The transaction includes the manufacturing of conventional island equipment for new nuclear power plants as well as related maintenance and upgrade activities for existing nuclear plants outside of the Americas. As part of EDF, this business will be called Arabelle Solutions

GE Vernova retains a services-focused Steam Power business, including services for more than 100 GW of nuclear turbine islands in the Americas region. It also retains GE Hitachi Nuclear Energy, a lifecycle provider for reactor islands, global nuclear fuels, and services, which is working to deploy commercial, grid-scale SMR technologies. GE Vernova said it remains committed to the nuclear sector and continues to invest in next-generation technology.

Financial terms are not being disclosed, the companies said.

GE and EDF signed an exclusive agreement for EDF to acquire part of GE Steam Power’s nuclear power business.

The deal would bring together GE’s nuclear steam turbine technology and boost French-based EDF’s commitment to the nuclear power sector.

In sync with the deal announcement, French President Enamel Macron said his country will build at least six new nuclear reactors in the decades to come. He effectively placed nuclear power at the core of France's push for carbon neutrality by 2050.

Macron said the new plants would be built and operated by government-controlled EDF and that tens of billions of euros in public financing would be used to finance the projects and safeguard EDF's finances.

EDF previously has estimated the cost of six new reactors at about $60 billion, depending on financing conditions. The first new reactor, an evolution of the European Pressurised Reactor (EPR), would come online by 2035, Macron said on February 10. Studies for a further eight reactors beyond the initial half-dozen new plants would be launched.

Last September we highlighted reports about GE potentially selling its nuclear turbine business to EDF. The companies have long partnered on nuclear power projects. More than three years ago, GE and EDF signed a strategic cooperation agreement for the planned construction of six reactors in India.

Included in the transaction would be GE Steam Power’s conventional island equipment for new nuclear power plants, including the Arabelle turbine, along with associated technology for future nuclear plants, like the next generation of EPRs and small modular reactors (SMRs). 

Activities involved in the deal are based in about 15 countries, GE said, with nearly 70% of the workforce in France, including at GE Steam Power manufacturing sites like Belfort and La Courneuve.

Financial terms of the transaction were not disclosed, but GE Steam Power’s nuclear turbines business has been estimated at a value of around $1.2 billion, according to previous reports.

GE said it plans to retain services of more than 100 GW of plant activities in North America. GE Hitachi Nuclear Energy (GEH) plans to deploy Canada's first commercial, grid-scale SMR. In December, Ontario Power Generation (OPG) selected GEH to supply the BWRX-300 SMR for the Darlington New Nuclear Project. Darlington is the only site in Canada currently licensed for a new nuclear build and could be completed as early as 2028.

GE’s nuclear steam turbines are installed in half of the world's nuclear power plants, including all of EDF’s nuclear plants in France.

In early January, EDF said that the Flamanville 3 reactor would likely cost 300 million euros ($343 million) more than forecast and that fuel loading was being pushed back by up to six months. The project is more than a decade late and could cost 12.7 billion euros ($14.42 billion). Its expected cost has more than quadrupled from the first estimate made in 2004.

Old Dominion Electric Cooperative and EDF Renewables North America announced they will expand their development efforts to add 15 new solar projects across the cooperative’s service territory in Virginia, Maryland and Delaware. The combined projects will have a capacity of more than 60 MW and be in service by next year, according to the release.

Old Dominion originally signed an agreement with EDF Renewables in 2019 for 30 MW of solar across 10 to 12 sites. EDF also will develop the new projects and ODEC would buy the power generated at a fixed rate through power purchase agreements.

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Power Engineering covers solar energy projects globally. Click here to see more stories on solar.

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“ODEC is excited to add to our diverse supply of low-cost, clean energy through these solar projects,” said Marcus Harris, President and CEO of ODEC. “Our cooperative is dedicated to expanding renewable energy generation as part of our ongoing commitment to providing our member owners with safe, affordable, reliable, and sustainable power.”

EDF was chosen as ODEC’s partner through a competitive process led by the National Renewables Cooperative Organization. EDF will development all of the solar sites and handle permitting, design, engineering and commissioning.

