France’s Nuclear Decline “threat to Europe”

January 23, 2022

Bloomberg:

The long decline of Electricite de France SA isn’t only a political crisis for the government in Paris, it’s a growing economic threat for much of Europe.

The giant nuclear operator, once a source of national pride and reliable low-cost electricity, has become a nightmare for investors and an increasingly wobbly pillar of regional energy security. Technical problems at some of its largest reactors mean EDF is set to produce the smallest amount of atomic power in three decades, slashing France’s exports to neighboring countries. 

It’s a one-two punch for a region that’s already reeling from record natural gas prices, and shows little sign of abating. Instead of helping EDF deal with its problems, the French government is extracting billions of dollars from the company to shield households from high energy costs. 

“The generic issue with EDF’s reactors is leading to an unprecedented decline in production, which starts being worrying,” said Nicolas Goldberg, a senior manager in charge of energy at Colombus Consulting in Paris. “We’re going to have high prices on the European market for a while. Everybody’s going to pay more.”

France is located at the heart of Western Europe’s power grid. For decades, its fleet of nuclear reactors have been the continent’s largest electricity exporter, supplying the U.K., Spain, Italy, Switzerland, Belgium and Germany at times of peak demand. 

Now more than ever — with the price of coal, natural gas and carbon permits soaring — those countries could use some fossil-free electricity. Yet five out of EDF’s 56 reactors have been unexpectedly halted for checks and repairs related to corrosion and cracks on pipes in a key safety system. Traders are waiting anxiously to see whether safety reviews find similar flaws in more of the company’s plants. 

The timing is terrible, exacerbating what was already Europe’s most severe energy crisis since the oil shock half a century ago. Power prices in France are four times higher than usual for this time of year. That’s partly down to the surging cost of gas, but also due to scarce electricity supplies. 

Prices in Germany have been dragged higher too by shrinking power-supply margins. With more than two months of winter still to go, there’s a real risk that a cold day without any wind could test the system. 

“There is very little alternative capacity left in France once demand goes over 85 gigawatts and the interconnectors are maxed out,” said Jean-Paul Harreman, an analyst at research firm Enappsys Ltd. “During cold periods, nuclear outages have a very big impact on prices.”

Long Decline

Even before the latest issues, the performance of EDF’s French nuclear plants has progressively waned over the years. Technical problems have undermined the availability of existing plants, while its new flagship reactor in Flamanville is years behind schedule and and way over budget. 

“The French nuclear industry used to be at the forefront globally, which isn’t the case any more,” said Nicolas Leclerc, the co-founder of Omnegy, an energy consulting firm based near Paris. 

EDF’s nuclear output, which peaked at 430 terawatt-hours in 2005, fell to 335 terawatt hours in 2020 when the pandemic affected production and demand. That was also the year that French President Emmanuel Macron forced the utility to permanently shut down its two oldest reactors to stick to a pledge he made before his election in 2017. 

After rebounding 361 terawatt-hours last year, the company’s output will drop to between 300 and 330 terawatt-hours in 2022 because of the need to repair the reactors affected by the cracks, EDF said last week. Power generation continues to be hampered by the rescheduling of maintenance during by the pandemic. Some plants will also have to undergo a series of long halts for upgrade works that will extend their operational lifetimes. 

The British Isles has typically imported power from France through two huge cables running under the English channel. This winter, the reverse has been true, with the U.K. often exporting to France at peak times. 

On some days in December, when nuclear availability was limited and temperatures were very low, French imports rose as high as 13 gigawatts, about 15% of peak demand, according to Enappsys.

EDF is under growing pressure to restore its reputation as a reliable supplier. To address long-term threats to security of energy supply, France should reconsider its plan to halt a dozen reactors by the middle of the next decade, the country’s nuclear regulator said on Jan. 19.

Last month, French Ecology Minister Barbara Pompili summoned EDF Chief Executive Officer Jean-Bernard Levy to a meeting where she demand that the company improve power production. The government has also urged EDF to introduce best practices from nuclear operators in other countries, or different industries that also have to manage hefty maintenance programs.

It’s a big step down from the days when France was confident that its nuclear industry was the best in the world, but the severity of the power crisis has prompted some soul searching in the country. 

