France’s aging nuclear reactors and EDF’s debt crisis

EDF faces a seemingly impossible financial equation. It has colossal debt of €37 billion; it must deal with the complex €2.5 billion takeover of Areva; and find the money to extend the life of its 58 reactors at costs estimated between €60 and €100 billion up to 2030. (8)

Meanwhile EDF has been accused by Greenpeace France of grossly underestimating the cost of nuclear electricity.

Greenpeace claimed that if EDF disclosed the true cost of running its fleet of reactors in France while financing two new ones in the UK, it would be declared bankrupt.

“In summary, the French nuclear fleet is at the end of its course, dilapidated and dotted with deficient parts. At the same time, the finances of EDF are in such a deplorable state that the company could soon join Areva in bankruptcy, and is in any case unable to properly maintain its reactors.”

NuClear News No 90 , 26 Nov 16  Problems discovered at Areva’s metal forge at Le Creusot have been growing over the past six months and are now even threatening to derail EDF’s takeover of Areva’s reactor business.

Last spring when Economy Minister Emmanuel Macron visited to tell the workers at Le Creusot that he had every confidence in the nuclear sector, despite the difficulties, 400 files which were being examined for suspected “anomalies” had to be hastily moved out of the meeting room. Now, six months later a crane has been moving prefabricated office buildings into position so that 6,000 records concerning nuclear components – 2.4 million pages – forged at Le Creusot over the last 60 years can be re-examined. Areva has had to accept that the original 400 suspicious files are just the tip of an iceberg and not the only ones containing “irregularities”. 50 people are now trawling through the paperwork and as many more are being recruited for a job that will take at least another eighteen months.

EDF’s CEO Jean-Bernard Lévy says if Le Creusot’s “problems prove insurmountable, the acquisition will not happen”. (1)

With potentially more than half of France’s 58 reactors affected by the “carbon segregation” problem the French nuclear watchdog, the Autorité de Sûreté Nucléaire (ASN) has ordered preventative measures to be taken immediately to ensure public safety. ASN confirmed that, as of late October, 20 reactors were offline and more could be shut down over coming weeks.

Questionable Materials and Documentation

At the heart of France’s nuclear crisis are two problems. One concerns the carbon content of the steel used in critical reactor components, steam heat exchangers, and other components manufactured or supplied by AREVA SA, the French state-owned nuclear engineering firm and global producer of nuclear reactors. The second problem concerns forged, falsified, or incomplete quality control reports about the critical components themselves. Excessive levels of carbon in the steel parts could make them more brittle and subject to sudden fracture or tearing under sustained high pressure, which is obviously unacceptable.

Steam generators from 18 reactors have carbon levels that are above the acceptable level. Some of these were forged at Le Creusot, but others were forged in Japan by JCFC, a subcontractor of Areva. Twelve reactors equipped with JCFC steel are still at a standstill and will be in December while inspections are carried out.

The massive outages are draining power from all over Europe. In the event of severe cold weather this winter, there could be blackouts. Worse, new questions continue to swirl about both the safety and integrity of EDF’s nuclear fleet, as well as the quality of some French- and Japanese-made components that EDF is using in various high-profile nuclear projects around the world.

In October EDF was forced to reduce its 2016 generation targets from 395–400 TWh to 380– 390 TWh, while estimates for nuclear output in 2017 have also been lowered to between 390 TWh and 400 TWh. For perspective, annual nuclear production averaged 417 TWh in the period 2005–2015.

Flamanville

The problem was originally discovered at the Flamanville EPR project in 2014. Since then an internal probe at Le Creusot where many of the components in question were manufactured, has uncovered new anomalies. AREVA is now reported to be reviewing all 9,000 manufacturing records at the forge dating back as far as 1943, including files from more than 6,000 nuclear components.

This autumn there have been almost weekly revelations resulting in plant shutdowns, extended outages, reduced generation, and lots more questions. According to ASN there are now a significant number of reactors offline, with more to be inspected in the next few weeks. “We are now finding carbon segregation problems from components coming from both Le Creusot and [the Kitakyushu-based Japan Casting & Forging Corp.] JCFC plant. As for now, there [are] 20 EDF reactors offline,” the official said, noting that the number will fluctuate as inspections take place.

