EDF Sees U.K. Nuclear Plant as Key for Africa, India Bids

  • Atomic reactors must cost 5 billion euros to be competitive
  • Ursat says EDF may deepen cuts in operational expenditure

Electricite de France SA remains committed to an 18 billion-pound ($25 billion) atomic-reactor project in the U.K. to help the state-controlled power company win more contracts from India to South Africa.

EDF wants to make an investment decision on the two 1,600-megawatt EPR reactors at Hinkley Point as soon as possible, Xavier Ursat, the company’s head of new nuclear projects, said Wednesday at a conference in Paris.

“It will be an exceptional opportunity and a business card for our industry to best address promising markets such as South Africa, India, part of Eastern Europe, and to build on our presence in China,” Ursat said.

EDF’s finances are coming under strain as falling power prices and rising competition threaten future earnings while it needs to spend 50 billion euros ($55 billion) by 2025 to renovate its fleet of French nuclear reactors. Chief Financial Officer Thomas Piquemal resigned this month after his plea to delay Hinkley Point was rejected. The French government, which owns 85 percent of EDF, subsequently renewed its support for the British power project.

EDF, which has said it will finance new developments with asset sales and slash operational expenditures by 700 million euros by 2018, is considering deepening those cost cuts, Ursat said Wednesday.

Costs Up

The reputation of EDF, the world’s largest nuclear plant operator, and French reactor builder Areva SA have been tarnished by construction delays and cost overruns at EPR plants in France, Finland and China. EDF last year raised the cost of its project in France to 10.5 billion euros, more than treble the initial estimate. These projects aren’t experiencing further delays, the EDF executive said.

Large atomic reactors will have to cost about 5 billion euros to be competitive in the future, Ursat said. EDF and Areva are working on the basic design of a new EPR that will be easier and cheaper to build, with a view to commissioning models by the end of the next decade, he said.

He stressed the need for EDF and other French companies to have a “real alliance strategy” with Chinese groups because they will probably build more than half of new atomic plants in the next 20 years. China General Nuclear Power Corp. is EDF’s partner at Hinkley Point.

France needs to take the long-term view and to renovate its nuclear fleet because power prices in Europe may rebound “progressively or brutally” in three to four years, Dominique Miniere, EDF’s head of nuclear and thermal power plants, said Wednesday.

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