“EDF Renewables is happy to expand our business with ODEC and NRCO, who are already taking a long-term view by choosing local solar energy,” Myles Burnsed, vice president of strategic development for EDF Renewables, said in a statement. “This choice strengthens their energy independency and demonstrates to businesses across the nation who can play a part and conduct business as normal as possible in these unprecedented times.”

Old Dominion Electric Cooperative is a non-profit, member-owned supplier of wholesale power for 11 member distribution cooperatives serving about 1.5 million customers in Virginia, Maryland and Delaware.

EDF Renewables North America’s development portfolio includes 16 GW of utility-scale wind, solar photovoltaic and energy storage projects. It is a subsidiary of French-based energy giant EDF Group.

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Utility-scale solar and wind will be part of the content in the Renewables Knowledge Hub on the exhibition floor of POWERGEN International, still happening December 8-10 in Orlando, Florida.

The Innovation Drive Microgrid, as EDF calls it, includes a 209-kW solar carport, 182-kW solar rooftop, 280-kW (538 kWh) battery storage system and 43 electric vehicle charging stations. EDF Renewables, which leases the property to office nearly 500 employees, worked with the building owner and its property management team on developing the project.

“By combining EV infrastructure with solar and storage, we are able to offer the lowest cost of charging for both capital and operating expenses,” Patrick Kelly, director of EV operations for EDF Renewables, said in a statement. “The system made financial sense particularly when San Diego Gas & Electric time-of-use (TOU) rates changed in 2019.”

The solar and battery storage system is managed by EDF Store & Forecast’s Energy Management System (EMS). It will enable onsite coordination of energy production and site consumption with the flexible sources and forecast services combined.

The EV charging system was installed by PowerFlex, an EDF Renewables Company, using its Adaptive Load Management technology. This patented technology, developed out of Caltech, enables hosts to maximize delivery of electricity to electric vehicles while reducing or eliminating the need for costly utility upgrades by managing charging dependent upon driver’s demand, building load, onsite generation, and other variables.

“We are very proud of our onsite project that allows integration of more renewable energy onto the grid that will save millions of dollars over the lifetime of the project,” Raphael Declercq, Executive Vice President, Distributed Solutions at EDF Renewables, said. “Our goal is to help businesses reduce their electricity bills, while increasing the share of clean power and clean vehicles, in particular in our home-state of California.”

The solar and battery storage portions of the project qualify for Federal Investment Tax Credit, if the storage battery is charged only by solar power during the first 5 years. In addition, the battery storage also qualifies for the Self-Generation Incentive Program which provides rebates for qualifying distributed energy systems installed on the customer’s side of the utility meter.

EDF Renewables Distributed Solutions offers on-site clean energy for office buildings, load serving entities, corporates and industrials. The company delivers solar, storage and electric vehicle charging stations as an individual offering or as a full microgrid offering.

The Maverick 7 project is part of the Palen Solar site to be built on 3,140 acres of federal lands. The U.S. Bureau of Land Management completed the federal permitting process approving the project in October 2018.

The project is expected to be completed and operational by the end of 2021.

“Palen Solar, with a total of 500 MW of solar capacity, demonstrates EDF Renewables’ long-term commitment to solar development in California,” said Dai Owen, vice president of power marketing for EDF Renewables. “The project uniquely positions the company to help load-serving entities meet their long-term carbon goals and obligations under California’s Renewable Portfolio Standard (RPS) by offering smaller tranches at industry-leading prices.”

Shell Energy North America will be the sole energy off-taker for the Maverick 7 Solar Project, SENA will also purchase 100 percent of the environmental attributes, including the renewable energy credits and capacity.

This agreement builds on the previously announced PPA between SENA and EDF Renewables for another tranche of the Palen Solar Project in 2018. The Palen project has been in development for more than six years.

“We continually look for opportunities to increase the supply of renewable power in California while simultaneously reducing Shell’s carbon footprint,” said Glenn Wright, President of Shell Energy North America. “Customers and communities are demanding a shift in the way their power is generated, and the Maverick 7 Solar Project allows us to deliver a cleaner, sustainable energy solution.”

