications of all this for the UK couldn’t possibly be more severe. Initially, Hinkley Point was meant to be on stream by 2025, generating a whacking great 7% of total electricity supply. Earlier delays meant that this had already slipped to 2030. Now that the start date has slipped again, to 2019, at the earliest, that 2030 date looks insanely optimistic.
And that’s just the start. EDF’s meltdown at Hinkley Point is already having a significant knock-on impact on other would-be nuclear prospects in the UK – with Horizon, NuGen and even China General Nuclear Corporation beginning to get cold feet.
If Hinkley Point does go down the pan, a project that has been given every conceivable financial inducement by both the UK and the French Government, who the hell is going to invest in different but equally dodgy reactor designs?
If the Permanent Secretary isn’t shitting himself about such a state of affairs, one has to ask where he’s getting his metaphorical Imodium from.
Jonathon Porritt is Co-Founder of Forum for the Future, and a writer, broadcaster and commentator on sustainable development. He is also Trustee of the Ashden Awards for Sustainable Energy, and is involved in the work of many NGOs and charities as Patron, Chair or Special Adviser.
This blog was originally published on Jonathon’s website.
France’s nuclear giant AREVA in deep financial mess – again!
Nuclear group Areva in the red again http://www.euronews.com/2016/02/26/nuclear-group-areva-in-the-red-again/ Nuclear power group Areva has reported a full-year net loss of 2.038 billion euros, its fifth consecutive annual loss.
The French state-controlled firm blamed extra costs at a reactor project in Finland for half of that.
The rest was due to restructuring expenses and other costs related to market conditions including reduced demand for uranium, nuclear fuel and services.
The group said it has enough funds for this year thanks to bank loans and will sell five billion euros worth of new shares by the first quarter of 2017 to stay afloat.
Areva is 87 percent state-owned and the French government has promised to subscribe to the new share issue.
EDF in its financial woes, extends the life of four nuclear reactors
EDF extends life of four nuclear reactors Final decision on investment in Hinkley Point still pending, with analysts and activists casting doubt on the project, Guardian, Sean Farrell 16 Feb 16, EDF plans to extend the life of four nuclear power plants in the UK and has said it is close to announcing a decision on its investment in two new reactors at Hinkley Point.
The French energy company said the lives of the Heysham 1 and Hartlepool plants would be extended by five years until 2024, and the closure dates of Heysham 2 and Torness will be delayed by seven years to 2030………
EDF, which is 85% owned by the French government, announced the extensions as it reported a 68% plunge in profits last year and cut its annual dividend. The company, which has been hit by falling power prices, said net debt increased by €3.2bn (£2.5bn) to €37.4bn.
The fall in EDF’s annual net profit to €1.19bn was caused by a tripling of provisions, asset writedowns and other one-off items to €3.64bn. EDF surprised markets by cutting its dividend to €1.10 a share after paying €1.25 for the previous three years.
But the company restated the appeal of the £18bn Hinkley Point project in Somerset. EDF has delayed deciding on the plan due to funding problems, according to reports in France…….
Paul Dorfman of the UCL Energy Institute said EDF’s financial position cast doubt on the prospects for Hinkley Point. “Unfortunately, with the best will in the world, it may just not happen,” he told the BBC’s Today programme. “EDF shares have crashed to half their value a year ago; the budget for Hinkley alone is bigger than EDF’s entire market value.”
Greenpeace said EDF and the French government were in disarray over the cost and risk of the Hinkley project.
Doug Parr, Greenpeace UK’s policy director, said: “EDF’s accounts show growing debts and falling earnings. Hinkley is a bad investment and most people with an ounce of financial acumen have now come to realise this. George Osborne stands alone in defending Hinkley’s honour.” http://www.theguardian.com/business/2016/feb/16/edf-extends-life-of-four-nuclear-reactors-hinkley-point-decision
1 This Month
Shut down the radiation-damaged Heysham nuclear reactors now
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Say No to NASA’s Reckless Nuclear Reactor on the Moon
Say No to NASA’s Reckless Nuclear Reactor on the Moon
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