Frances Next President May Face $3 Billion Nuclear Hangover

[bananas]

Source: Bloomberg

- Not enough left in the kitty to bail out both EDF and Areva

- Sale of assets from phone company to Renault may be considered

Whoever succeeds Francois Hollande as France’s president may find one of their first tasks in office will be selling off some of the nation’s prized assets to prop up the state’s nuclear industry.

That’s because the government is as much as 3 billion euros ($3.2 billion) short of the 7.5 billion euros it has said it needs this year to fix the financial problems of Areva SA and Electricite de France SA, said two government officials with direct knowledge of the matter. Hollande will try to find an answer before he leaves office in June, one of the people said. If he can’t, his successor must decide how to plug the gap, said the other person.

France is preparing to rescue its nuclear industry after EDF was weakened by falling European power prices and Areva lost billions on a long-delayed project in Finland. The president must either increase the national debt or weigh politically sensitive privatizations of holdings in anything from automakers such as Renault SA to the former phone monopoly -- a tall order with the first round of presidential elections just three months away.

“It’s not that simple to raise these funds, either because of market conditions or for strategic or social reasons,” said Senator Maurice Vincent, a member of the ruling Socialist Party who sits on the finance committee. “Half of the holdings are in the depressed energy sector which needs to be bailed out, and a quarter is in the defense sector where you have limited divestment leeway, so that doesn’t leave much wiggle room.”



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Read more: https://www.bloomberg.com/news/articles/2017-02-03/france-s-next-president-said-to-face-3-billion-nuclear-hangover

[Denzil_DC]

1. Also, the article doesn't mention the terrible problems with France's nuclear plants

France’s nuclear-energy champion is in turmoil

THESE are difficult times for Electricité de France (EDF), the country’s quasi-monopolistic electricity provider, serving 88% of homes. Outages at no fewer than 18 of the 58 EDF-owned nuclear reactors that provide three-quarters of France’s electricity have meant a slump in production: the company says annual nuclear output could fall to 378 terawatt hours (TWH), from 417 TWH last year. Eight reactors are currently lying idle and several may not restart for weeks or months. Power stations are burning coal at a rate not seen since the 1980s. As electricity imports and prices soar, officials are having to deny that a cold snap could bring blackouts.

The cause of the crisis—possibly faulty reactor parts throughout EDF’s fleet—suggests it may not be easily contained. France’s nuclear regulator, the Autorité de Sûreté Nucléaire (ASN), this summer ordered urgent tests of reactor parts, mostly bases of cylindrical steam generators. Inspectors are worried about high carbon levels found in steel forged by Creusot Forge, which is owned by Areva, another French firm, and by Japan Casting & Forging Corporation, a Japanese supplier. In some pieces carbon deposits are over 50% above permitted levels, risking fracture in case of a sudden change in the temperature of the steel.

The extent of faulty forge work is as yet unknown, as is whether Areva employees falsified data. ASN is clearly surprised that Areva failed to spot the problem. It is now auditing thousands of files stretching back over decades. More faults are likely to emerge, the regulator reckons.

The cost for EDF is rising. As well as lost earnings from shuttered plants, switching one generator (a reactor can have three) can take six months and cost €150m ($159m). And its decision in November finally to stump up €2.5bn for Areva Nuclear Power (most of Areva, including Creusot Forge) now seems rather like paying to swallow a highly radioactive dinner.

http://www.economist.com/news/business/21711087-electricit-de-france-has-had-shut-down-18-its-58-nuclear-reactors-frances-nuclear-energy