EDF Renewables is one of the largest renewable energy developers in North America with 16 GW of wind, solar, and storage projects developed throughout the U.S., Canada, and Mexico.

(Rod Walton is content director for Power Engineering and POWERGEN International. He can be reached at rod.walton@clarionevents.com and 918-831-9177.

EDF Energy, which is leading the Hinkley Point C expansion in England, reported that the project’s completion cost is now estimated between 21.5 billion and 22.5 billion Euros ($23.5B to $24.6B U.S.). This is 10-15 percent or almost 2 billion to 3 billion Euros ($2.1B to $3.2B) higher than previous estimates.

“Cost increases reflect challenging ground conditions which made earthworks more expensive than anticipated, revised action plan targets and extra costs needed to implement the completed functional design, which has been adapted for a first-of-a-kind application in the UK context,” the EDF announcement reads. “Under the terms of the Contract for Difference, there is no impact for UK consumers or taxpayers.”

The company highlighted several achieved or pending milestones on the project which began work in recent years after more than a decade of planning and several years of site preparation. Workers at Hinkley Point C delivered J-0, the completion of the nuclear island “common raft” for Unit 1, EDF reported.

The common raft for Unit 2 is expected to be completed by June 2020, according to EDF. The term common raft refers to concrete base slab on which the nuclear islands sit, according to reports.

EDF says that Unit 1 should be generating power by the end of 2025. Financing for the Hinkley Point C project is coming from parent firm EDF and Chinese nuclear power provider CGN.

 The 3,200-MW project in Somerset would be England’s first new nuclear station since the 1990s. It has encountered intense opposition, financial and logistic challenges, but EDF planners have stayed committed to completing it.

Cheniere Energy announced the achievement Wednesday, saying that Train 2 of the Corpus Christi liquefaction project was completed on August 28. The company earlier announced that work was substantially done on Train 2, but the difference now is that engineering, procurement and construction partner Bechtel Oil, Gas and Chemicals, Inc., turned over custody and control of Train 2 to Cheniere upon commissioning, according to the report.

Cheniere and Bechtel have completed seven liquefaction trains at the Corpus Christi and Sabine Pass projects. The facilities can take in U.S.-produced natural gas, convert it to LNG for shipping across the world as the nation becomes a projected net energy exporter.

Global utilities and energy firms such as Électricité de France, Iberdrola (Spain)., Naturgy Energy Group S.A., PT Pertamina (Persero in Indonesia), and Woodside Energy Trading Singapore Pte Ltd. all have agreement for the LNG output.

Since 2015, Bechtel has delivered an unprecedented 15 large-scale LNG production trains for customers around the world, including eight trains in Australia. Bechtel-delivered facilities account for roughly one-third of the global LNG capacity, supplying about 61 million tonnes of LNG each year, or enough energy to power more than 85 million homes.

In March, Cheniere received federal approval to begin production at the Corpus Christi facility, a boost for efforts to transport U.S. natural gas around the world. Bechtel and Cheniere announced that Train 1 was completed then.

The Federal Energy Regulatory Commission gave its approval for Cheniere to put the first LNG production unit into service. Cheniere CEO Jack Fusco said last month that Train 1 at Corpus Christi becomes first liquefaction train in operation at a greenfield LNG facility in the lower 48 states.

LNG import facilities and regasification projects are being anticipated or already under construction in Europe, Asia and Africa.

(Rod Walton is content director for Power Engineering and POWERGEN International. He can be reached at 918-831-9177 and rod.walton@clarionevents.com). 

Gas-fired generation and LNG impact will be discussed in content sessions at POWERGEN International happening Nov. 19-21 in New Orleans. Registration is open with multiple options for attendees. 

Experts in the nuclear energy industry are making significant advancements in fuel technologies that will help today’s and tomorrow’s fleets of nuclear reactors operate efficiently, reliably and safely.

One area in which experts are rapidly making progress is with enhanced accident tolerant fuel (EATF). These technologies are designed to withstand the loss of active cooling in light water reactors for longer periods of time, providing operators with more time to respond. Additionally, they can improve fuel performance during normal operations.

