Australian news, and some related international items

France’s “flagship”nuclear project Falamanville – more costs, more delay

EDF adds further €1.5bn to Flamanville nuclear plant costs  French energy group also confirms latest delay to opening of long-awaited project.

David Keohane in Paris 9 Oct 19, French energy giant EDF announced increased costs to its long-troubled flagship nuclear project at Flamanville on Wednesday as it confirmed delays to the opening of the plant due to faulty weldings. The company said construction costs would rise by €1.5bn to €12.4bn and the loading of nuclear fuel would be delayed until the end of 2022, which had previously been scheduled for the end of 2019 with commercial activity starting in 2020. The group, which is 83.7 per cent owned by the French government, had flagged the delays at the plant in north-western France to the end of 2022 during its half-year results in July. Flamanville was originally expected to cost €3.3bn and start operations in 2012.

Analysts at Morningstar said that the increase in costs was in line with estimates but warned “the worst-case scenario has not gone away totally” — alternative more expensive plans — since EDF had to get approval for its repair proposals by the end of 2020. This involves the use of remotely operated robots. Flamanville is considered a litmus test for the next-generation European Pressurised Reactor technology. One EPR is already up and running in China, but Flamanville remains the bigger test for EDF because it is 100 per cent owned by the company and the French regulators are known to be exacting. There are two other EPR projects being built in Europe: The Olkiluoto project in Finland, which is more than a decade late, and the UK’s Hinkley Point, which EDF warned in September would cost an extra £2.9bn to complete.

The news comes as EDF pushed back the formal presentation to the government of an internal reorganisation plan, called Project Hercules, which had been due by the end of the year, at the request of French president Emmanuel Macron.  Project Hercules will create a government-owned mother company, EDF Bleu, containing the nuclear assets as well as hydroelectric assets. Bleu’s main subsidiary, EDF Vert, will house renewable energy, the networks and the services businesses and will be listed, with some 20 per cent to 40 per cent sold to raise funds.

The quid pro quo for the reorganisation, as seen by EDF, is a new regulated price for nuclear energy, assuming it can be agreed with Brussels. However, Project Hercules has been deferred due to delays in discussions with Europe. In an internal email to staff sent late last week, EDF chief executive Jean-Bernard Lévy said “a reorganisation without better regulation would not be enough to give EDF the financial means to play its role in the investments necessary for the success of [France’s] energy transition”.

October 10, 2019 - Posted by | General News

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