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Posts Tagged ‘EDF’


Thursday, January 20th, 2011

Nuclear Townhall
January 20, 2011

France has taken the idea of “moving industry offshore” and given it a new twist – plant small nuclear reactors in the seabed and pump the electricity back on land. Called “Flexblue,” the underwater system could provide a large portion of the world’s energy.
“The cylinder with the power plant inside would be lowered to the seabed at a depth of 60 meters (196 feet) to 100 meters, at a site between five and 15 kilometers from the coast,” Patrick Boissier, CEO of the French construction company, DCNS, tells Platts. “Undersea cables would bring the electricity to customers on shore.”  Boissier notes that three-quarters of the world’s population lives within 80 km of the sea.
DCNS, which does construction for the French Navy, will join Areva, EDF and the CEA research and development organization in exploring the idea, according to an announcement made in Paris yesterday. “The technical, economic and market feasibility study will be conducted over the next two years by 100-150 people from DCNS and the nuclear organizations, after which a decision could be made to build a prototype,” says Platts. “Boissier said a submerged power plant, unlike a floating one, would not be vulnerable to earthquakes, tsunamis, or floods, and would be far less vulnerable to voluntary attack.”  It would also have an unlimited source of coolant and would create a minimal environmental footprint. Areva already builds 100-MW small reactors for French submarines and aircraft carriers and said it would be fairly easy to adapt Flexblue from this prototype.
The French project should serve as a warning to American political officials, who also have big dreams about small reactors but are reluctant to streamline regulatory procedures that now make such initiatives a decade-long ordeal. The French are not the only ones who are going to be building small reactors. The rest of the world knows the technology too.

Read more about it at Platt’s



Wednesday, January 19th, 2011

Nuclear Townhall
January 19, 2011

EDF’s plans to spend $35 billion to upgrade its aging nuclear fleet are suddenly being threatened by a runaway subsidy for solar energy. “This is a time bomb EDF needs to defuse as soon as possible,” Bertrand Lecourt, an analyst at Deutsche Bank AG, told Bloomberg News. 

The program began two years ago when France established a “feed-in tariff” – a fancy name for a price support – that required the national utility to buy solar electricity at ten times the price of other sources.  Payments grew tenfold in two short years as shopping centers and other buildings all over France threw up solar panels.  Some farmers even built new barns just to take advantage of the program.  With money gushing out the door, the government cut the subsidy twice during 2010 but was finally forced to impose a three-month suspension in December. “We just didn’t see it coming,” French lawmaker Francois- Michel Gonnot told Bloomberg. “What’s in the pipeline this year is unimaginable. Farmers were being told they could put panels on hangars and get rid of their cows.”

The fiasco – similar to other government-led solar bubbles in Spain and the Czech Republic – has seriously impacted EDF’s finances. Shares dropped 20 percent in 2010, compared with a 3.7 percent decline in Europe’s Stoxx 600 Utilities Index. The Paris-based company now has a debt of $57 billion euros. 

It’s not hard to see why. The law requires EDF to pay 546 euros per megawatt-hour in 2011, almost ten times the spot price of 55 euros. Unlike Spain, which had visions of growing a solar industry, France’s solar bubble seems to have been created for purely altruistic purposes. “Most panels installed in France were made in China with a highly questionable carbon footprint,” Environment Minister Nathalie Kosciusko-Morizet told parliament last month, according to Bloomberg. He said public policy must “create jobs in France, not subsidize Chinese industry.”

Meanwhile, in the real world of energy production, EDF announced this week it has hooked up all 58 of its reactors to the French grid to deal with a 5 percent increase in demand over last year. Many reactors had been down for prolonged periods of maintenance. It marked the first time the utility had been at full strength since 2004.

Read more about it at Bloomberg News



Friday, December 31st, 2010

Nuclear Townhall
December 31, 2010


An unidentified source in a French news story says the Obama Administration may be holding back from awarding a federal loan guarantee to NRG’s South Texas project because it is in the Lone Star State. 

"According to one source, the Obama administration would prefer the loan guarantee to go to the Calvert Cliffs project in Maryland, which is a Democratic state, rather than to NRG’s project in largely Republican Texas," says this report from Agence France-Presse.  "According to the same source the DoE would also prefer the money go to EDF to avoid the risk of making the US nuclear sector over-reliant on Japanese technology."