Driving the Next Evolution of Nuclear Fuel with Two Advanced Technologies

Nuclear fuel typically has a long development process based on years of experience as experts work to deliver benefits to help preserve the existing fleet of reactors and support future technologies. These efforts build on the collective knowledge, skills and expertise of leaders from across the nuclear sector, including utilities, national laboratories, universities and the industry.

Framatome’s experts are currently developing two EATF designs, one near-term and one long-term, under the company’s PROtect program. The near-term design, known as PROtect Cr-Cr, includes chromia-enhanced pellets and chromium-coated cladding. Initially, Framatome is adding these combined features to its new GAIA fuel design for pressurized water reactors (PWRs). Chromia-enhanced pellets are currently provided as part of the Atrium 11 advanced boiling water reactor (BWR) fuel design and will be expanded to the PWR fleet.

The chromia-enhanced pellets have a larger grain structure and improved viscoplasticity. This leads to lower fission gas release under accident conditions, as well as during transient conditions when fluctuating temperatures or pressures change the reactor’s power output. Improved pellet clad interaction (PCI) characteristics also provide greater operational flexibility, such as potential load following capability.

Meanwhile, the chromium coating protects the cladding from debris damage and greatly reduces oxidation at higher temperatures. In accident-type tests, the cladding demonstrates reduced ballooning and rupture size, maintaining the coolable geometry of the fuel rods and reactor core for a longer period of time.

The longer-term EATF design, known as PROtect SiC, features chromia-enhanced pellets with a silicon carbide-based cladding. Silicon-carbide composites have been found to maintain their strength up to very high temperatures. Combined with low neutron absorption, this makes silicon-carbide composite materials ideal solutions for an accident tolerant cladding. Once technical challenges with the material are resolved, such as a need to improve the resistance to dissolution in water, silicon carbide-based cladding materials could provide even more time for operators to respond in the unlikely case of a severe event.

Framatome is researching unique solutions to these technical challenges. The company is currently irradiating samples in a European commercial reactor and plans to irradiate test rod segments in a research reactor in 2020 followed by lead test rods (LTR) in a commercial reactor in 2022.

Much of the work in the United States developing these EATF technologies is underway with support from the U.S. Department of Energy’s (DOE) EATF program. This includes an approximately $49 million, 28-month grant that Framatome received from DOE in November 2018, along with the ability to continue to use and receive support from its national laboratory facilities. This builds on a $10 million, two-year grant the company received in 2016. This funding and lab support accelerate the advancement of these technologies to the benefit of the industry and consumers. A continuation award is expected to support ongoing research, development and testing activities.

In addition to work with DOE, Framatome continues global research, development and testing activities with its partners that have collaborated for several years on some options of this fuel design. Partners include the French Alternative Energies and Atomic Energy Commission (AEC)-which initially explored and identified the suitable cladding coating process and developed SiC cladding-Électricité de France (EDF), the Goesgen Nuclear Power Plant in Switzerland and other leaders from across the nuclear sector. These collaborative efforts draw on each organization’s expertise in conducting advanced materials and manufacturing methods research.

Testing Activities Continue and Show Positive Results

Testing is well underway on Framatome’s EATF designs. After two irradiation cycles of the chromium-coated and silicon carbide-based cladding at the Goesgen Nuclear Power Plant, samples continue to show positive visual indications. This includes greatly reduced oxidation characteristics and no signs of coating delamination. Additional samples were removed after one and two cycles at Goesgen and are now undergoing further characterization and testing at the Paul Scherrer Institut, a research center in Switzerland. Goesgen is the first PWR in the world irradiating samples of EATF cladding, and this testing will continue through commercialization of accident tolerant fuel concepts.

Extensive out-of-pile testing continues at Framatome and CEA laboratories, where chromium coating technology development started in the past decade and shows promising results. This extensive test program has been built to create the in-depth databases of material properties and performance data necessary to model, license and implement chromium-coated cladding in commercial reactors worldwide. The out-of-pile test programs are complementary to irradiation test programs planned and underway on Framatome’s EATF concepts.

