France's nuclear power giant beset by setbacks

France’s nuclear security authority ASN (Autorité de surete nucléaire) last week declared that a multi-billion dollar Evolutionary Power Reactor (EPR) being built by Areva in Flamanville, Normandy has “a serious anomaly”.

The anomaly comes at a difficult time for the French company as it faces a host of setbacks related to the construction of nuclear power plants around the world. 

After ASN demanded tests on the new reactor to determine the cause of the fault, Areva reported 'a defect in the steel composition in some areas of the lid and the bottom of the tank of the EPR reactor'. 

More tests will be required of Areva in coming months in order to guarantee the safety of the Flamanville reactor and if it cannot be repaired, a complete replacement may be necessary.

In France, the state-owned Electricité de France (EDF) has commissioned Areva to design EPRs to increase the supply of electricity to consumers.

“Either EDF abandons the project or it takes out the vessel and starts building a new one… this would be a very heavy operation in terms of cost and delay,” Pierre-Franck Chevet, head of the ASN, told the French daily ‘Le Parisien’.

So what next for the EPR?

Overall, there doesn’t seem to be an easy fix.

Yannick Rousselet, a nuclear specialist at Greenpeace in France, says that replacing the tank in Flamanville is more difficult than one might think.

“The tank is the only element that you cannot move easily,” Rousselet told FRANCE 24.

“Historically, tanks were not designed with the idea of dismantling them. In addition, the one at Flamanville is already welded in place, and fixed to the pipe of the reactor.”

Because EDF is state-owned, tax payers will ultimately pay the bill for the expensive project, says Rousselet.

“It’s the French who will pay for the mistakes. Officials collectively took us to a dead end.”

International trouble

The EPR is a third generation nuclear reactor that was designed by Areva for Electricité de France (EDF) to be both more efficient and safe, but with the latest announcements, questions are being asked about its cost and safety. Currently there are four other such reactors being constructed worldwide - one in Finland, one in France, and two in China - all these projects have faced numerous scheduling and budgetry problems.

The Flamanville reactor has cost the French government more than double its original $3.5 billion price tag, and is already five years behind schedule.

To add to the company's troubles, China announced Thursday that it will not be loading fuel into the EPR nuclear reactors designed by Areva until safety issues are resolved. The country which boasts 23 nuclear reactors has a clean safety record and it continues to invest in nuclear energy with another 27 reactors under construction.

“In general, the Taishan nuclear plant is functioning effectively, and its construction is under control,” Tang Bo, an official at China's National Nuclear Safety Administration was quoted by the ministry as saying.

Billions lost at Areva

Thomas Olivier Leautier, a specialist in the energy sector at Toulouse School of Economics, says that the success of the EPR is crucial for Areva’s future.

“Areva’s financial situation is critical, the EPR is as crucial to them as the iPhone was to Apple. Their failure in Finland and now the problem in Flamanville could prove fatal,” Leautier told FRANCE 24.

In March, the company announced that last year it lost more than 4 billion euros.

Philippe Knoche, Areva's CEO, said that the company must adapt to “new market realities”.

“The scale of the net loss for 2014 illustrates the twofold challenge confronting Areva: continuing stagnation of the nuclear operations, lack of competitiveness and difficulties in managing the risks inherent in large projects. The group understands how serious the situation is,” said Knoche.