Abstract
France is at an energy crossroads. To meet future electricity needs, the country could extend the operating lives of nuclear power plants beyond 40 years, accepting the safety challenges and costs of such a move, or it could change its energy mix, moving away from nuclear power and toward energy-efficiency measures and other energy sources. Until recently, the French government had refused even to examine the possibility of reducing the country’s reliance on nuclear power. But a study by independent French experts suggests that staying the nuclear course would be more expensive and less environmentally beneficial than authorities make it out to be. The difficult financial situation of two state-controlled firms involved in nuclear energy, EDF and Areva SA, will seriously affect the government’s operating margins. Those financial difficulties, the aging reactor fleet, and public opinion—which is largely in favor of a nuclear phase-out—will force the government to make fundamental choices in the near future about its energy strategy.
From the 1960s until the 2012 presidential elections, the French government had overwhelmingly and unwaveringly supported the nuclear power industry, not even budging after the Fukushima catastrophe. When the nuclear path is questioned, French political leaders and nuclear industry representatives frequently respond by pointing to the country’s inexpensive electricity and relatively low greenhouse gas emissions. Any suggestion that nuclear power’s share of the national energy mix might be lowered or phased out altogether tends to be met with dire predictions of environmental and economic disaster.
For example, in its 2012 annual reference document,
These warnings, however, are largely based on unlikely—perhaps even unreasonable—energy scenarios and ignore the increasingly poor financial situations of EDF and Areva SA, the state-controlled firm that builds nuclear plants and provides a full range of fuel services. The warnings also do not account for another important fact: By 2020, 22 of France’s 58 nuclear power reactors will have operated for 40 years. The French Court of Accounts, an independent agency tasked with examining public spending, calculates that, if these plants are retired, the country will have to build at least 11 new, third-generation nuclear plants by 2020 to maintain the current nuclear-generation level—a target industrially impossible to achieve.
France stands at an energy crossroads. It can extend the operating lives of nuclear power plants beyond 40 years, accepting the safety challenges and costs such a move mandates, or it can change its energy mix, moving away from nuclear and toward energy-efficiency measures and other energy sources. Not until last year’s presidential election had the government even examined the possibility of reducing the country’s reliance on nuclear power. But a study by independent French experts suggests that staying the nuclear course would be more expensive and less environmentally beneficial than authorities make it out to be.
The hidden price tag
The French nuclear industry claims that economics stands strongly on its side, and in the wake of the Fukushima disaster, industry officials warned vigorously against the consequences of a nuclear phase-out. For example, the French Union of Electric Companies (UFE), led by national utility EDF, published a study that concluded that reducing the share of nuclear power to 20 percent by 2030 would require 112 billion euros in extra investment compared with keeping that share at 70 percent; the group added that a decreased reliance on nuclear power would have a negative impact on electricity prices and would require 10 billion euros of electricity imports per year (Union Française d’Électricité, 2011). Nuclear giant Areva SA published its own scenarios, concluding that a nuclear phase-out would cost up to 350 billion euros more in investments than keeping the current electricity mix (Commission Energies 2050, 2012).
Perhaps the most extreme claims came from the chief executive officer of EDF, Henri Proglio, who claimed that a French nuclear phase-out would cost as much as 1 percent of gross domestic product and lead to the loss of one million jobs (Le Parisien, 2011). Such claims—echoed by other governmental and industry leaders—were accompanied by paeans to France’s low electricity prices and predictions of huge price increases if the country were to phase out civilian nuclear power.
In reality, however, the history of French nuclear power is one of cost overruns, inefficiency, and rising generation costs. The factual bases for many of the claims made by nuclear supporters in the wake of Fukushima are often nonexistent or distorted. 1
In January 2012, the Court of Accounts projected that the third-generation European Pressurized Reactor that Areva is building in Flamanville will have electricity-generating costs of 70 to 90 euros per megawatt-hour. This is three times the government’s initial estimate of 28 euros, which was used in 2003 to justify the decision to build the reactor in 2005.
