Introducing a new report from France’s nuclear auditor, released last week, Pierre Moscovici, the head of France’s Court of Accounts said: “There is still uncertainty on the ability of the French nuclear industry, despite its current strong efforts, to build new nuclear reactors within a time frame and costs that remain acceptable.”
EDF hopes to convince the French government to support construction of six new upgraded European Pressurised Reactor units (EPR 2), at an estimated cost of €46 billion ($52 billion), to replace ageing nuclear plants.
The Auditor’s 148-page report said the EPR nuclear reactor project is based on Franco-German cooperation initiated in 1989, from which Germany withdrew in 1998. From 2001, the newly formed Areva group developed a ‘turnkey’ EPR sales strategy, opposing EDF which sought to lead new nuclear development in France and abroad.
“The rivalries between these two public groups, which were not arbitrated at the time, resulted in the hasty launching of the construction sites of the first two EPRs, in Finland and in Flamanville,” the report noted. “This insufficient preparation led to underestimating the difficulties and the construction costs, which derived, 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.”
It added: “Despite a technological choice now proven in China and the improvement in the management of these major projects, the financial and technical gains expected from the EPR 2 project must be confirmed. The construction of new EPRs in France cannot in any event be envisaged without clear prior answers on the modes of financing and the place of nuclear power production in the electricity mix of tomorrow.”
The report also noted that EDF group investments in the UK and the construction site of Hinkley Point C are operations of high risk. “The profitability of the Hinkley Point project has been revised downwards several times since launch of the project The funding is insured by EDF, up to its participation in the capital of the project company, which weighs heavily on its financial situation.”
On China, it said the Taishan EPR reactors were put into service in 2018 and 2019, “but with a delay of five years on the schedule set during the order and an additional cost of 60%”. Other EPR export projects “are fraught with uncertainty” including those in India and the Sizewell C project in the UK.
Building a series of EPR2 reactors in France is a technological, economic and political choice. EDF aims to learn from the difficulties encountered in building EPR reactors and is reassured by the functioning of those in Taishan, “which validates this technological choice”, the report said, noting that EDF is now offering the new EPR2 as simpler and cheaper to build.
“However, one cannot establish with a reasonable degree of certainty that the building savings of the future EPR2 compared with the cost of construction of Flamanville-type EPR will materialise.” The report noted that “The financial issue is major: the cost of construction of three pairs of EPR2s was estimated at €46 billion in 2018. The decision whether or not to build future EPRs will have consequences until the 22nd century.”
The report said new modes of financing nuclear power reactors should be put in place. “EDF cannot finance building new reactors”, and will no longer be able to proceed without income guarantees. It concluded that a full analysis of the electricity mix by 2050 is needed, presenting the challenges and solutions taking into account security of supply, adaptation of transport networks and distribution of electricity, radioactive waste management, dismantling of power plants now in operation, and operating cost before taking any development decision on a new fleet of reactors.