TL: CRISIS IN THE FRENCH NUCLEAR INDUSTRY - Economic and Industrial Issues of the French Nuclear Power Programme SO: Greenpeace International (GP) DT: February 1991 Keywords: greenpeace reports france nuclear power problems economy cost risks europe gp electricity production reactors / [Note: this electronic copy has lost some spaces between words, and is therefore not suitable for print reproduction. It is maintained in the database for the use of researchers. -gb ed] (GP) CRISIS IN THE FRENCH NUCLEAR INDUSTRY Economic and Industrial Issues of the French Nuclear Power Programme Prepared by Dr Franois Nectoux for Greenpeace February 1991 FOREWORD The French nuclear programme is going through a deep crisis. The seriousness of the situation, emphasised by a number of recent official reports, is not yet fully perceived abroad. In the UK, for instance, the French nuclear programme is still seen as a model of engineering excellence and cost effectiveness. Not so long ago, Mr Cecil Parkinson MP, then Secretary of State for Energy, stated in a radio interview thatthe Central Electricity Generating Board's (CEGB) intended Pressurised Water Reator programme (so hopelessly uneconomical that it was to be curtailed soon afterwards in order to save the electricity privatisation scheme) would be based "on the very successful French industry" (1). Meanwhile, the French nuclear industry has recently had a dismal economic performance, with Electricit de France (EDF) making considerable losses and finding itself unable to reduce its huge financial debts. Furthermore, its reputation for technological excellence has been weakened by a spate of serious incidents, especially in 1989, highlighting important safety shortcomings andgeneric defects on French PWR nuclear plants. Industrial firms, which have been the backbone of the French programme, are restructuring themselves away from nuclear activities, and thousands of jobs have already been shed in the process. Some ofthe most far reaching technological choices (such as the Fast BreederReactor (FBR) and the Magnesium Oxide (MOx) nuclear fuel manufacturing system) are now proving to be costly 'white elephants'. At the same time, the confidence of the French public in the nuclear sector is reaching an alltime low. The government itself has recently been criticised in official reports for its lack of direction, and serious disputes have erupted between the government and some of the main firms in the sector (EDF, Compagnie General Electrique and so on),concerning, for instance, their own corporate structure. This report intends to highlight the economic lessons to be learned from the French experience, thus complementing the report: 'The Economic Failure of Nuclear Power in Britain' (2), published by Greenpeace in 1990. Analysing the dominant position of nuclear powerin the French energy system, it stresses the scale and the underlying causes of the current economic crisis, and dispels the misconceptions often held on the cost efficiency of the French programme. The scope of this document is therefore limited to the economics of French nuclear power. The safety and engineering aspects are not discussed, except where they have a direct impact on economic performance. The substance of the following pages is based on widely available French documents and articles, many of them written by EDF staff. The author is deeply indebted to Steve Thomas of the Science Policy Research Unit (SPRU) for his help in analysing some of the developments mentioned in this report. Gordon McKerron, also of SPRU,and Mycle Schneider, of WISE Paris, have offered valuable comments. Lynn Bagnall has edited the whole report, managing the difficult task of translating and shaping the somewhat muddled 'franglais' of the author into proper English. Many thanks also to staff members of Greenpeace UK (especially Jane Wildblood, Rick Le Coyte, Bridget Woodman, Claire Douglas and Melanie Bhagat) who pushed the project through. Errors and omissions are the author's sole responsibility. Dr Franois Nectoux -------------------------------------------------- Franois Nectoux [Background] Trained as an economist and a political scientist, Franois Nectoux holds a doctorate of the Sorbonne University and a diploma of the Institute of Political Sciences of Paris. He has taught economics inAlgiers and has spent several years as a consultant for the Organisation for Economic Cooperation and Development (OECD) in Paris, before working as a senior researcher at Earth ResourcesResearch (ERR) in London, specialising in natural resources analysis and environmental risk assessment. He is now Senior Lecturer in French Studies at South Bank Polytechnic, London. -------------------------------- CONTENTS Foreword i Contents v List of tables vi Acronyms vii Summary 1 Introduction 19 I BACKGROUND OF THE FRENCH NUCLEAR POWER PROGRAMME 23 1. Development of the programme 2. Objectives of the French nuclear programme 3. Political and sociocultural factors II THE PROBLEM OF OVERCAPACITY 35 1. An ordering programme gone awry 2. Growth of electricity exports: the solution? III THE FRENCH PROGRAMME IN OPERATION:PERFORMANCES 49 AND PROBLEMS 1. Construction times 2. Operational performance 3. Technical problems in French reactors 4. Unreliability of EDF service to consumers 5. The fall in load factors IV NUCLEAR GENERATING COSTS AND ELECTRICITY PRICES 65 IN FRANCE 1. Costs of nuclear electricity generation 2. Price of electricity in France 3. Financial difficulties of EDF IV STRATEGIC ISSUES AND PROBLEMS OF THE FRENCH NUCLEAR PROGRAMME: 89 1. Impact on balance of trade 2. Exporting French nuclear technology: a dream shattered? 