The analyses performed by EDF thus far have found that since 2015 certain channel heads of the steam generators manufactured by Le Creusot and JCFC “contain a significant carbon concentration zone which could lead to lower than expected mechanical properties,” according to ASN. The Japan Times reports that the JCFC is now also under scrutiny by Japan’s Nuclear Regulation Authority.

Shaun Burnie for Greenpeace said “As a result of substandard manufacturing in Japan, citizens in France have been unknowingly exposed to the risk of catastrophic failure of critical reactor components which could result in a reactor core meltdown. Japanese-supplied steel is now at the centre of France’s unprecedented nuclear crisis the scale of which has never been seen in any country. All 12 reactors supplied by JCFC are either in forced shutdown or about to be. It lacks all credibility that the Japanese nuclear industry would claim that there are no implications for the safety of their own nuclear reactors. The steel production records released in France did not reveal the scale of excess carbon, which was only found after physical testing. There are currently no plans for such tests in Japan. That is wholly unacceptable. There are many urgent questions that need to be answered by the industry and the NRA, and with full public disclosure and transparency.” (2)

Energy traders and analysts warn that the French market needs to prepare for longer maintenance periods in coming years given the age of the nuclear fleet and the continuing design flaw revelations. With the average French reactor now more than 30 years old, equipment will need to be replaced more frequently, and increasingly stringent safety requirements will mean that components could be delayed, especially as ASN imposes additional checks. The safety inspections and other reviews “will lead in particular to extensions of certain planned outages,” EDF said in a press release.

 Erring on the Side of Safety?

Despite the outages and findings from the carbon quality investigations, EDF continues to downplay the risk. “The safety margins are very large and the carbon content does not undermine integrity or security, even in the case of an accident,” an EDF spokesperson told Le Monde newspaper. But questions about quality control practices at Le Creusot continue to grow. Indeed, the greater the scrutiny, the more problems are being discovered. The number of components affected by irregularities and already installed in operating reactors increased from 33 known issues in April to 83 by the end of September. Startlingly, irregularities affecting just the Flamanville EPR project increased from two to 20 during the same period.

While EDF and AREVA are dealing with costly damage control, ASN and other agencies are erring on the side of caution. Indeed, the ASN representative said, “We take no risks. That is the rule. If we don’t know the dangers of the carbon segregation, then we must take the reactors offline until we know what the situation is and [can confirm that] it’s not dangerous.”

ASN revealed that AREVA has now identified at least 87 irregularities concerning EDF reactors in operation, including vessels, steam generators, and main primary system piping, plus the 20 issues for parts intended for Flamanville 3, and one more affecting a steam generator planned for installation in Gravelines 5. Inspectors have also found four irregularities affecting transport packaging for radioactive substances. ASN said that whatever the outcome of these investigations, the irregularities “reveal unacceptable practices.”

External Parties Push for Answers

After the discovery of anomalies in the composition of steel in certain zones of the vessel closure head and the vessel bottom head of the EPR reactor being built at Flamanville in 2014, an internal audit was carried out and released in April 2015, suggesting the existence of many more anomalies. These were initially downplayed by ASN and AREVA. But in September 2015 an independent evaluation conducted by Large and Associates for Greenpeace France really set the cat amongst the pigeons. “The nature of the flaw in the steel, an excess of carbon, reduces steel toughness and renders the components vulnerable to fast fracture,” said the report’s author, John Large. The Greenpeace report, “Amplified the questions ASN already had,” said an ASN representative.

12 reactors have been identified by ASN to have carbon problems in replacement steam generators forged by JCFC. In these reactors initial surface tests were followed by more invasive studies. The first reactors to enter scheduled refuelling outages for a more thorough examination were Tricastin 1 and 3. The early nondestructive inspection results for the JCFC bottom channel heads at these reactors revealed an alarming 0.39% level of carbon present, almost 100% greater than the maximum permissible level. That finding, with its associated reduction in material toughness, rendered the component vulnerable to fast fracture, reported Greenpeace in a late October update. ASN decided to order the shutdown of all but one of these reactors and these shutdowns will remain in force until EDF can demonstrate each reactor is safe to re-enter service.