“Over the past decades, we may have rest a bit too much on our laurels while the output was dwindling,” Industry Minister Agnes Pannier-Runacher said at the Union Francaise de l’Electricite annual conference last month.

At the current stage of deployment, maintaining reliability with renewables alone remains a challenge. Existing nuclear plants are best kept in service as renewables continue to be built out, and transmission grids become more resilient.
Newer nuclear designs are coming, but they will have to compete first of all on price. My own belief is that by the end of this decade, when we see the first American small modular reactors, the renewable+storage solutions will have an insurmountable competitive edge.

Bloomberg:

Electricite de France SA plunged by a record as the French government confirmed plans to force it to sell more power at a steep discount to protect households from surging wholesale electricity prices.

The move could cost the state-controlled utility 7.7 billion euros ($8.8 billion) at Thursday’s market prices. EDF shares fell as much as 25% and were trading about 16% lower at 8.69 euros at 12:21 p.m. in Paris.

In a separate development, EDF said late Thursday that several of its nuclear power plants in France would be offline longer than expected for repairs, prompting the company to slash its output forecast from reactors by 8%. The setback threatens to drive up power prices as Europe is already facing a historic supply crunch.  

“Given the circumstances, EDF is likely to consider a capital increase,” JPMorgan Chase & Co. analyst Vincent Ayral wrote in a note. “We would recommend to avoid the stock for the time being.”

7 Responses to “France’s Nuclear Decline “threat to Europe””

  1. neilrieck Says:

    Shutting down reactors so they can switch to natural gas makes me wonder if anyone in Europe attended COP26 in Glasgow 8-weeks ago. What don’t they understand about reducing CO2 emissions NOW?

    Despite all the paranoia about nuclear energy, there have only been 43 deaths directly associated with reactors over the past 60 years. This is far lower than the many thousands that die each year from fossil fuel pollution. As scientist Edward Witten once told us in a 2014 lecture, the waste from nuclear energy might be a million times more toxic than waste from fossil fuels; but the volume of fossil fuel waste is more than a million times larger. You can never get something for nothing.

    http://neilrieck.net/docs/nuclear_energy_introduction.html

    • greenman3610 Says:

      agree operating nukes should continue to operate. There is an argument that if a nuke needs subsidies to stay open, whether that subsidy should be applied to new renewables, which go up much more quickly on average.

  2. J4Zonian Says:

    The fastest and best way out is first, efficiency, then encouraging wiser lives—where necessary, with taxes and other policies. Then building more clean safe reliable renewable energy, planned and coordinated by democratic governments to yield the best coverage with the least ecological harm. There are no other rational choices.

    • J4Zonian Says:

      The only energy threat to Europe is not having enough clean safe reliable renewable energy to meet people’s needs.

      And the danger of having another Chernobyl. Or Fukushima. Or Three Mile Island. Or Browns Ferry. Or Kyshtym. Or Tokaimura/s. Any one of which could have been thousands or millions of times worse. There have been hundreds of others, of various sizes and nearness to utter disaster. How can it make any sense to do this to ourselves and nature when clean safe reliable renewable energy works perfectly well and can more than meet our needs? And for less money!

    • rhymeswithgoalie Says:

      “There are no other rational choices.”

      I strongly suspect that rationality is a myth, or rather, some sort of Platonic ideal that has very little to do with sociopolitical systems.

      • J4Zonian Says:

        I agree, as far as the real reasons people do things. 95% of people do 95% of what they do for reasons they’re 95% unaware of; reasons that only make sense when one understands how the person’s history—childhood, circumstances, nationality, times, etc—has twisted them away from rationality. And only when they understand it themselves can they stop making irrational decisions.

        Rationality does exist; if people do destructive things we could simply stop them with legal, effective actions rather than be distracted by their Ted Cruz-like charm or Trumpian brilliance, by them making us feel powerless or confused for 40 years, or pointing out how evil and destructive the people doing good things are… Irrationality makes both the right and far right parties play their part in the system of mystification the oligarchic duopoly engages in.

        • rhymeswithgoalie Says:

          “…rather than be distracted by their Ted Cruz-like charm or Trumpian brilliance…”

          You owe me a new keyboard.


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