The story is a boilerplate review for French readers spelling out Electricite de France’s difficulties in reviving Calvert Cliffs after its partner, Constellation Energy, dropped off the project two month ago. The comment comes far down near the end of the story.  Still, it has a ring of plausibility, since the Obama Administration is about to square off with Texas over the authority to issue air quality permits regulating carbon, beginning January 2.  On the other hand, it’s hard to see why relying on Japanese technology is any different from relying on French technology.  The real problem is that there is very little American technology remaining since the roadblocks to nuclear development erected in the past 30 years have driven most of the industry offshore.

Constellation walked away from Calvert Cliffs after the Congressional Budget Office estimated the chances of a loan default at 50 percent and asked a $700 million fee in compensation.  EDF has tried to revive the project but must find an American partner to satisfy a 1950s law saying non-American companies cannot own more than half of a commercial reactor.  NRG’s South Texas project has had its own troubles, with the City of San Antonio pulling out of the project when it became too expensive.  NRG is attempting to build two Westinghouse Advanced Boiling Water Reactors, a technology that is not the most advanced but has an old approval from the Nuclear Regulatory Commission.  The more advanced technology, the Westinghouse-Toshiba AP1000, now under construction at four sites in China, is still under review at the NRC after six years.   EDF’s Calvert Cliffs project would be an Areva’s U.S. Evolutionary Power Reactor (EPR), a duplicate of the European Power Reactor that Areva is constructing in France and Finland.  The only remaining U.S. design, General Electric’s Advanced Boiling Water Reactor, is now being marketed in conjunction with Hitachi.

If the Obama Administration wants to promote American nuclear technology, it will have to do more than block loan guarantees at South Texas.


Read more at Agence France Presse



Wednesday, October 27th, 2010

October 27, 2010
Nuclear Townhall

The American Nuclear Renaissance may turn out to be a foreign affair. Constellation Energy, one of America’s largest merchant energy companies, completely abandoned its efforts to build new nuclear plants this week — indicating it will concentrate all its efforts on new natural gas plants.

In doing so, Constellation dumped the entirety of its new nuclear holdings onto Electricite de France (EDF), the principally French government-owned global utility, which had been its partner in UniStar Nuclear Energy LLC. Included in the deal were properties adjoining two upstate New York reactors that could be used to build new reactors – or for natural gas.

Constellation’s exit was the strongest indication yet that the challenges set up by the recession, new nuclear economics, licensing uncertainties and federal loan guarantees are proving daunting for American private companies, which, unlike foreign nuclear companies, do not have access to government funding and must keep their eye on the near-term bottom line.

At the same time, the deal raised new hurdles for EDF to continue the Calvert Cliffs 3 project. The first and most obvious question is how EDF will deal with the 50-year-old law saying foreign enterprises cannot own nuclear reactors. While Constellation has indicated it will recruit a new American partner, anti-nuclear activists had already been making noises over EDF’s 49 percent ownership in UniStar and could cause more rumbles over EDF ownership and the application for Calvert Cliffs.

Constellation’s hasty exit is also an indication that the twin pincers of a) the demise of climate legislation and b) falling natural gas prices are dampening the pace of revival of nuclear energy in the U.S.  Ironically, the Constellation-EDF announcement came as Pennsylvania Governor Edward Rendell banned fracking for natural gas on state lands – indicating gas may not be such a safe bet either.

Calvert Cliffs 3 was one of the most promising new projects among the 34 applications made before the Nuclear Regulatory Commission for new build in the last three years. Calvert Cliffs 1 and 2, both 850 MW, are wildly successful and have broad support in the surrounding community. Besides providing Maryland with 60 percent of its electricity, they pay handsome profits to Constellation and have transformed Calvert County from one of the poorest counties in Maryland to one of the wealthiest. Wilson Parran, president of the Calvert County Board of Commissioners, often testifies at public forums in favor of nuclear energy.

UniStar Nuclear LLC was formed in 2005 as a joint venture between Constellation and AREVA to market AREVA’s 1,600-MW European Pressurized Reactor in the United States. In 2007, Constellation joined EDF to form UniStar Nuclear Energy LLC, which would build AREVA’s EPR at Calvert Cliffs. EDF paid $625 million and received a 9.5 percent share of Constellation as well.