Uncertainty Remains

At a French parliamentary hearing into the situation on October 25, ASN said it would need another year or two to examine the thousands of documents at the Le Creusot foundry and more anomalies and irregularities will probably be discovered. (3

As of late October 2016 ASN has confirmed the following:

  • Six reactors have been granted approval to restart and are operating normally: Blayais 1, Chinon 1 and 2, Dampierre 2 and 4, and Saint-Laurent-des-Eaux B2.
  • Seven reactos are in planned outages and have been, or are being, inspected. They are: Bugey 4, Civaux 2, Dampierre 3, Gravelines 2, Saint-Laurent-des-Eaux B1, and Tricastin 1 and 3. (4) The Times reports that the re-start of Civaux 2 and Dampierre 3 has been delayed until 31st December.

(5) · Five reactors have been ordered by ASN to be taken offline to conduct checks before 18th January 2017. They are: Civaux 1, Fessenheim 1, Gravelines 4, and Tricastin 2 and 4. (6)

  • Three reactors are currently scheduled to remain unavailable throughout the winter months. They are: Bugey 5, Gravelines 5, and Paluel 2.
  • One reactor has been ordered by ASN to shut down following the detection of an irregularity in the lower shell of the steam generator. That unit is Fessenheim 2.
  • Incidentally, Paluel 2 has been offline since May 2015. Its maintenance period is continuing, following an incident on March 31, 2016, in which a 465-ton steam generator tipped over during removal. (7)

EDF’s Debts

EDF faces a seemingly impossible financial equation. It has colossal debt of €37 billion; it must deal with the complex €2.5 billion takeover of Areva; and find the money to extend the life of its 58 reactors at costs estimated between €60 and €100 billion up to 2030. (8)

Meanwhile EDF has been accused by Greenpeace France of grossly underestimating the cost of nuclear electricity.

Greenpeace claimed that if EDF disclosed the true cost of running its fleet of reactors in France while financing two new ones in the UK, it would be declared bankrupt. Greenpeace commissioned an audit by AlphaValue, the equity research company. The French government has agreed to inject €3 billion into the group this year and has renounced dividend payments until next year. Shares in EDF, 85% of which are owned by the French state, have lost almost a third of their value in the past year and the company is no longer listed on the Paris blue-chip index.

The AlphaValue report described EDF as an “uncompetitive firm – incapable of reacting rapidly and efficiently to the variations in electricity needs and the changes created by the liberalisation of European markets”. It said that EDF’s rivals had written down the value of their nuclear plants because of the move to renewable energy and the fall in electricity prices and that EDF had failed to follow suit. Juan Camilo Rodriguez, author of the report, said the company might have to close 17 of its 58 French reactors to meet the government’s requirement that nuclear power should provide 50 per cent of the nation’s electricity in 2025, down from 75 per cent now.

“The provisions to safeguard the burden of financing the decommissioning of the French reactors are far from sufficient. [If 17 are closed], the group should increase its provisions by more than €20 billion.” Mr Rodriguez said the cost of handling nuclear waste added at least €33.5 billion to that figure. “Whatever scenario is retained, an adjustment of the nuclear provisions . . . would lead to the bankruptcy of EDF from an accountancy point of view,” he added. The report said that EDF would need to find a further €165 billion during the next decade to finance projects such as Hinkley Point and the renovation of reactors in France. EDF says it will spend €51 billion renovating its reactors and £12 billion on Hinkley Point. A spokesman for EDF accused AlphaValue of making erroneous calculations that failed to take account of long-term electricity price movements and differences between France and other European markets. (9) Greenpeace filed a complaint against EDF and its CEO, Jean-Bernard Lévy, for “stock trading offences” at the end of November and EDF responded by suing the group for making “false allegations”.

Greenpeace has asked the public prosecutor “to open a preliminary investigation or to appoint an investigating judge”, saying that “shareholders, investors but also French citizens are being misled by EDF and its CEO”. (10)

According to Stéphane L’homme, Directeur de l’Observatoire du nucléaire: “In summary, the French nuclear fleet is at the end of its course, dilapidated and dotted with deficient parts. At the same time, the finances of EDF are in such a deplorable state that the company could soon join Areva in bankruptcy, and is in any case unable to properly maintain its reactors.”   http://www.no2nuclearpower.org.uk/nuclearnews/NuClearNewsNo90.pdf

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