3. Problems of the nuclear manufacturing industry. CONCLUSIONS: WHICH PATH FOR THE 1990s? 107 Appendix 1 French civil nuclear programme 111 Appendix 2 Supplementary statistical information 117 Appendix 3 Generating of a 'reference' nuclear unit 123 References 127 LIST OF TABLES 4 Table 1 Electricity generating capacity in France 22 Table 2 Nuclear electricity generating capacity in France 26 Table 3 Firm commitments by EDF (number of reactors and 35 net rated capacity in GWe) Table 4 Imports and exports of electricity by EDF (TWh) 41 Table 5 Performance of mature French PWRs by time period 61 Table 6 Average load factors for reactors aged one year or 61 more Table 7 Evolution of generating costs for 'reference' and 70 coalfired stations in France from 1973-1986 Table 8 Generating costs of coalfired and nuclear 'reference' 73 generating according to load duration Table 9 EDF annual results 82 Table 10 Evolution of EDF debt 82 Table 11 Nuclear power investments by EDF and CEA 83 ACRONYMS ABB: Asea Brown BoveriU AFME: Agence Franaise pour la Matrise de l'Energie ANDRA: Agence Nationale pour la Gestion des Dchets Radioactifs AGR: Advanced Gascooled Reactor AIEA: Agence Internationale de l'Energie Atomique B & W: Babcock and Wilcox BNFL: British Nuclear Fuels Ltd BWR: Boiling Water Reactor CANDU: Canada Deuterium Uranium reactor CEA: Commissariat l'Energie Atomique CEGB: Central Electricity Generating Board CFDT: Confdration Franaise Dmocratique du Travail CGE: Compagnie Gnrale Electrique (name changed to AlcatelAlsthom from 1/1/91) CGT: Confdration Gnrale du Travail CHP: Combined heat and power plant CIF: Cost, insurance, freight (for international trade statistics) COGEMA: Compagnie Gnrale des Matires Nuclaires CSISN: Conseil Suprieur de l'Information et de la Sret Nuclaires CPO, 1,2...: Contrats de Programme 0, 1, 2...0 DCF: Discounted cash flow DGEMP: Direction Gnrale de l'Energie et des Matires Premires (Ministre de l'Industrie) DIGEC: Direction du Gaz, de l'Electricit et du Charbon (Ministre de l'Industrie) EDF: Electricit de France EEC: European Economic Community EBES: Socits Runies d'Energie du Bassin de l'Escaut (Belgium) ENEL: Ente Nazionale per l'Energia Electtrica (Italy) EFR: European Fast Reactor FBR: Fast Breeder Reactor FDES: Fonds de Dveloppement Economique et Social FF: French Francs FOB: Free on board (costs only, as opposed to CIF values) GDF: Gaz de France GDP: Gross domestic product GE: General Electric Co (USA) GWe: Gigawatt (electric) = one million kWe GSIEN: Groupement des Scientifiques pour l'Information sur l'Energie Nuclaire IEA: International Energy Agency IAEA: International Atomic Energy Agency (AIEA in French) Intercom: Socit Intercommunale Belge de Gaz et l'Electricit INESTENE: Institut d'Evaluation des Stratgies sur l'Energie et l'Environnement en Europe IPSN: Institut de Protection et de Sret Nuclaire (CEA) IRDI: Institut de Recherche Technologique et de Dveloppement Industriel (CEA) IRF: Institut de Recherches Fondamentales (CEA)[3 INSTN: Institut National des Sciences et Techniques Nuclaires kWh: Kilowatthour kWe: Kilowatt (electric) KWU: Kraftwerk Union AG (Germany, Siemens subsidiary) LWR: Light Water Reactor MEP: Member of European Parliament MOx: Mixed oxide fuel MSI: Mise en Service Industriel MWe: Megawatt (electric) = 1 million watts = 1,000kW MWj/t: Megawatt/jour/tonne NPI: Nuclear Power International (KWU & Framatome) NERSA: Centrale Nuclaire Europenne Neutrons Rapides S.A. NUS: National Utility Services PEON: Commission Consultative pour la Production d'Electricit d'Origine Nuclaire PSA: Probabilistic Safety Assessment PWR: Pressurised Water Reactor REP: Racteurs Eau Pressurise (PWR in English) RGN: Revue Gnrale Nuclaire R & D: Research and Development RNR: Racteur Neutrons Rapides RWE: Rheinisch Westfalisches Elecktrizitatswerk AG (FRG) SBG: Schnell Bruter Kernkraftwerksgesselschaft GmbH (FRG) SCPRI: Service Central de Protection des Radiations Ionisantes SMD: Simultaneous Maximum Demand (PMA in French) SO2: Sulphur dioxide} 3 SPRU: Science Policy Research Unit (University of Sussex) T & D: Transmission and distribution TGV: Train Grande Vitesse toe: ton oil equivalent TWh: Terawatt hour (1 billion kWh) UCPTE: Union for the Coordination of Production and Transmission of Electricity UNGG: Uranium Natural Graphite Gas reactors (magnox) UNIPEDE: Union Internationale des Producteurs et Distributeurs d'Electricit UTS: Unit de Travail de Sparation (SWU in English) -------------- SUMMARY As the respected French daily newspaper "Le Monde" noted in March 1990, the French nuclear programme is now in the midst of an economic and industrial crisis (3). These difficulties cast a shadow on the two major successes claimed for French nuclear power: its contribution to the reduction of France's energy dependency on imported oil, and the engineering achievement of building a large number of nuclear plants in record time, plants which, by international standards, operated highly successfully for most of the 1980s. The current crisis is born out of wrong and biased demand forecasts and irresponsible nuclear generation costing assumptions made by the nuclear establishment upto the mid 1970s but