In September 2008, Constellation’s stock was hit by its exposure to Lehman Brothers during the market meltdown and tumbled from $48 to $24 a share. Warren Buffett’s Berkshire Hathaway entered the picture, offering to buy Constellation at $26.50 a share for $4.7 billion. By December the deal had soured, however, as Buffett decided nuclear wasn’t such a good investment after all.

Instead, Constellation offered EDF a 49 percent share of UniStar for $4.5 billion. Besides an immediate $1 billion cash payments, the deal included an option for Constellation to sell EDF its aging coal and gas plants for $2 billion. Last summer, however, Constellation and EDF began squabbling over the option, since the value of the coal plants was rapidly declining in the face of EPA carbon regulations, scheduled to begin in January 2011.

The final blow came when the Federal Office of Management and Budget determined that UniStar would have to pay an 11 percent fee, amounting to $800 million, in order to obtain a $7.5 billion loan guarantee for the project to proceed. Constellation said the fee was unmanageable and pulled out of the project.

Public officials in Maryland immediately placed enormous pressure on Constellation and EDF to come up with some kind of arrangement, since the project means thousands of jobs and millions of dollars to the state economy – not to mention an assured supply of cheap electricity. However, Constellation remained adamant.

In the deal finally struck yesterday, Constellation will withdraw its demand that EDF buy its old coal and gas plants while throwing in four tracts of land adjoining existing reactors, two at Calvert Cliffs and two at the Nine Mile Point and R.E. Ginna sites in upstate New York. In exchange, EDF will shoulder the entire Calvert Cliffs project. EDF is in somewhat of a compromised bargaining position in seeking a new American partner since it cannot proceed on its own in the face of the law barring foreign ownership.

EDF has already declared losses of $500 million and is under criticism in France for its American investments. At the same time, EDF recently announced its intention to design its own reactor and challenge AREVA in building nuclear abroad.


Thursday, September 30th, 2010

AREVA, the world’s largest nuclear company, 80 percent owned by the French government, may be challenged for dominance in Europe shortly by its co-national and longtime rival, EDF, the French national utility.

Relations between the two companies have been strained over a two-year delay and cost overruns at Flammanville, where a 1,650-megawatt European Pressurized Reactor is being built, the first new French reactor in 20 years. AREVA is also having similar difficulties at Olkiluoto-3, Finland, where the original EPR project, first licensed in 2000 and originally scheduled for completion in 2009, is now three years behind schedule and 50 percent over budget. Despite the delays, the Finnish Parliament has authorized construction of a fourth reactor at the site.

Problems with both reactors – plus the loss to a South Korean in the sweepstakes to build four reactors in the United Arab Emirates – have caused soul-searching about France’s international nuclear effort. In July, the French government sought to bolster the national effort by having EDF raise its stake in AREVA from 2.4 percent to 7 percent and on Monday the government raised the figure to 15 percent.

EDF has now surprised everyone by suggesting it may begin its own reactor construction program instead. "It is true, . . . we and AREVA are unable to combine our engineering resources," a source inside EDF told Power-Gen Worldwide. The source said EDF’s reactors would probably be smaller, in the 1000 to 1500-MW range.

The rivalry between the two national corporations goes back to the earliest days of the French nuclear effort, when Charles de Gaulle created nuclear programs in two separate entities, EDF and the CEA (Commissariat à l’énergie atomique), the French equivalent of the Department of Energy.At the time, EDF was dominated by Communist labor unions, which welcomed nuclear energy as a triumph of the working class. AREVA was created in 2001 through the merger of Framatome, Cogma, and Technicatome, three construction companies. CEA now owns 80 percent of AREVA and the French government owns 85 percent of EDF.

Nuclear energy now makes up a considerable portion of the French economy. AREVA accounts for much of its international business and EDF’s exports 10 percent of its power each year to Germany and Italy, earning $8 billion a year, the country’s third largest source of foreign exchange.

Read more about it at PowerGen World Wide


Wednesday, August 18th, 2010

A report on the future of French nuclear energy — recently made public amid a swirl of Sarkozy Administration pronouncements about challenging development for "France Nuclear Inc." — recommends that France seize a global leadership position in building new reactors, while safeguarding its domestic industry and uranium supplies.

