Areva Says Japan Nuclear Fallout Shows Need for Complex Plants

Areva SA (CEI) Chief Executive Officer Anne Lauvergeon said explosions at a Japanese atomic power site in the wake of an earthquake last week underscore her strategy to offer more complex reactors that promise superior safety.

“Low-cost reactors aren’t the future,” Lauvergeon said on France 2 television station yesterday. “There was a big controversy for one year in France about the fact that our reactors were too safe.”

Lauvergeon has been under pressure to hold onto her job amid delays at a nuclear plant under construction in Finland. The company and French utility Electricite de France SA, both controlled by the state, lost a contract in 2009 worth about $20 billion to build four nuclear stations in the United Arab Emirates, prompting EDF CEO Henri Proglio to publicly question the merits of Areva’s more complex and expensive reactor design.

Areva’s new EPR reactors, being built in France, Finland and China, boasts four independent safety sub-systems that are supposed to reduce core accidents by a factor 10 compared with previous reactors, according to the company.

The design has a double concrete shell to withstand missiles or a commercial plane crash, systems designed to prevent hydrogen accumulation that may cause radioactive release, and a core catcher in the containment building in the case of a meltdown. To withstand severe earthquakes, the entire nuclear island stands on a single six-meter (19.6 feet) thick reinforced concrete base, according to Paris-based Areva.

Photographer: Antoine Antoniol/Bloomberg

Areva Chief Executive Officer Anne Lauvergeon speaking in Paris. Close

Areva Chief Executive Officer Anne Lauvergeon speaking in Paris.

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Photographer: Antoine Antoniol/Bloomberg

Areva Chief Executive Officer Anne Lauvergeon speaking in Paris.

Japanes Quake

In Japan, the 8.9-magnitude temblor and subsequent tsunami on March 11 has led to two blasts at the Fukushima power station. Operator Tokyo Electric Power Co. said it cannot rule out that fuel rods are melting at the No. 2 reactor after they became exposed for a second time by a drop in water levels.

Lawmakers and industry executives in nations including India, the U.S., Germany and the U.K. have called for reviews of atomic safety procedures as Japan deals with the worst nuclear accident since the 1986 Chernobyl disaster in Ukraine.

Investment certificates for Paris-based Areva, in which the state holds 85.7 percent, fell 9.6 percent today, the biggest drop since November 2008, after the accident raised concerns about expansion in the industry.

There are 442 reactors supplying about 15 percent of the world’s electricity, according to the London-based World Nuclear Association. Sixty five reactors are under construction, the association said on its website. There are plans to build more than 155 reactors, mainly in Asia, where Areva competes with Russian, U.S., Korean and Japanese companies to win new contracts.

To contact the reporter on this story: Francois De Beaupuy in Paris at fdebeaupuy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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