France’s future: export

8 December 2010




In 2009, French president Nicolas Sarkozy set up a commission to review the French public-sector nuclear organisation, after a consortium that included government-controlled firms EDF and Areva lost a competitive tender for the UAE nuclear plant. The commission, headed by former EDF president François Roussely, reported back in spring 2010; the executive summary was published (in French) in July, and is summarised here. A full (rough) translation is on www.tinyurl.com/2uvojb5

Based on its civil nuclear success, France and its industry can legitimately claim to occupy a prominent place in the current renaissance of nuclear civilian world. However, long recognized as a model in the sector, France is seeing its image degrade. The credibility of the EPR reactor design and the ability of the French nuclear industry to succeed in building new plants have been seriously undermined by difficulties encountered at Olkiluoto 3 and Flamanville 3.

Concurrently, while the world average availability of nuclear power plants—measured by the availability coefficient Kd—has increased significantly over the past 15 years, the availability of French nuclear power plants has decreased sharply in recent years. It is therefore important to rectify the situation quickly, taking emergency measures where necessary, and enable the French nuclear industry, which has the abilities, to position itself in the new civil nuclear power markets...

For the French nuclear industry, medium-term prospects are emerging very clearly: because of the French reactor lifespan of greater than 40 years, let alone 50 years, the markets in which the French nuclear industry can compete are mostly related to export...

The EPR reactor is among the best models of 3rd generation reactors and is at present uniquely at the heart of the French nuclear industry. How can we sustain an export policy with only one product?

The complexity of the EPR comes from design choices, notably of the power level, containment, core catcher and redundancy of safety systems. It is certainly a handicap for its construction, and its cost. These elements can partly explain the difficulties encountered in Finland or Flamanville. The EPR should therefore be further optimised based on feedback from reactors under construction, by review of past achievements. This EPR optimisation programme would be lead jointly by EDF and Areva, in conjunction with ASN, with a view to make the detailed design as safe [as the current design].

In parallel, smaller models than the EPR may better suit the needs of some customers. It is therefore necessary to complete the French package and offer several competitive product families on the international market. ATMEA 1 may be one of these products...

Finally, the experts spoken to for this report have reaffirmed unambiguously their conviction that there is no question of the French nuclear industry selling cheap reactors, in which the low cost results in a lower degree of safety compared with supposedly equivalent models...

Nuclear governance in France must be tightened to ensure the mastery of the many issues (strategic, political, industrial) in the sector, and a real monitoring of the French nuclear export offering.

The strategic importance and magnitude of the tasks of reflection, leadership and coordination to implement in the field of nuclear justify the constitution of a Ministry of Energy headed by a full minister, or a general secretariat linked to the Presidency of the Republic. The department or the general secretariat will be based on an identified central government direction, have all the skills required to carry out its mission, and its own budget. It would provide the secretariat of the Nuclear Policy Committee, over which presides the head of state...

The failure in the UAE has particularly demonstrated the French actors’ organisational limitations when faced by a new proposal from a first-time buyer. The outcome might have been different if the UAE’s position has been better known, had there been an objective analysis of demand, leading to a proposed offer under the leadership of EDF.

The practical side of exports should be reconsidered, keeping in mind that accessible markets are segmented and vary in kind, depending on whether one is dealing with a country with experience of nuclear electricity generation or a first-time buyer. It is necessary to form an interface that can, for everyone, identify and record applications, interact with the potential client on the desired contract model, and then reply with a position in principle and a choice of organization with identification of the leader and the type of offer wished. This interface

is not designed to do deals, but only to propose the organization best adapted to the satisfaction of the customer’s request...

As a rule, for projects of construction of nuclear power plants, both in France and abroad, EDF must be the architect-engineer of ‘Team France’... In today’s global market, France’s unique advantage is to be able to integrate in its bid the unique experience of the operator EDF, which is also responsible for overall engineering of the project...

The creation of a company from the mine to decommissioning is an idea that has provoked debate in its time, though less today. On the one hand, [Areva] is able to offer a complete service to customers. On the other hand, the diversity of levels and cycles of investment would spread the financial risks and ensure reasonable profitability over the entire cycle. Areva’s integrated model is based on the cyclical character of a business portfolio that is diversified and consistent, but it does not excuse the rationalization of the company and better cost control.

From now on, it is essential to give a new dynamic to a strategic alliance between EDF and Areva. EDF is the main client of Areva, and Areva is EDF’s leading provider. The links between the two groups, inherited from the past and based on industrial and technological proximity, appear to have weakened in recent years, when shared objectives of general interest have given way to business objectives. EDF has launched a process of diversifying its suppliers (mainly in the front end of the fuel cycle); Areva has worked to expand its portfolio of foreign clients. Both approaches, although they have their logic, have nonetheless helped to create the distance found today.

Now it is expected that both state-owned companies will be able to guarantee customers’ needs by developing synergies when required. This may mean carrying out joint studies and preliminary analysis of certain subjects, creating reciprocal transparency and within pre-defined fields giving each other preferential treatment, such as freedom to act or to decide on a certain course of action or common policy. Only serious discussions and the joint will of both general management teams, free from doubts, will enable the formation of a strategic partnership. This agreement is a strategic imperative for France to effectively unite its civil nuclear industry internationally, to prepare for the challenge of the renewal of French nuclear power plant fleet, to accompany the necessary revitalization of the French economy...




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