The report, entitled “The Future of the French Nuclear Industry,” states bluntly: “In a market that has become global and competitive, and after some regrettable vicissitudes, it is important that henceforth the nuclear industry reorganize itself to consolidate its strengths, reinforce its coordination and develop its exporting performance, its principal market in the future.”

Ordered by French President Nicolas Sarkozy in October 2009, the June 16, 2010 French report, written by Francois Rouseely, a former chairman of EDF (Electricité de France), suggests that France already maintains a leading role in the nuclear power industry worldwide, since a majority of France’s power is derived from nuclear energy.

But the Rouseely Report warns that France’s leadership role could be eclipsed in a global nuclear energy market that is growing as concerns over carbon emissions and problems with other forms of energy production grow. It encourages more support from the French government.

“The new industrial battle of civil nuclear power,” the report states, “is now so important that it requires nations to invest, at times abandoning their traditional positions, in strengthening vigorously and at the highest levels the business development of their major companies while also increasing intergovernmental agreements.”

Indeed, the report displays an unusual level of government-industry cooperation.  Corporate France maintains a leading position in the nuclear sector globally, and it empowers industrial leaders, such as the French companies AREVA, EDF and Alstom, Bouygues and Vinci to pursue new business abroad.

The report repeatedly stresses the need for safety in nuclear technology, noting that France has never experienced a nuclear accident.

But the main thrust of the study is nuclear expansion — calling the growing need for both replacement reactor construction at home and in new markets abroad as vital to its nuclear companies.

“The actors in the French nuclear industry (EDF, AREVA, ASLTOM) are the uncontested industrial leaders in France and are the ones to have first acquired expertise in this area,” the report states.  “On the international level, the challenge is newer and more difficult: France must capture a significant part of the nuclear plant market, a market that is extremely segmented and very competitive.”

The report recommends that EDF and AREVA be given the lead as France’s premiere nuclear concerns.

“As a rule, EDF must be the architect-engineer of the ‘French Team’ for constructing nuclear power plants, both in France and abroad.

“The architect-engineer should bring together all the expertise needed in all areas concerned and, in particular, should have the direct or indirect knowledge of an operator in order to optimize the implementation and to benefit from operating experience in all the details of the final design.”

AREVA, the study notes, “today consolidates the business of the nuclear fuel cycle, the design and manufacture of nuclear islands, and the operation of plants.”

The report also recommends that the two concerns unite their efforts in a “strategic imperative” when it comes to foreign contracts, as in China.

“This strategic agreement is an imperative necessity 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 be part of the necessary upturn of the French economy. A review of the current geopolitics of nuclear energy shows the fundamental role of China.

“EDF and AREVA have been actively present for many years in China. In this context, it is recommended that, with their experience, AREVA and EDF offer the Chinese players a contract of partnership, under the auspices of the government.”

On the international front, the report suggests that, “Simultaneously, the mission of the International French Nuclear Agency (AFNI) must be expanded to develop a French international nuclear consulting program. In effect, each state desiring to develop civil nuclear power, or considering developing a fleet of nuclear power stations must create or reassess ‘a safety baseline.’ This baseline would be made up of a series of standards, plans and procedures competing for the safety and security (interior and exterior) of nuclear facilities and their site. France is in a position to offer its cooperation in the establishment or improvement of these standards.”

The study suggests that current problems encountered on projects by French nuclear companies must be quickly addressed. These include Finland’s Olkiluoto Nuclear Power Plant, an AREVA project that is over budget and behind schedule, and in Flamanville which EDF manages in France, which has also seen schedule slippage.

While the report is remarkable for its candor about the problems with the EPR reactor construction, it also focuses on nuclear market prospects in the United Kingdom, where EDF is poised to become one of the first developers of the next generation of nuclear plants.

The report is all together silent on the U.S. market. However, EDF is a 50 percent owner in Constellation Energy which has partnered with Areva to form Unistar, LLC, which currently has a COL license application under review by the NRC for a new EPR at the Calvert Cliffs site in Maryland.

Unistar also has a DOE loan guarantee application pending at DOE and has been struggling in the face of recent negative publicity over the EPR cost and schedule overruns at Olkiluoto and Flamanville. It is also hobbled by what appears to be a trifecta of unfriendly economic business trends — slower electricity growth, lower future gas price projects and the extended lack of carbon pricing.