In June 2018, chromium-coated rodlets with chromia-enhanced pellets were inserted for testing at the Idaho National Laboratory’s (INL) Advanced Test Reactor (ATR). These rodlets are the first complete combined (cladding and pellets together) EATF concept in the world to be irradiated under PWR conditions. A total of 26 rodlets are being tested in a special loop that mimics the coolant conditions of a commercial light water reactor. The data from this testing will be used to help qualify the fuel design with the U.S. Nuclear Regulatory Commission (NRC).

Following irradiation, the rodlets are scheduled to undergo transient testing at INL’s Transient Reactor Test Facility (TREAT). The results from this testing will also support work to qualify the fuel with the NRC. The Framatome team is working with Oak Ridge National Laboratory (ORNL) to test chromium-coated cladding test specimens planned for irradiation in the High Flux Isotope Reactor (HFIR) test facility in 2019.

Upgrading and Qualifying Manufacturing Processes to Support EATF Testing and Deployment

While testing on these EATF technologies is underway, Framatome is also developing and qualifying the manufacturing process. For the rods, development has advanced to the stage of small-batch, full-length rod coating capability, which supports lead test assembly and test rod production. In March 2018, the team produced its first full-length fuel cladding coated with chromium. The coating was performed on prototype equipment in France.  

With the additional support recently awarded by the DOE, Framatome will embark on the next phase of scaling up these advanced manufacturing processes. Framatome’s fuel manufacturing facility in Richland, Washington, has been upgraded and qualified to begin production of chromia-enhanced pellets for BWR reload quantities and to support lead test rod fabrication for PWRs.

With the lessons learned from the small-batch prototype, the company will accelerate a pilot program to develop the large-batch capability required to support the high volume of rods needed for the lead fuel assembly (LFA) program and the initial reload batch. While a fuel assembly can contain more than 200 rods, depending on the design, one reload-batch size quantity could require 14,000 to approximately 17,000 rods depending on fuel design and batch size. While much progress has been made with promising results, more work must be done to manufacture this quantity of rods.

Based on the promising results obtained using its advanced physical vapor deposition (PVD) coating process, Framatome will expand its research into the applicability of this process and beneficial coatings for the BWR market.

Furthering Accident Tolerant Control Components

As industry implements accident tolerant fuels and cladding materials, Framatome is also developing advanced technology for reactor control components. These components allow operators to control the nuclear reaction and power levels in the core. While accident tolerant fuel solutions tolerate higher temperatures and provide operators with more response time in the unlikely event of an accident, accident tolerant control component materials allow reactor operators to control the reactors even at those higher temperatures.

Framatome is independently developing an accident tolerant control rod comprising ceramic pellets. These pellets exhibit extremely high temperature tolerance—higher than silver-indium-cadmium (AIC) rods and comparable to uranium dioxide or chromia-enhanced pellets. This means that the reactor control system is better able to maintain a fully shut down condition during the unlikely case of a severe transient and allow more time for the emergency core cooling systems to inject borated water.

Ceramic pellets exhibit another significant benefit to normal operations: substantially less swelling than AIC control rods as a function of fluence. This allows the control rod to be operated over a longer lifetime and inserted into the core during power operation without developing issues due to swelling.  As a result, these control rods can be replaced less frequently and be used in plants that need power maneuvering capabilities to support load following, also referred to as flexible operations.

(Photo courtesy Southern Co. Nuclear)

Supporting the Reactor Fleet in Fully Realizing EATF Benefits

Research, development and testing work on EATF designs is the result of decades of experience and expertise. In early 2019, a team of experts from Framatome, Southern Company and Georgia Power placed full-length (not segmented) lead fuel rods with chromia-enhanced fuel pellets and chromium-coated cladding into Unit 2, a Westinghouse reactor design, at Georgia Power’s Alvin W. Vogtle Electric Generating Plant. These were the first complete, full-length and fueled, ATF concepts loaded into a commercial reactor anywhere in the world. Framatome began producing these lead fuel rods in October 2018. Production of the assemblies was completed in December 2018. In January 2019, the LFAs were delivered to Plant Vogtle where they were inserted during the outage completed in March 2019. Southern Company and Georgia Power have been key supporters of the EATF program and instrumental in the success achieved with this delivery.

