The crash landing of the French nuclear industry – Collapse of EDF and Areva on the Paris Stock Marktet

Automated Translation of the french article (machines suck!)

by Sortir Du Nucleaire  – March 3rd, 2009

– EDF lost 9% on the Paris stock market yesterday, and has lost over 70% in the last few months;

– Areva lost more than 40% in a few months and borders on  bankruptcy;

– The EPR sales (China, India, Italy, etc) are virtually or already canceled (South Africa);

– EPR’s construction projects in Finland and France are on the path to becoming industrial and financial disasters;

– crazy Investments of EDF and Areva in Great Britain and the USA.

In contrast to the false idea maintained by France’s political leadership, starting with Mr. Sarkozy, the French nuclear industry is not in good health: it is on an abyss.  In fact, although championed by journalists, EDF and Areva are in major industrial and financial difficulties.

Crash of EDF and Areva on the Paris stock market

In the past several months, EDF’s stock on the Parisian market has gone from 87 to 28 Euros or close to a 70% loss, of which 9% happened in one day (Mar-2-09).  On their side, the stock of Areva has gone from 820 to 327 Euros, or a 60% of fall!  Of course, with the world-wide crisis, a lot of businesses have gone down but, if nuclear power was really a value of future, EDF and Areva would linger… instead of being among the most touched ones.

Obama contributes… zero dollars for nuclear power loans in the USA (where EDF and Areva invested!)

Beginning in 2009, Mr. Obama’s stimulus plan in the USA gave zero dollars to the nuclear industry that had hoped for $50 billion in loan guarantees.  The latter were affected to the development of the renewable energies.  No French leader commented on on this gigantic disappointment for the world-wide nuclear industry, and specially for EDF and Areva that invested in spite of the common sense to the USA to participate in the  supposed “renaissance of nuclear power”… that is fainting.

Areva in payment suspension?

Areva is looking for 3 billion Euros to balance their 2009 budget, and already canceled (November 25 2008) their uranium mining project in midwestern Canada.  Another major disappointment for Areva happened on December 5, when South Africa canceled the 12 reactors that it wanted to construct.

Meanwhile, Areva’s EPR Olkiluoto reactor construction site in Finland, which was launched in February 2005, has turned into a disaster: the project has been delayed 38 months and been penalized 2.4 billion Euros by the Fins.  Originally sold for 3 billion Euros, the reactor costs, therefore are in reality 5.4 billions… while awaiting again additional costs.

Moreover, the departure of Siemens as a partner, announced in January 2009, will force Areva to find 2 billion Euros to repurchase stock held by their former ally.

Areva has blindly invested in the USA to participate in the supposed “renaissance” of more nuclear power:

in May 2008, Areva announced its choice of Bonneville Idaho for a new uranium enrichment facility.

in October 2008, Areva announced plans to invest more than 360 million dollars in the State of Virginia to make heavy components for the American nuclear sector.

EDF leaden by its raids (Great Britain, USA) and by EPR’s Flamanville

In Great Britain, EDF spent a fortune (15 billions) to purchase British Energy and its obsolete nuclear reactors… just before the world-wide crisis: today, the price would be 3 to 4 least times less.  At the same time in the US, EDF paid the high price (5 billions) to purchase 50% of the nuclear activities of the American company Constellation. Constellation which fell last fall during the big crunch would have ended up in the hands of of the billionaire Buffet, but was instead sold at a higher price to EDF.  In both cases, EDF will have to justify spending money to construct reactors.

During this time, the EPR of Flamanville accumulates disappointments: the work-site of this reactor, launched in December 2007, has already been delayed up to a year before being completed.  Its price has passed 3.3 billions to 4 billion, but a growing number think that it will cost 5 or 6 billion… or more.

Sarkozy does not sell nuclear reactors…  to France!

We must not be misled by the announcements of journalists, Areva or EDF on allegged exports, such as the supposed sale February 4th, 2009 of two (possibly up to six)  EPR’s to India.  In reality, only a nonbinding memoradum of agreement was signed.  Simarly, the 2 supposed EPR’s sold to China at the end of 2007 remain in a  draft mode:  some excavation work took place at the end of 2008 at the Taishan site.

In the same manner, the splashy announcement for an EPR with Italy is virtual and will likely never be constructed.

In fact, nuclear power demands huge financial investments for  electricity production that takes eight to ten years to come online and make a return on investment 30 years after.  Of such investments, already difficult to plan before the world-wide financial crisis, are even more improbable today, including in China and in India.

Finally, Mr. Sarkozy does not sell nuclear reactors to France: a true “commercial success”.  Mr. Sarkozy should understand that nuclear power is an energy of the past, archaic, polluting and, compared in  investment, creates 15 times less than jobs than the alternate ones (energy economies + renewable energies).

Original french link to the above story:

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