This pattern of overoptimistic estimation and rising real costs has applied from the beginnings of the civilian nuclear program. Although the Commission for the Production of Electricity from Nuclear Origin, or PEON—a consultative committee charged with advising the government on nuclear matters—issued annual reports on the nuclear effort from its early days, the first comprehensive assessment of the economics of the French nuclear program was made public only in 2000. Although it focused on the future economics of the nuclear option, the assessment—commissioned by Socialist Prime Minister Lionel Jospin (Charpin et al., 2000)—was a thorough economic study of the existing nuclear fleet, based on the industry’s raw data (Girard et al., 2000). This analysis found that, although the French nuclear industry had promised cost decreases, the projected investment costs of pressurized water reactors increased by 3.3 percent per year on average, in constant money, between 1970 and 1997, a finding confirmed later in a study by the International Institute for Applied Systems Analysis, which showed the learning curve of French nuclear reactor construction was actually negative. That is, the greater the number of reactors built, the less economical they became (Grubler, 2010).
The Court of Accounts provided its own estimates of electricity-generating costs for existing nuclear plants. Instead of the levelized cost (i.e., the electricity price needed to break even with the investment cost over the lifetime of the plant) of 33.4 euros per megawatt-hour used by the government and EDF in their amortization calculations, it calculated an average cost of 49.50 euros per megawatt-hour, which could go up to 54.20 euros in the coming years to cover the expenses of projected safety-related improvements ordered since the Fukushima disaster. This estimate does not include public research and development expenditures, which, if accounted for, would bring the cost up to 69 euros per megawatt-hour (Dessus, 2012). Also, the court warned about the high uncertainty of long-term decommissioning and waste-management costs and the impossibility of adequately reflecting the risk of a major accident in these kinds of cost estimates.
Despite nuclear power’s historical popularity with the government, its actual contribution to the country’s wealth has been rather limited. According to an assessment by PricewaterhouseCoopers commissioned by Areva, the nuclear sector contributed 0.71 percent of GDP in 2009, thus generating a total value of 33.5 billion euros (PricewaterhouseCoopers, 2011).
One of the government’s initial objectives in its extraordinary investment in the nuclear program was to render the country independent of fossil fuel imports; that effort has largely failed. France remains highly dependent on energy imports, particularly on oil and increasingly on natural gas. In fact, the French annual per capita consumption of 10 barrels of oil in 2011 is more than Italy’s (which stands at 8.8 barrels per year, even though Italy abandoned nuclear power 25 years ago) and the European Union average of 9.8 barrels per capita per year. 2 Once natural gas and coal are included, fossil fuels still account for more than 70 percent of final energy use in France while nuclear energy accounts for only about 17 percent (CGDD, 2011). And with uranium no longer mined in France, nuclear power cannot accurately be termed a domestic energy source.
Huge investment in the French nuclear program has not prevented an endemic phenomenon in French households: energy poverty. Massive overbuilding of nuclear power in the 1980s and 1990s led to the promotion of thermal uses of electricity, especially for home heating and hot water. Electric space heating represents about 30 percent of the winter peak electrical load. These extremely energy-inefficient heating systems have greatly contributed to a situation in which an estimated four million households have difficulty paying their energy bills. According to EDF, there are now 1.1 million households that qualify for the so-called “primary necessity tariff” that lowers bills by up to 60 percent.
Nuclear power and climate change
In making the case for continued reliance on nuclear power, political leaders and nuclear industry representatives frequently stress the country’s relatively low greenhouse gas emissions and especially those attributable to electricity generation. And in its latest annual reference document (EDF Group, 2012), EDF offered scary visions of what might happen if plans that would lower the nuclear share of the energy supply ever came to fruition:
The scenario of a 75 percent to 50 percent drop in 2030 in the share of France’s nuclear origin electricity would entail an increase from 40 euros to 70 euros per megawatt-hour in the price of electricity; i.e., a 75 percent increase. It also represents a 50 percent increase in greenhouse gas emissions by the French electricity fleet and a substantial increase in imports of fossil fuels. It would be the end of energy independence in France as regards electricity production. Full withdrawal from nuclear energy by 2030 would mean doubling the price of electricity, massive use of fossil fuel imports, and the risk of a fivefold increase in greenhouse gas emissions in France.
