The Independent Assessment of Nuclear Developments in the World

Home > WNISR Essential News > Financial Analyst on French Nuclear: “It Looks Really Bad.”

Financial Analyst on French Nuclear: “It Looks Really Bad.”

Wednesday 5 December 2012

The nuclear industry in France has suffered two major blows in the last few days. Firstly, on 3 December 2012, Électricité de France (EDF) announced that its only new build project at Flamanville (FL3) was now going to cost €8.5 billion to complete, as EDF added an additional €2 billion to the construction price of the single EPR reactor. The last cost revision by EDF was in July 2011. In 2005, when the final investment decision was taken, EDF estimated that it would cost €4 Bn (in €2012). Two years earlier, in 2003, the Ministry of Industry had calculated an investment cost of €2 billion (in €2012) (see here for background). In other words, even taking into account inflation, the current cost estimate corresponds to 4.5 times the government evaluation in 2003 and 2.5 times the EDF estimate of 2005. Just one day after the latest EPR cost adjustment, EDF’s only partner in the project, utility ENEL of Italy, announced that it was abandoning its 12.5% stake. Nomura, a leading financial services group, said of the decision “given ENEL’s need to reduce debt, a difficult outlook for its generation business in Italy and Spain, cost overruns at Flamanville, and the diminished strategic relevance of the overall partnership following the outcome of Italy’s anti-nuke referendum in June 2011, we see this as a sensible move on their part”. However, for EDF, there was no such reassurances, with UBS analyst Per Lekander stating: “In a way, the last 24 hours have killed French nuclear finally because the cost makes it totally impossible to export and now you have one of the few partners actively withdrawing; it looks really bad.” Credit rating Agency Moody’s changed the outlook on EDF’s Aa3 rating from stable to negative. Moody’s also changed the A3 rating of the group’s wholly owned UK subsidiaries EDF Energy and EDF Trading to negative. That will, no doubt, raise considerable attention in the UK, just days after the introduction of the Energy Bill.

What They Say…

“The Report sets forth in painstaking detail the actual experience and achievements of nuclear energy around the world.”

Peter A. Bradford

Former commissioner
U.S. Nuclear Regulatory Commission (NRC)
(in his foreword to the 2013 report)
“A vital public service... Uniquely independent, thorough, and timely assessment."

Amory B. Lovins

Chairman, Rocky Mountain Institute
“This annual publication has over 20 years evolved into the most reliable, strikingly original, comprehensive and penetrating assessment of the global nuclear industry.”

Praful Bidwai

Financial Chronicle
Delhi, India
"Amid the hype and PR, the smoke and mirrors, of the 'nuclear renaissance', the Status Report offers a hard-edged reality check."

Walt Patterson

Associate Fellow Chatham House
London, UK
“Fantastic piece of work. Must reading for any observer of nuclear energy."

Henri Sokolski

Executive Director Nonproliferation Policy Education Center
Washington DC, USA
“Reliable research based on cold, hard facts, unlike the hype and amnesia of industry sources.”

Scott Ludlam

“Félicitations pour la dernière édition du WNISR. Formidable comme d'habitude!”

Fulcieri Maltini

International Consultant Former Director of the Nuclear Safety Account, EBRD
“Thought-provoking as usual.”

Will Dalrymple

Editor Nuclear Engineering International
"The authoritative report on the status of nuclear power plants worldwide is the World Nuclear Industry Status Report."


Bangkok, Thailand
“Such an illuminating report.”

Sam Geall

Deputy Editor China Dialogue
London, UK
"An astounding collection of facts and figures, a myth-busting international overview… An eye-opening piece of work!"

R. Andreas Krämer

Chairman Ecologic Institute
Berlin, Germany
“I really appreciate you letting us excerpt your report! It’s incredibly well researched and comprehensive, so thank you!”

Stuart Luman

Associate Editor Bulletin of the Atomic Scientists