Electricite de France to Form "Club" of Nuclear Power Utilities Using EPR Technology

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Researched by Industrial Info Resources (Sugar Land, Texas)--In an interview with Le Monde, a French daily evening newspaper, Chairman and CEO of Electricite de France (EPA:EDF) (EDF) (Paris, France), Pierre Gadonneix, said that the firm would like to create a "club" of major power generation firms that have adopted the European Pressurized Reactor (EPR) technology for nuclear power generation. With the recent exit of Siemens AG (NYSE:SI) (Munich, Germany) from Areva NP (Paris) in order to join forces with Rosatom (Moscow, Russia), Gadonneix expects competition in the nuclear power market to intensify and stressed the need for users of the EPR technology to come together.

The EPR is a third-generation technology developed by Areva NP, set up as a 66:34 joint venture between Areva SA (EPA:CEI) (Paris) and Siemens. However, in January this year, Siemens announced that it would sell its stake in the joint venture to Areva SA within a period of three years. Earlier this month, Siemens entered into a memorandum of understanding with Rosatom to set up a joint venture for further development of the Russian Pressurized Water Reactor technology.

EDF has already found partners for the "EPR club" in Constellation Energy Group Incorporated (NYSE:CEG) (Baltimore, Maryland), China Guangdong Nuclear Power Corporation (Shenzhen, China), Electrabel SA (Brussels, Belgium) - a subsidiary of GDF Suez SA (EPA:GSZ) (Paris), and Enel SpA (BIT:ENEL) (Rome, Italy).

EDF is hoping that E.ON AG (OTC:EONGY) (Dusseldorf, Germany) will agree to be a member. EDF, which will be the operator of the first EPR power plants in France at nuclear power stations in Flamanville and Penly, is in talks with E.ON for a possible German involvement in the Penly EPR project. Construction of the Penly EPR is scheduled to begin in 2012 and the plant will be commissioned in 2017. EDF is also planning to set up 10 EPRs outside of France - four in the U.S., four in the United Kingdom, and two in China - in collaboration with foreign partners.

In February this year, Enel and EDF entered into an agreement to develop at least four EPRs in Italy. Enel asserted that the EPR is the best available technology because of its higher productivity and less generation of waste. However, the firm also stated that it was open to all available technologies, including Canadian and Russian, and would choose from among the available options based on economic and environmental requirements. In the U.S., EDF is acquiring a stake of 49.99% in the nuclear business of Constellation Energy for $4.6 billion.

Gadonneix also said that EDF is awaiting the approval of L'Autorite de Surete Nucleaire (ASN), the French nuclear safety authority, for extending the lifespan of the firm's 58 nuclear reactors by 10 to 20 years. This would entail a cost of $519.5 million per reactor, which is only 10% of the cost of developing a new reactor based on EPR technology. The ASN has asked EDF to supply technical ratifications for extending the lifespan of the reactors to 60 years.

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