Presented as absolute certainty, EDF’s assertions have little reasonable basis in fact. Actually, they rest on a scenario that almost certainly would never happen in the real world: As nuclear plants are shut down, they would be replaced with an equivalent amount of generating capacity provided by natural gas-fired power plants. As with the German nuclear exit, a reduction in nuclear power production in France would, almost of necessity, be linked to aggressive energy-efficiency programs and heavy investment in alternative energy sources. In France, however, the industrial rhetoric of a nuclear phase-out “catastrophe” has flourished through the years, largely because of a lack of institutional perspective. Until the Fukushima disaster, the nuclear sector enjoyed such strong political support that there had simply never been any official governmental study exploring non-nuclear scenarios for the French electricity market.
Most of the energy scenarios published by the Ministry of Economy, which was responsible for energy policy up to 2007, and, since then, by the newly named Ministry of Ecology, Sustainable Development, and Energy have been developed by the same consultant, Enerdata, using the same models. For decades, each new scenario would confirm the good performance of the nuclear option and, therefore, the irrelevance of considering alternatives to nuclear energy.
A 2008 government-commissioned report explored the potential of demand-side management and renewables in the French energy budget (Syrota, 2008). But none of the various scenarios in this study—which were developed by Enerdata and a team from
The potential for energy efficiency and renewables was further examined in the high-level stakeholders’ dialogue known as the
In the end, the government found itself tied to conflicting post-Grenelle commitments: It aimed to stabilize French electricity consumption, to increase renewable energy production from its 13 percent share of the national energy budget to more than 23 percent, and to hike nuclear capacity with the planned start-up of the European Pressurized Reactor in Flamanville and the construction of a second one in Penly. It is therefore unsurprising that the government did not implement policies that would reduce the need for existing or planned reactors.
In early November 2012, the government’s Environment and Energy Management Agency (ADEME) released scenarios for 2030 and 2050 as a contribution to an upcoming national debate on energy policy (ADEME, 2012). The study outlines pathways that would not only reduce final energy consumption by 20 percent by 2030 and a staggering 48 percent by 2050, but also shut down half of the country’s nuclear-generating capacity—about 32 gigawatts, or all 34 of France’s 900-megawatt reactors. At the same time, carbon dioxide emissions would drop 33 percent by 2030 and 74 percent by 2050.
NégaWatt, an independent group of experts formed to explore a resilient energy strategy for France, developed another scenario that established itself as a substitute for the official, essentially nonexistent energy-transition scenario (Association négaWatt, 2011). Its three-step approach aims to turn the French energy structure into a sustainable system: eliminating useless energy consumption while reinforcing useful energy services, implementing more systematic efficiency efforts, and substituting renewables for fossil fuels and nuclear power. The scenario projects that, by 2050, France could develop a system that uses little more than one-third of today’s primary energy, with more than 90 percent of that energy coming from renewables.
The négaWatt scenario discusses a nuclear phase-out as part of this global energy transition and tries to balance energy, safety, and industrial constraints. Given its “realistic” pace of reduction of electricity demand and development of renewables, the négaWatt scenario makes it very clear that aging French nuclear reactors are a major concern. In total, 80 percent of the 58 French reactors went online between 1977 and 1987 and will therefore reach the end of their 40-year lifespans between 2017 and 2027. These aging plants provide more than 60 percent of France’s electricity.
The négaWatt scenario stresses a need to avoid extending operation of any of these plants beyond 40 years. Under this scenario, a graduated nuclear phase-out in France would be complete in 2033.
Of course, such a scenario is far outside the current political mainstream. The opposition
Aging nuclear reactors and other problems: A call to action
The French Court of Accounts noted in a recent report that by the end of 2020, 22 out of France’s 58 commercial nuclear reactors will have reached 40 years of operation (Cour des Comptes, 2012). Assuming this represents the average expected lifetime of the plants, and if the goal is to maintain stable output of nuclear power, France would have to build and commission 11 European Pressurized Water Reactors within eight years. “This seems highly unlikely, if not impossible,” the court wrote (Cour des Comptes, 2012: 26), concluding that one of two results is likely: Either the existing plants will operate for more than 40 years, as suggested by the government’s multiyear investment program, or the energy mix will move toward other energy sources. “However,” the court noted, “no clear public decision has been made concerning these major strategic issues, even though they call for short-term action and major investments.”
