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France Won’t Shut Any More Atomic Reactors, Minister Says

The French government won’t shut any more of Electricite de France SA’s nuclear reactors after the country’s oldest plant closes in three years, Industry Minister Arnaud Montebourg said.

“My answer is no, my answer is clear,” Montebourg said in an interview in Paris. “It’s not our strategy.”

The pledge undercuts President Francois Hollande’s promise, made in last year’s election campaign, to trim France’s atomic output to half of total energy production by about 2025 from 75 percent now. Montebourg’s comments will also be a boon to state-controlled EDF, which with 58 French reactors and another under construction is the biggest nuclear operator in the world.

“Nuclear offers a competitive advantage for the performance of France’s industrial base,” the minister said. “Our nuclear investment allows us to have competitive energy costs, less than elsewhere.”

Montebourg’s insistence that no more reactors will close goes further than Hollande’s September commitment to keep atomic-energy output capacity “capped at the current level.”

Hollande has ordered the permanent halt of EDF’s two 900-megawatt nuclear units at its Fessenheim plant in eastern France by the end of 2016. That same year, the utility plans to start operating what will be the country’s single-biggest atomic generator at Flamanville in Normandy.

Photographer: Balint Porneczi/Bloomberg

“Nuclear offers a competitive advantage for the performance of France’s industrial base,” Arnaud Montebourg, France's industry minister, said in the interview. Close

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Photographer: Balint Porneczi/Bloomberg

“Nuclear offers a competitive advantage for the performance of France’s industrial base,” Arnaud Montebourg, France's industry minister, said in the interview.

Rising Bills

The decision to keep all remaining reactors open will benefit not only EDF but its customers, according to UBS AG.

“Consumer bills are set to rise substantially in any case, and forced nuclear closures would further accelerate this trend,” said Patrick Hummel, a utilities analyst at UBS in Zurich.

EDF has climbed 84 percent this year in Paris trading, and was down 0.4 percent today at 25.78 euros as of 12:09 p.m. local time. German competitors EON SE and RWE AG, contending with a phaseout of nuclear energy in their home market, have both declined this year in Frankfurt.

“The Germans who have abandoned nuclear are now forced to reopen coal plants,” Montebourg said. “They are now the biggest polluters of Europe.”

France’s nuclear program was begun under President Charles de Gaulle in a bid to make the country self-sufficient in electricity. Until the most recent presidential election campaign, support for atomic energy was unanimous among the main political parties.

Safety Concerns

Hollande broke with tradition following the 2011 Fukushima disaster in Japan, ordering the shutdown of Fessenheim as concerns rose that the plant, opened in 1978, had a concrete base that was too thin.

The Socialist campaign pledge to reduce France’s dependence on atomic power emerged from a political accord with the anti-nuclear Greens and has provoked objections from trade unions.

Labor groups representing nuclear workers have aligned with industry leaders in calling on Hollande to keep France’s atomic heritage intact to ensure development of a leading technology and maintain relatively cheap electricity for factories. Paris-based EDF is seeking to extend reactor lives to six decades.

French factories compete with output from plants in the U.S., which benefit from lower energy costs following the shale-gas boom. Hollande has vowed to keep a domestic ban on hydraulic fracturing, or fracking, the drilling technique needed to extract underground reserves thought to lie beneath parts of the French countryside.

Promoting Renewables

The Greens, who have two ministers in the government and help move legislation comfortably through parliament, are pushing subsidy-dependent renewables and energy savings. Hollande has said these measures, along with less reliance on fossil fuels and nuclear, will cost an estimated 20 billion euros ($27 billion) a year.

A long-awaited energy law will be passed by the end of 2014, he said in September. That’s more than a year behind the original schedule. Meanwhile, Montebourg said the government is focusing on lowering labor, capital and energy costs for industry after France lost 50,000 industrial jobs in a decade.

“We are working extremely methodically and precisely on overseeing our production costs,” he said. “We need results.”

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

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

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