France faces several billion Euro bill to keep nuclear reactors safe

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PARIS—  French President Nicolas Sarkozy has continued to champion nuclear power, even as neighboring countries like Germany, Switzerland and Belgium retreat, but even he must have enjoyed a particularly dreary breakfast this morning.   Opinion polls show support for atomic energy has dropped since Fukushima. Forty-percent of the French “are ‘hesitant’ about nuclear energy while a third are in favor and 17 percent are against, according to a survey by pollster Ifop published November 13”.

But the latest news may be even worse yet, as France‘s nuclear safety watchdog said Tuesday that Electricité de France SA will have to spend several billion euros to upgrade the country’s nuclear reactors to ensure they can withstand a serious natural disaster.

This has already been a tough year on the nuclear industry in France, where two separate events brought international headline attention, and the countries two nuclear heavyweights, AREVA and EDF both face serious financial strain in the coming years.   Despite the outward appearance both utilities like to put on, both companies have worked hard to keep the signs of financial hardship and future complications well under the surface.  EdF remains heavily in debt. Its profitability suffered during the recession which began in 2008. It made €3.9 billion in 2009, which fell to €1.02 billion in 2010, with provisions set aside amounting to €2.9

The report marks the latest sign of how the post-Fukushima environment is posing new challenges for nuclear power everywhere, including France, which garners an exceptionally high 75% of its power from nuclear energy. The ASN report comes amid a major emerging debate on nuclear power in the 2012 French presidential election.

The Nuclear Safety Authority (ASN) says industry operators must come forward by 30 June with measures they would take in response to floods and earthquakes, “preventing a serious accident or limiting its spread” and “limiting massive [radioactive] releases”.

EDF must build diesel pumps in special bunkers to ensure all its reactors can be cooled even in the event of a massive natural disaster, the report said.

It also proposes the establishment by 2014 of a rapid reaction force that would take charge within 24 hours of a nuclear accident taking place.

ASN President Andre-Claude Lacoste said the work and funding for the proposals was “quite massive” and would involve the recruitment of hundreds of people.

“If EDF estimates that what we are asking for is so expensive that it does no longer make it worth to operate one facility, it can decide to shut that facility,” Lacoste added, giving no detailled financial estimate of the works needed.

EDF, which is more than 80 percent owned by the state, will need to dig into its pockets to finance the work and the investment will likely increase the group’s production costs, which in turn may put some pressure on the government to increase state-set electricity tariffs.

“I cannot see how investments of several billions of euros would have no impact on production costs,” Lacoste said.

Source: Reuters

Source: BBC
Source: WSJ

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