At this point, it is increasingly obvious that pressure will grow to extend the lifetimes of operating reactors beyond 40 years. The case of the two oldest reactors, at Fessenheim, gives some sense of the controversy that might accompany attempts to extend the lives of other nuclear plants. On several occasions, the government has formally confirmed that the Fessenheim units, connected to the grid in 1977, will be shut down before the end of 2016. 3 In fact, the Nuclear Safety Authority has requested extensive safety-related backfitting well ahead of that date (ASN, 2012). It remains to be seen whether EDF considers it worthwhile to spend hundreds of millions for a few years of operation or whether it shuts the reactors before the date set by the government.
The controversy around the shutdown of the Fessenheim plant spurred the directors of all other reactor sites in France to sign a unique joint statement, on EDF letterhead, expressing their solidarity with the employees of the plant to be closed (EDF, 2012). It seems politically impossible at this stage that the decision on Fessenheim will be overturned.
The aging of the reactor fleet affects another area: plutonium use in mixed-oxide fuel, or MOX. The Hollande government has confirmed its support, in principle, for reprocessing spent fuel and using mixed uranium-plutonium oxide fuel in light water reactors. But the first of the 22 reactors currently licensed to operate with MOX fuel will be 40 years old in 2020. If the next government follows a policy of reducing the share of nuclear power in the country’s energy supply, the reprocessing and MOX-production operations would necessarily start to wind down.
Meanwhile, the two majority state-owned companies, Areva and EDF, are having financial difficulties that could also lead to early abandonment of the French plutonium economy. EDF already places a value of zero on its stockpile of plutonium, which amounted to 57.5 tons at the end of 2011 (IAEA, 2012). 4 After the failure of France’s fast breeder reactor program, MOX provided a justification for the completion of two large reprocessing facilities at the La Hague site in Normandy.
EDF has never been a strong supporter of the plutonium route and still is not. The scheme is not only expensive but also complicates fuel shipments and handling and reactor core management. And expense is becoming a problem for EDF, which had a debt burden of 39.7 billion euros in the first half of 2012. In addition, the company faces substantial new investments as a consequence of post-Fukushima decisions by the safety authorities; maintenance costs are expected to double, at least. Abandoning the plutonium business would save EDF a lot of money, since it currently has to shoulder the entire operating costs of the La Hague reprocessing facility.
But abandoning plutonium would be a hard hit for Areva, which is not doing much better than EDF, financially speaking. The largest nuclear fuel company and reactor builder in the world reported a loss of 2.4 billion euros in 2011, and its credit rating is just one notch above junk status. 5 With foreign customers having completed their contracts 6 and no new business in sight, Areva’s reprocessing plants will certainly not increase their load factor beyond the past decade’s mediocre average of 62 percent.
France’s nuclear export policy of the past 10 years has been a total fiasco, with nuclear power projects abandoned in the United States, Italy, and South Africa, and projects in big trouble in Finland and the United Kingdom. In the first quarter of 2012, Areva had to provide an additional 300 million euros for expected losses in Finland. EDF has lost an estimated one billion euros in an aborted adventure with the US utility Constellation. On August 30, 2012, the US Nuclear Regulatory Commission gave EDF 60 days to find a new partner for its project to build a European Pressurized Reactor at the Calvert Cliffs site in Maryland. 7 What had not happened over two years did not happen in 60 days, and so the commission terminated the licensing procedure.
Another French industry phantom project vanished when an overwhelming 94 percent of Italians voted no in a national referendum in June 2011, ending hopes of restarting nuclear power in that country. After years of back-and-forth, the prospects for building next-generation reactors in South Africa are still dim. In addition, a remarkable survey by the South African newspaper
The difficult financial situation of nuclear champions EDF and Areva will seriously impact the government’s operating margins. Those difficulties, an aging reactor fleet, and public opinion—which is largely in favor of a nuclear phase-out—will force the government to make fundamental choices about its energy strategy in the near future. The combination of economic constraints and sociopolitical circumstances could very well signal a shift in France’s reliance on nuclear power. And the country’s historical allegiance to the technology could be just that: History.
Footnotes
Acknowledgements
This article is part of a three-part series on the implications of phasing out civilian nuclear power in Germany, France, and the United States. Additional editorial services for this series were made possible by grants to the
Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.