Nuclear industry news

20.06.2014

France battles to sell its nuclear reactors abroad

 

The French nuclear industry is struggling to convince foreign buyers to purchase its nuclear reactors, despite quality technology and enhanced safety and operating expertise, because it is falling short on financing offers and training programs, officials from the French nuclear sector said last week at a conference in Paris. The industry participants cited unattractive commercial terms for reactors, a limited training program for nuclear energy newcomers and the fact that the country is starting to doubt its all-nuclear generation choice as being among the challenges.


“It’s not a problem with the technology, but rather about the way projects are organized. And concerning exports, other countries have the means to finance export projects, while France is unfortunately not at all competitive,”
Philippe Pradel, GDF Suez vice president for nuclear energy, told attendees at the conference.

 

Gerard Kottmann, president of the French nuclear export lobby Aifen, said it was “very urgent” for France to find a solution to finance projects abroad because even oil-rich countries such as Saudi Arabia were in need of financial packages. The kingdom plans to build 16 reactors in the next 20 years at a cost of more than $80 billion.

 

“The reason French financing for nuclear reactors falls short is because the French state applies normal rates for state loans, whereas competitors like Russia’s state-owned nuclear group Rosatom offers much more advantageous loans,” Kottmann said.

 

The differential for interest rates is two percentage points, Kottman said. “You can imagine the chunk of money that represent spread on 15 or 20 years.”


One solution under study by the government is for the French state to shift its loans on the financial market on that type of project, Kottman said. Such a system would allow buyers to avoid the traditional and costly banking system, he added.


Dominique Miniere, deputy director of EDF’s production and engineering branch, told the conference that competitors such as Russia’s state-owned Rosatom were winning many international tenders thanks to “a very complete offer ranging from training to the full financing of projects.”


“France’s training program, a key element for first buyers, is not adapted. France’s academic world is very fragmented and very individualistic,” Kottmann said. France’s plan to reduce the nuclear share of its electricity mix to 50 percent by 2025, from 75 percent currently, will not help its nuclear industry as it attempts to sell reactors to other countries, the officials added.


The so-called energy transition bill, which will be presented to the ministers’ council the week of June 16, is expected to outline the way France will reach that presidential goal. If electricity consumption remains flat in the next few years, France could need to shut as many as 20 nuclear reactors out of a total of 58.


“The worst that could happen would be for France to give the impression abroad that it is doubting its own nuclear industry,” said Francois-Michel Gonnot, president of France’s radioactive waste agency Andra. “It’s already hard with the tough competition from Russians, Koreans and the US,” he said.

“We can’t be strong on the international scene if we are not strong at home,” Miniere said.


French companies are involved in the construction of four EPRs: two at Taishan in China, one at Olkiluoto in Finland and one at Flamanville in France. While the reactors in China are on schedule, both projects in Europe are years delayed and plagued with cost overruns. 


The French EPR reactor project, operated by French stateowned utility EDF, will now cost Eur8.5 billion ($11.53 billion) and start in 2016. The initial cost in 2005 was Eur3.3 billion and start-up was scheduled for 2012.

 

 

Source: www.platts.com