China Builds Nuclear Reactor for 40% Less Than Cost in France, Areva Says

Areva SA said the EPR nuclear reactor costs 3 billion euros ($4 billion) to build in China, 40 percent less than the price tag Electricite de France SA has put on building one in Normandy.

Chinese nuclear builders’ grasp of the technology is “very worrying” for European companies, Areva Chief Executive Officer Anne Lauvergeon told a hearing at the French Senate today in Paris. She also said Chinese companies are more efficient.

The third-generation reactor designed by Areva is being built in France, Finland and China at varying budgets and construction schedules. Once considered key to the success of France’s atomic exports, the design has been criticized as too big and costly after the country lost to a Korean group for a $20 billion order in the United Arab Emirates last year.

“The EPR isn’t more expensive than the competition for the same product,” Lauvergeon told senators today. “All of the lessons learned in Finland are being integrated into construction at Taishan. We are simplifying and improving.”

Talks on developing two more of the reactors in China in addition to two already under construction are “near completion,” Lauvergeon said. Areva is also in the final stages of negotiating the sale of two EPRs in India, plus a nuclear fuel contract, she said.

Ahead of Schedule

State-run EDF has a 30 percent stake in Taishan Nuclear Power Joint Venture Co. to develop and operate two 1,700- megawatt EPRs with China Guangdong Nuclear Power Group. Areva, also run by the government, is supplying components.

Construction of Taishan 1 began in November 2009 while Taishan 2 started in April. The reactors are expected to start at the end of 2013 and 2014, according to EDF.

The EPR being developed in Finland will take 86 months to complete due to the country’s “very demanding regulator and a complicated” client, Lauvergeon said. The Flamanville reactor in Normandy will take 71 months while Taishan 1 and 2 are targeting 46 months, she said.

Taishan 1 is on schedule and Taishan 2 is ahead, according to Lauvergeon.

Progress at Taishan is being kept six months behind Flamanville deliberately in order to benefits from experience, the head of France’s nuclear safety watchdog Andre-Claude Lacoste said last week.

EDF has repeatedly raised its cost estimate for Flamanville, France’s first EPR, with the latest estimate at about 5 billion euros, up from 3.3 billion in 2005.

Areva has already booked 2.6 billion euros of provisions for the EPR it’s developing in Finland, initially estimated to cost 3 billion euros.

To contact the reporter on this story: Tara Patel at tpatel2@bloomberg.net

Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net.

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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