EDF May Need $1.35 Billion to Extend Life of Each Reactor

Electricite de France SA will need to spend billions of euros on each of its reactors to keep them operating for as long as six decades, according to a parliamentary report.

The exact cost “remains hard to figure out,” according to the study published today by lawmakers led by Francois Brottes of the ruling Socialist Party and Denis Baupin of the Greens. It cited differing estimates from EDF and the state auditor.

The pricetag will add to rising costs for atomic power paid for by households and factories, and threatens the industry’s future, it said. Spending is increasing to maintain aging reactors and improve safety, and to develop a new generator at Flamanville in Normandy, it said.

The 214-page report follows almost six months of hearings in parliament on the cost of atomic power in France, where EDF runs the nation’s 58 reactors. The report details uncertainty about future spending in areas like dismantling, waste treatment and disposal, and whether it’s worthwhile extending the lives of reactors beyond four decades.

The government is expected to unveil a long-delayed law on changes to France’s energy mix next week. President Francois Hollande has pledged to cut reliance on nuclear to half of total power output by 2025 from about three-quarters now, the highest proportion in the world.

‘Schizophrenic’ Policy

The government must come up with an energy strategy as well as a more balanced energy mix, today’s report states, calling for a halt to the “schizophrenia” of the country’s policies on EDF, which is 84 percent owned by the state.

During the course of the hearings, discrepancies emerged over EDF’s future investment needs. The auditor estimates EDF would need to invest 110 billion euros from 2011 to 2033 to prolong reactors lives beyond 40 years.

From 2011 to 2025 it would need to spend 62.5 billion euros, according to the auditor, while the utility has put the figure at 55 billion euros for 2014 through 2025, according to the report. Added to the costs would be another 1 billion euros in maintenance for each reactor over its extended lifetime.

The total cost of keeping the existing fleet working would be around 3 billion euros a reactor, Baupin said at a press conference.

The reactors have an average age of about 28 years. The spending plan doesn’t take into account uncertainty about whether reactors are safe enough to run more than 40 years.

“The government has to take responsibility and decide on the future of EDF’s existing fleet,” Baupin said. “There are costs that have been underestimated.”

EDF’s nuclear power costs rose 21 percent in the past three years to 59.8 euros a megawatt-hour in 2013 from 49.6 euros a megawatt hour in 2010, according to the state auditor. The inflation was “higher than expected,” Baupin said.

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

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Alex Devine, Reed Landberg

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