Nuclear War

  • Mychele Daniau / AFP / Getty Images

    Fraternité? The EPR reactor under construction in Flamanville, France

    (2 of 2)

    "We don't need Flamanville for France's energy consumption, and if we build another EPR at Penly, France will have 100 billion kilowatt-hours too many by 2020," says Dominique Finon, a director of nuclear research at France's prestigious think tank Centre National de la Recherche Scientifique. "It's a very expensive way to relearn nuclear."

    Expensive, indeed. The Olkiluoto EPR is already set to cost almost twice its initial budget, and the meter is still ticking, while the start date keeps getting pushed back. The Finns announced in May that they've moved it again, this time from 2012 to 2013, four years late and counting. Flamanville is $1 billion over its $4 billion budget and a year late so far.

    Areva says that's normal for the first units of a new design, and that's correct — to a point. There's also no doubt Olkiluoto has given France a black eye. Areva CEO "Atomic" Anne Lauvergeon has battled constant rumors that she would be fired, but she is expected to keep her job at least until her contract runs out in June 2011. Many people believe, however, that French President Nicolas Sarkozy would love to get rid of her. Lauvergeon, a celebrated executive who assembled Areva into a nuclear powerhouse, is not an easy target. "She's a scary adversary, not the kind of girl who will leave quietly," says an insider.

    Another leading actor who has been trying to shove Lauvergeon offstage is Henri Proglio, whom Sarkozy tapped to run EDF last year. Proglio and Lauvergeon are currently bickering over Areva's Eurodif plant in southeastern France. Eurodif is the perfect symbol of the way the old filière nucléaire worked. It was set up under de Gaulle to enrich uranium exclusively for EDF in an era when price didn't really matter. But now it does, and EDF wants a better deal. That could end up costing Areva 1,000 jobs and causing a nearly $650 million operating loss before a new Areva enrichment plant comes onstream in 2013.

    On the face of it, that's not an insurmountable problem — except that no one seems able to surmount it. The government has stepped in several times to reconcile its two fractious wards, since France owns 85% of EDF and 88% of Areva. All for naught. "Antipathy explains everything," says an executive for one of them. EDF and Russia's Rosatom agreed in June to cooperate on R&D;, but Rosatom also makes reactors. Will EDF forge an even deeper partnership with one of Areva's big rivals? It is a very sensitive question.

    France has set itself the ambitious goal of taking a third of the global market for new nuclear building — a goal the World Nuclear Association's Kidd calls "optimistic." France now has about 7%. To reach the goal, it probably needs a cheaper reactor in its product portfolio.

    Overdesigned for the post-Chernobyl freak-out, the EPR can withstand earthquakes, airplane crashes and missile strikes, among other disasters. This is very reassuring — and very expensive. "The reactors we have are a little too elaborate," says Paul Rorive, corporate director of nuclear activities at GDF Suez. "Does everybody really need all those options?" An Areva executive estimated that megawatt for megawatt, the EPR is probably 25% more costly than Kepco's APR1400.

    Team France might have had a better shot in Abu Dhabi if it had pitched the smaller, cheaper Atmea1 reactor designed jointly by Areva and Japan's Mitsubishi. Although the reactor exists only on paper, Jordan has approved the design for an upcoming bid, and GDF Suez will try to close the deal next year. Areva wants to build it. "We need the Atmea because our clients need it," says Areva's Saulnier.

    The industry also needs leadership. A long-awaited study commissioned by the French government was finally released last week. Following its recommendation, the Elysée Palace announced that EDF will henceforth be the undisputed leader for France's nuclear export program. The government also made clear that it wants EDF to buy as much as 15% of Areva, which is pretty much guaranteed to ruin Anne Lauvergeon's day.

    De Gaulle, France's postwar nationalist icon, is enjoying a surge in popularity these days. The French miss his single-minded, stubborn willingness to put what he saw as France's interests before petty concerns. But there's no reverting to the nuclear model he molded. Moreover, it would be a big mistake for the state to right this listing ship by taking back the tiller.

    "Everybody is trying to find his place. I don't even know what the filière nucléaire means anymore," says Rorive. "The old model worked for 40 years. But the world is different now, and perhaps it's time to change it." Individually, the parts of France's nuclear enterprise are some of the best in the world. Now France just has to figure out how to make them add up to a whole that isn't less than their sum.

    1. 1
    2. 2
    3. Next Page