The report also notes that in France, public acceptance of nuclear power is vital to the industry’s future, as are concerns over the treatment of nuclear waste.

“For the French, the trump card of nuclear energy is its essential contribution to the energy independence of France.

"Since 2005 more than 70% [of the population] recognize that nuclear power allows us this independence. 7 out of 10 French citizens think that the nuclear power is good for our economy and creates jobs…

“The management of nuclear waste requires the development of a communication effort: for 60 to 70 percent of the French, it is the most compelling argument against nuclear power.”

The report addresses all aspects of France’s nuclear industry, from reactor production and sales to “back end” storage of nuclear waste. Regarding the latter, France faces the same dilemma the U.S. is currently now wrestling with: a deep geological repository.

French law requires “a legal regulatory” deadline of 2015 for the authorization and implementation of the plan for a deep storage center project, according to the report. Currently, France stores nuclear waste above ground and it is often cited by opponents of the U.S. Yucca Mountain repository as a model for an alternative to deep geological storage such as Yucca.

In fact, as the report notes, France is also pursuing deep storage as a permanent measure.

To promote the French nuclear industry, the report suggests that, “The strategic importance and magnitude of the issues to be addressed as well as the leadership and coordination required to implement a nuclear program justifies the creation of either a Department of Energy headed by a full minister, or a secretary general attached to the Presidency of the Republic."

Finally, the report recommends greater cooperation among French nuclear companies when it comes to Research and Development.

“To facilitate greater efficiency of research and development in the French nuclear industry, the coordination between different actors, mainly CEA, EDF and AREVA, must be strengthened.

"It is thus proposed that a strategic R&D plan on the national level be developed with CEA, the relevant ministries and the key industries."


Wednesday, August 4th, 2010

Two of the most promising new build projects announced severe cutbacks this week as hope that the Department of Energy will soon announce any new loan guarantees begins to fade.

NRG, of Princeton, N.J., announced it would reduce monthly spending to $1.5 million a month, down 95 percent from two months ago, at its South Texas project near San Antonio. Total spending for the year will drop from an anticipated $302 million to $186 million. Although CEO David Crane said he is still confident the project will go forward, NRG is obviously pulling back on its commitment. NRG stock rose 3 percent after the announcement.

Constellation Energy in Maryland made virtually the same announcement last week when it said it is suspending all new spending on Calvert Cliffs III until the loan guarantee issue is resolved. Constellation even suggested it might drop the project altogether if a decision from the Department of Energy is not forthcoming by the end of the year.

EDF, the French national utility that is Constellation’s partner on the project, reported a big drop in earnings last week, mainly because of losses on Calvert Cliffs. The two companies have already spent $600 million on the project.

Hopes that any new loan guarantees may be forthcoming from DOE are guarded. The Department has committed about $9 billion of its authorized $18.5 billion to the Vogtle Plant in Georgia, being build by Southern Nuclear Company.  The remaining loan guarantee pool is not sufficient to fund both South Texas and Calvert Cliffs — forcing DOE to chose between the two projects or further delay any announcement until FY2011 budgets are finalized with fresh funding. 

In February President Obama proposed raising the loan guarantee fund to $54 billion but Congress has not yet fully acted on his suggestion. The Senate nixed an additional $9 billion in loan guarantee funding from a proposed FY2010 supplemental funding bill.

Read more at the WSJ…

…and the Baltimore Sun


Friday, July 30th, 2010

EDF, the French national utility company, is expected to announce today that its Flammanville reactor, already behind schedule and over budget, will cost an addition 1 billion Euros and be delayed another two years.

In its semi-annual financial statement, due out today, EDF is expected to escalate anticipated costs to 5.0 billion Euros. The 1,630-megawatt reactor – Areva’s vaunted EPR design – was originally scheduled to cost 3.3 billion Euros and be finished by this year. Cost estimates were raised to 4.0 billion Euros in 2008 because of rising material costs and full operation postponed until 2012. It is now scheduled for 2014.

Areva has had similar difficulties in Finland with its Olkiluoto reactor, an identical design. The project is taking six years to build instead of the original three and costs have nearly doubled from the original 3.0 billion Euros to 5.7 billion.  Areva is suing its customer, the Finnish utility TVO, for allegedly causing 1 billion Euros in cost overruns.

Read more at Nuclear Power Daily