Stop Hinkley Press release:
17 September 2010
Doubts over Hinkley C economics
Doubts over debt-ridden EdF's plan to export the ailing French EPR reactor to Somerset have been raised by the French Government and a UK energy professor.
Energy expert, Professor Stephen Thomas, has written hard-hitting statements on the risks surrounding EdF's plight, suggesting Hinkley C may never be built, or worse still just half-built and dependent on a Government rescue.
On the risks of importing the French nuclear project he says:
"The French nuclear power industry is in crisis on three counts: its new reactor technology, the Evolutionary Power Reactor (EPR), is proving expensive and difficult to build and gaining safety approval is proving slow and problematic; the existing 58 reactors are far less reliable than its European and US peers; and its flagship nuclear companies, the utility Electricite de France (EDF) and the reactor vendor, Areva are struggling to control their levels of debt … This experience suggests that, far from being a model to emulate, the French experience is a cautionary tale of overdependence on nuclear power and on the state becoming too embroiled in commercial decisions." http://www.digitaljournal.com/pr/109960 9th September:
Professor Thomas was even more forthright in his recent briefing to Parliament where he says, “ The issue the British government needs to face up to, is whether the EPR design is salvageable.” and continues, “Unless things start to go right for the EPR soon, the UK is in danger of backing a design that could prove unlicensable, unaffordable and unbuildable .” . http://www.parliamentarybrief.com/2010/09/really-mr-huhne-you-should-brush-up-on-your-french
French Government report slams the EPR
The French Government is so worried by delays to two new nuclear projects in Finland and France that it commissioned a report by a former CEO of EdF. The Roussely report published in July was damning. It said experience with Olkiluoto and Flamanville had ‘seriously shaken ... the credibility of the EPR model and of the capacity of the French nuclear industry to succeed in new nuclear plant construction.' http://www.world-nuclear-news.org/C_France_considers_its_position_2807101.html 28th July
It slammed the EPR as too complicated, highlighted earlier this year by the Dubai government turning down the so-called Generation 3 reactor design in favour of a previous generation design on offer by a Korean company. Indeed the Control and Instrumentation system in the EPR has been criticised in an unusual joint communiqué by UK , French and Finish nuclear safety regulators. The US regulator has also recently added their weight to the concern that a malfunction in the normal control system could result in the shut-down system failing.
The UK Nuclear Installations Inspectorate has said this may be part of a list of ‘exceptions' or conditions to any licence they provide to operate the reactors. So EdF would have to resolve this entrenched problem before the eventual start-up. There are considerable uncertainties here as the only other available ‘hard-wire' alternative is from the forty year old N4 design.
Unfortunately Roussely could offer no effective answer to the EPR's potentially financially fatal complexity other than to try and learn from the errors at Olkiluoto and Flamanville.
EdF's spiraling debt and reduced credit rating
EdF's annual report last month showed a spiraling debt of 56 billion Euros compared to last year's debt of 36 billion and against a profit of just 1.7 billion this year. It is a highly 'levered' company and their credit rating has consequently been reduced from AAA to A. The loans to pay this ‘mortgage' are not available cheaply from the French Government, as widely believed, as this would foul EU competition law. They must be found on the open market. The current sale of their energy distribution arm will settle just 5 bn euros of their debt but may jeopordise their credit rating further as the relatively ‘safe' distribution section of their enterprise has vanished, leaving more risky nuclear production as a greater proportion of its business.
Moreover EdF must also set aside funds to pay for repairs and maintenance to its ageing fleet of French reactors. 37 reactors are due for ten-year reviews by 2015 for which each must be shut down for three months when they will be thirty years old. Upgrading them after that to run for 50 or 60 years will cost EdF an estimated 500,000 million Euros for each reactor.
Adding to EdF's financial worries is its expensive £12 billion investment in the ageing fleet of British Energy reactors of which more than a quarter are currently off-line including their flagship and newest reactor Sizewell B, expected to be under repair for six months from its breakdown in March. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/HeadlineNews/Nuclear/6411367/
European Pressurised Reactor in crisis
TThe risks are compounded by difficulties experienced with the current building of two single EPR reactors in Olkiluoto , Finland and Flamanville in France . The Olkiluoto project, run jointly by Areva and the Finnish utility TVO, has run into scandalous numbers of construction mistakes, about 3,000 in a count taken last year and recorded by Greenpeace Sweden . It is three years overdue and a vicious legal fight is ongoing between the two major constructors over whose fault this is. If TVO lose the battle they are likely to go bankrupt. The Flamanville project is two years over-run. The cost of building a single EPR is now estimated by EdF at 5 billion euros, up from 3 billion originally. http://www.bloomberg.com/news/2010-08-30/edf-has-welding-problems-at-flamanville-epr-reactor-french-watchdog-says.html
But Energy Minister Charles Hendry puts the figure at an alarming and potentially crippling, Euros8 billion or £6 billion. http://www.bloomberg.com/news/2010-08-25/edf-rwe-may-spend-9-3-billion-per-new-nuclear-plant-in-u-k-hendry-says.html