In the summer of 2019, it is planned to load two LFAs with 10 full-length Cr-Cr rods each in the Goesgen commercial reactor in Europe. These rods have already been produced and are ready for bundle assembly in Framatome’s European manufacturing facility.

In the fall of 2019, Framatome will load fuel assemblies that have chromium-coated rods into Unit 1 at Entergy’s Arkansas Nuclear One. These LFAs will provide important data and insight on the fuel’s performance in B&W design commercial reactors. Additionally, Framatome signed a contract with Exelon to deliver two full fuel assemblies with the company’s EATF solution to be loaded in early 2021 at the Calvert Cliffs Nuclear Power Plant. All fuel rods in these assemblies will be chromium coated and will contain chromia-enhanced pellets.

Fuel technology development is an intensive process that requires robust expertise and experience. With support from the DOE and domestic and international partners, Framatome continues to achieve significant milestones in its journey to deliver the next evolution of nuclear fuel.

About the author: Jeff Reed is program director of the Advanced Fuel Development program for Framatome’s Fuel Business Unit in North America. In this role, Jeff is responsible for leading Framatome’s participation in the U.S. Department of Energy’s Accident Tolerant Fuel Program and the fuel design program for NuScale small modular reactors. He also serves as the licensing and U.S. project manager for Enfission, a joint venture between Framatome and Lightbridge that aims to develop, license and manufacture fuel assemblies incorporating the innovative metallic Lightbridge Fuelâ„¢ technology.  A graduate of Baker University, Jeff holds a bachelor’s degree in business, with a strong technical background in mechanical engineering. 

The Nuclear Fuel Advisory Board was formed in 2011 bringing together senior fuel managers from leading electric utilities which account for about half of the installed nuclear capacity in the U.S. EDF’s Roger Float, nuclear fuel strategy and commercial manager, will represent EDF Energy on the board.

“We welcome the opportunity to join NUFAB and provide our insight to Enfission, given the unprecedented level of evolution/revolution that fuel design is ,” Float said. “Specifically, there are a number of potential benefits the fuel could bring to the nuclear industry including improved economics, power uprates, longer fuel cycles, as well as enhanced safety benefits.”

The 50-50 venture between Lightbridge and Framatome was established in January 2018 to complete the development, regulatory licensing, and commercial deployment worldwide of nuclear fuel assemblies based on multi-lobe metallic twisted fuel technology.

“We are honored to welcome EDF Energy, represented by Roger Float, a senior nuclear industry executive, to NUFAB,” said Seth Grae, CEO of Enfission, in a statement. “EDF Energy brings insight and expertise that will be valuable towards the development and qualification of Lightbridge Fuel.”

EDF, part of French utility giant EDF Group, is the largest owner and operator of nuclear power plants around the world. One of its projects is the Hinkley Point C construction effort in the United Kingdom.

Nuclear executives with Duke, Dominion, Exelon and Southern Co. are also part of the Enfission nuclear fuels advisory board.

France has long been the world’s atomic champion. With a nuclear-generating capacity capped at 63 GW, 72 per cent the country’s electricity came from nuclear reactors in 2017.

But the country’s nuclear over-reliance cannot continue: in November 2018, President Macron delivered a draft of “la Programmation pluriannuelle de l’énergie”, or PPE — the roadmap for energy reform that France’s government is mandated to review every five years.

The document contains one noteworthy pledge: to reduce nuclear generation to 50 per cent the energy mix by 2035. With France’s electricity consumption expected to remain flat, this would require the closure of 12.6 GW of nuclear capacity — equivalent to 14 reactors.

So, is France’s longstanding affinity with nuclear coming to an end? Far from it. In fact, the PPE largely highlights nuclear power’s integral position in France’s energy mix. The implications for Electricité de France (EDF), the country’s nuclear power monopoly, are therefore less acute than first feared. Though the utility has its credit difficulties to overcome, the PPE is neither a friend nor foe to EDF’s position — and should only preserve the status quo.

