Nick Butler: The cloud of doubt around EDF’s long-planned new nuclear plant at Hinkley Point in Somerset continues to grow. In a remarkably frank interview the French energy minister, Segolene Royal has said that the company may have been “carried away” by its enthusiasm for the project and has joined the chorus of internal staff and engineers in warning of the risks to EDF’s finances from going ahead. But although Hinkley inevitably gets all the attention in the British press, EDF’s real problem is to be found in the half constructed plant at Flamanville on the Cotentin Peninsula on the other side of the English Channel. The prototype development of the European Pressurised Reactor (EPR) at Flamanville began in 2007 and should have been operational by the end of 2012. In 2009, EDF in the UK told the British government that the experience of building Flamanville would be invaluable in reducing costs at Hinkley. It has not quite turned out that way. The Flamanville project is six years behind schedule and 7bn euros over budget. The most recent problem has been the identification of weakness in the steel which makes up the reactor vessel. That weakness is now being investigated by the French regulatory authorities and it was quietly announced a few weeks ago that those tests were being extended by the French nuclear regulator the Autorite de Surete Nucleaire on the advice of its permanent group of experts. The scale of the risks to EDF if those tests identify a serious problem is hard to exaggerate. Building work has continued around the reactor core despite the uncertainties. If the concerns prove to be serious the whole structure at Flamanville will have to be dismantled and work will have to start again. The costs would be overwhelming and would be compounded by the inevitable loss of confidence in all the other prospective EPR projects. That includes Hinkley but also extends to EDF’s aspirations in the Middle East and its ambitions in China. Two new plants under construction at Taishan are using the same reactor vessels. One can only imagine the reaction of the Chinese to the news. The real problem for EDF is the corrosive loss of confidence in its technical capability. For the sake of its minority shareholders, who have seen their shares fall in value by almost two thirds over the last three years, as well as its prospective customers around the world EDF should now publish in full all the studies which have been undertaken on what has gone wrong at Flamanville.
FT 14th May 2016 read more »