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France underestimating costs of nuclear decommissioning

Leading energy academics are warning that France has insufficient funds reserved for decommissioning its nuclear reactor facilities.

The job rests with majority state-owned EDF, which established a €23bn fund for the purpose.

The €23bn ࢀ” much of it invested in equities and bonds ࢀ” has been set aside to cover what EDF estimates will be the €54bn cost of decommissioning the 58 nuclear reactors and safely storing their radioactive waste. This includes €23bn for dismantling the power stations, and €26bn for managing spent fuel.

Yves Marignac, director of energy research group WISE-Paris, told FT that the true cost of decommissioning and waste disposal for EDF will be far more than the company anticipates.

“The dismantling programme will cost more than EDF has estimated, maybe three times more,” he says. “It could potentially be disastrous for the group when they have to readjust their assumptions.”
Nogent nuclear power plant
By comparison France estimates it will cost €300m per gigawatt of generating capacity to take apart a nuclear reactor, far below Germany’s assumption at €1.4bn per GW and the UK of €2.7bn per GW.

The European Commission cautions against making comparisons between countries, because member states use different nuclear technologies, among other issues. However for more context, Germany has set aside almost €38bn for the decommissioning of 17 nuclear reactors. France, with more than three times as many reactors, has €15bn less for the same process.

EDF and the French government say they are confident they can deliver on the decommissioning programme, helped by the standardisation of the country’s reactors compared to other countries.

Jean-Marie Chevalier, professor emeritus at Paris-Dauphine University and partner at the Cambridge Energy Research Associates, says if the past in anything to go by, decommissioning costs for EDF are likely to be revised up. “What is clear is that we are underestimating the future cost of nuclear [decommissioning].”

There are other considerations in terms of pressure on resources. Net debt stood at €37.4bn at the end of 2015. Along with that EDF faces several major investments. As well as the à‚£18bn Hinkley Point project, it is involved in bailing out reactor designer Areva by buying a controlling stake in its reactor business for €2.5bn. It is also extending the life of France’s existing nuclear power stations until 2025, at a cost of €55bn.