EDF and Enel Plan Four Nuclear Power Plants in Italy

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Researched by Industrial Info Resources (Sugar Land, Texas)--On February 24, energy supplier Electricite de France SA (EPA:EDF) (EDF) (Paris, France) and power supplier Enel SpA (BIT:ENEL) (Rome, Italy) signed an agreement to set up four nuclear power plants in Italy. This will be the first nuclear power project in the country after the Chernobyl incident when a national referendum put a stop to Italy's nuclear industry. The agreement was signed at the ongoing Franco-Italian summit in Rome. Enel CEO Fulvio Conti and EDF Chairman Pierre Gadonneix signed the agreement in the presence of French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi. The two national leaders signed a separate agreement on civilian nuclear cooperation.

EDF and Enel have agreed to form a 50:50 joint venture that will carry out feasibility studies to develop four European Pressurized Reactors (EPRs). The joint venture aims to bring the first nuclear power plant into operation by 2020. In order to achieve this, the two firms would need to commence project construction by 2013.

According to the agreement, Enel would hold a 60% stake in the plants and a majority stake in the electricity withdrawal rights. Enel would also operate the plants. Each plant would be operated as an individual company with share ownership open to third parties. In such a situation, Enel and EDF would hold a majority stake or a minimum of 51% between them. This agreement will enable EDF to be part of the nuclear program being planned for Italy by Enel. At present, however, construction of the plants still depends on changes in the regulatory and legislative frameworks as well as on the technological options.

The two companies signed a second agreement under which Enel's participation in the new nuclear program of France will be extended. Enel will join EDF in the construction of France's second EPR at Penly in northern France. Construction of the Penly reactor is expected to begin in 2011 and the reactor is scheduled to be operational from 2017. Enel already has a stake of 12.5% in EDF's 1,660-megawatt (MW) EPR power plant that is currently under construction at Flamanville, also in northern France. This is France's first EPR unit. Enel will have a similar holding in the Penly project, which has recently been authorized by the French government. Enel's investment in the Penly reactor would be around $636 million.

After the signing of the agreement, Gadonneix said the agreement was a continuation of the two companies' cooperation and commitment to supply Europe with a secure supply of power and to develop safe and competitive energy free of carbon dioxide emissions.

In 2007, EDF and Enel had signed an industrial partnership that provides for Enel to take part in France's third-generation nuclear program. Including the Penly reactor, Enel has the option of participating in five new generation reactor projects in France. EDF's EPR plans for France extend up to 2023. Under the same agreement, EDF can choose to participate in any nuclear project developed by Enel in Europe, particularly in Italy.

France is a nuclear power giant with 58 nuclear power reactors in operation. The reactors are being operated by EDF who has been principal contractor on the projects. The total capacity of the operating reactors is 63,260 MW. While the planned capacity of the Flamanville reactor is 1,660 MW, the Penly project will have a capacity of 1,600 MW. EDF is the state's main electricity generation and distribution company. It plans to export a large share of the electricity generated from the new projects to its European neighbors.

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