A low-carbon future

Today, we consider France well-positioned to meet its two long-term energy transition targets: to be a low-carbon generator, compliant with European climate directives; and to achieve energy supply independence — that is, with limited imports. Of course, nuclear power is a complementary factor in this regard. Thanks also to hydro assets, around 90 per cent French power production comes from low-carbon sources. But France’s 58 nuclear reactors are aging, and only have a 33-year lifespan on average. Continuing France’s low-carbon future is therefore a priority.

This, in turn, presents opportunities for renewable sources — notably onshore wind and photovoltaic assets. Indeed, France is pushing for such capacity additions in order to meet its renewable generation target of 40 per cent 2030 (by contrast, renewables accounted for 18 per cent generated power in 2017, which hydro was mostly responsible for).

Driving renewable investment will largely be the French government, whose annual renewable subsidies will increase to €8bn from €5bn every year from 2019 until 2028. Other forms of support — such as the simplification of administrative work related to subsidy approval, and financing schemes — have yet to be announced, but these are expected to gain greater attention during the PPE’s public consultation period.

Implications for EDF

The transition from nuclear to renewable sources has placed EDF, as France’s sole nuclear operator, under some scrutiny. However, our preliminary view is that the PPE should not prompt a major shift in the utility’s business strategy. If anything, it may bring greater clarity to EDF’s long-term thinking.

Importantly, nuclear reactor closures are limited over the next decade. Except for the Fessenheim 2 reactors, which will shutter in 2020, no nuclear reactors will close before 2027. There is, however, some flexibility in this plan: should renewable energy proliferation accelerate to an extent where grid oversupply occurs, the PPE provides scope for two voluntary closures between 2025 and 2026. Nonetheless, this means that the Grand Carénage investment plan, EDF’s program to spend up to €45 billion between 2014 and 2025 to extend some of its nuclear reactors’ lifespans, will remain broadly unchanged.

The decade-or-so-long respite from nuclear closures gives EDF some time to adapt, too. In fact, the utility has established a plan for growth in renewables, development of smart networks, promotion of e-mobility, and energy efficiency solutions. Yet the PPE’s nuclear targets still only incur a marginal change to EDF’s spending commitments: its additional investments annually are unlikely to exceed a net €500m (it’s worth considering that EDF’s total annual capital expenditure is around €12bn).

Of course, while the proposed PPE may only necessitate minor adaptations, it’s worth noting that the roadmap isn’t too supportive, either. At this stage, the plan leaves EDF’s generation activities in France at the mercy of the merchant power market. About 70 per cent EDF’s earnings before interest, tax, depreciation and amortization (EBITDA) are derived from its power generation activities, which are mostly merchant.

This means that earnings are highly correlated to any volatility in power prices. For the time being, power prices are favourable to EDF, but it’s our view that European power markets may only become increasingly volatile due to more severe and frequent extreme weather events — which can make power demand less predictable.

A long future

So, what next for EDF? Its credit quality is still weighed down by debt and, absent profound structural changes to the European and French power market, the company likely remains exposed to volatile earnings streams. The French government has expressed an awareness of EDF’s financial constraints and could be willing to propose a new remuneration framework for the existing nuclear fleet, which could be a strong positive for the group’s credit quality. The timing and details of this regulatory change remain uncertain, however.

More immediately, France is expected to transcribe a final PPE proposal into law in the coming months. Though, all in all, this amounts to marginal changes for EDF — and for France’s nuclear future. The PPE is not a disruptor to France’s nuclear traditions: it does not attempt to accelerate the pace of the country’s energy transition. In fact, France may even examine new nuclear projects from 2021 if they prove to be price-competitive.

Nonetheless, it seems apparent that nuclear power in France still has a long future ahead. Any major reductions in nuclear capacity below the 50% threshold after 2035 at this stage seem unlikely — with no stated intentions to reduce the share further. France’s nuclear status quo, then, remains intact.

Pierre Georges is Senior Director, Sector Lead, EMEA Utilities; Claire Mauduit-Le Clercq is Director, EMEA Utilities.
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Developments in the nuclear power sector will be one of the hot topics at POWERGEN Europe in Paris later this year. Click here for details of the event.