The liabilities of Électricité de France (EDF) − the biggest electricity supplier in Europe, with 39 million customers − are increasing so fast that they will soon exceed its assets, according a report by an independent equity research company. Bankruptcy for EDF seems inevitable − and if such a vast empire in any other line of business seemed to be in such serious financial trouble, there would be near-panic in the workforce and in governments at the subsequent political fall-out. But it seems that the nuclear-dominated EDF group is considered too big to be allowed to fail. So, to keep the lights on in western Europe, the company will have to be bailed out by the taxpayers of France and the UK. The French government, facing elections next spring, and the British, struggling with the implications of the Brexit vote to leave the European Union, are currently turning a blind eye to the report by AlphaValue that EDF has badly under-reported its potential liabilities. Mycle Schneider, a Paris-based independent international consultant on energy and nuclear policy, says: “The French company overvalues its nuclear assets, and underestimates how much it will cost to decommission them. “However, EDF’s biggest problem is the cost of producing power from these ageing power stations. The cost is greater than the wholesale price, so everything they sell is at a loss. It is impossible to see how they can ever make a profit.” He says that is not the company’s only problem: France has not dealt with the problem of nuclear waste, and has badly underestimated the cost of doing so. Schneider says: “With German electricity prices going down and production increasing in order to export cheap electricity to France, it is impossible to see how EDF can ever compete. It is really staggering that no one is paying any attention to this.”
Climate News Network 2nd Dec 2016 read more »
THESE are difficult times for Electricité de France (EDF), the country’s quasi-monopolistic electricity provider, serving 88% of homes. Outages at no fewer than 18 of the 58 EDF-owned nuclear reactors that provide three-quarters of France’s electricity have meant a slump in production: the company says annual nuclear output could fall to 378 terawatt hours (TWH), from 417 TWH last year. Eight reactors are currently lying idle and several may not restart for weeks or months. Power stations are burning coal at a rate not seen since the 1980s. As electricity imports and prices soar, officials are having to deny that a cold snap could bring blackouts. The cause of the crisis—possibly faulty reactor parts throughout EDF’s fleet—suggests it may not be easily contained. France’s nuclear regulator, the Autorité de Sûreté Nucléaire (ASN), this summer ordered urgent tests of reactor parts, mostly bases of cylindrical steam generators. Inspectors are worried about high carbon levels found in steel forged by Creusot Forge, which is owned by Areva, another French firm, and by Japan Casting & Forging Corporation, a Japanese supplier. In some pieces carbon deposits are over 50% above permitted levels, risking fracture in case of a sudden change in the temperature of the steel. The regulator will rule on Flamanville’s future in mid-2017. More tests or design changes may mean putting off its opening far beyond 2018.That would also deliver another blow to France’s reputation in nuclear power. The only other EPR in Europe, that at Olkiluoto, Finland, is years overdue and three times over budget. Delays might also hinder EDF in its plan to build two EPRs at Hinkley Point, in Britain, for £24.5bn ($30.7bn). British loan guarantees need certain conditions to be met, and these reportedly include seeing Flamanville operate by 2020. Steve Thomas, an energy expert in London, concurs with the opinion of many in the nuclear-power industry when he calls the EPR a dud. EDF is pushing on regardless, but the financial strain is mounting. In March, EDF’s then chief financial officer, Thomas Piquemal, quit, calling Hinkley Point unaffordable. The future looks bleak. Some four-fifths of French nuclear plants were built in a decade from the late 1970s. The plants have a 40-year lifespan, meaning that several a year face retirement over the next decade. Energy planners have assumed there will be extensions to 50 years or more. But the ASN may hesitate after the forging problems, or impose higher costs. Cyrille Cormier, a nuclear engineer who is now at Greenpeace, a campaign group that opposes nuclear power, says a total refit could cost EDF an extra €60bn-200bn.
Economist 3rd Dec 2016 read more »