not recognised as such before the mid 1980s. Itis also due to shortcomings in technological and safety issues and to inflexible corporate structures, denounced by recent official reports which shocked the nuclear establishment in 1990 (the Rouvillois Reporton the CEA, the public nuclear agency (4), and the 1990 Tanguy safety review report for EDF (5)). EDF has been making considerable losses (FF 4 billion in 1989), and, upto 1990, has been unable to reimburse even a fraction of the FF 232.5 billion debt contracted for the construction of nuclear plants. The security of supply to French consumers was one of the worst in Europe during the 1980s, as little had been invested in the distribution system. Far from reaping the benefits of a maturing nuclear generating capacity, the electricity supply system now suffers from the effects of premature ageing of equipment, with significant generic defects reducing the operating performance and considerably increasing the maintenance costs of a large number of reactors. As much as 75% of national electricity was nuclear generated in 1989(6) and 79% in 1990 (192). However, currently it has been estimated that there is an overcapacity of some eight reactors. It is not surprising, therefore, that EDF has to practise load following on an increasing number of its reactors; as a consequence, real nuclear generating costs in France are higher than the well publicised official) estimates, which are base load generating costs. Contrary to popular belief, the price of electricity in France was not significantly lower than in the UK during the 1980s. It is significantly cheaper than in West Germany or Italy for instance, but it is more expensive than in Denmark and the Netherlands. An important, but often forgotten, reason for relatively cheap electricity in France is that a proportion of the demand has been satisfied up to now by extremely cheap hydroelectricity. Another aspect of the current crisis is that the nuclear manufacturing sector has been forced away from nuclear activities by the reduction in orders, and a number of jobs are being lost in the process. This 'reconversion' is proving quite difficult in some instances, for example for the national nuclear agency, the CEA, which is suffering from 'doctrinal fixation', according to the Rouvillois report (4). The main consequences of these various problems are presented below in more detail. Total dependence on nuclear power France now relies on nuclear power for nearly 80% of its electricity,against 8% in 1977. This unprecedented dependence on nuclear technology has made France the standard bearer of nuclear energy throughout the world. But such reliance on a single source of electricity supply is by itself a high risk strategy, with a number of drawbacks. Building the current nuclear capacity has required a considerable investment programme, which has been forcefully and speedily implemented since the early 1970s. A total of 55 reactors were operating at the beginning of 1990, with a total net capability of 52.6GWe: this included the four remaining older UNGG units, 49 PWRs, andtwo FBRs. Another three PWRs have been commissioned during 1990, five are under construction, and another order is expected in at the end of 1991 (7). Despite widespread criticism, EDF is still seriously considering ordering as many as seven large 1450 MWe PWRs between1994 and 2000 (8). A range of industrial installations has also been built, mostly by subsidiaries and joint ventures of the CEA, covering the whole fuel cycle. The speed at which this programme has been implemented has only been made possible because of the specific characteristics of the centralised State, the rational and tight division of responsibilities between the main planning and engineering partners (such as EDF, Framatome, Alsthom and the CEA), and the existence of a homogeneous technocratic and managerial lite. This structure is unique in the industrialised world, and it would be difficult to implement a nuclear programme of similar size anywhere else. France's dependence on nuclear power will increase in the next few years. In 1990 79% of national electricity was of nuclear origin, less than 13% from hydroelectricity (against nearly 21% in 1988) and 8% from fossilfired thermal stations (192). It is planned that some 85%of national electricity will be of nuclear origin at the end of the century. The consequences of this lack of diversity of supply could potentially be dramatic: indeed, the emergence of generic faults on nuclear reactors, resulting in the temporary closure of a number of stations, could, if coupled with a drought, create a situation in which France would be powerless, or at least forced to pay over the odds to maintain security of supply. This scenario is not a figment of the imagination. Indeed, the dire financial results of EDF in 1989 are largely due to such a sequence of events. A number of reactors, especially of the most recent 1300 MWe generation, suffered from technical failures which reduced their availability; at the same time, a drought had limited the contribution of hydroelectric power. EDF had to use older coalfired plants and to import electricity from other neighbouring countries. Since the government refused to allow supplementary electricity price increases, EDF made a considerable loss and found itself unable to fulfil its commitment to start repaying its debt (9). Consequences of overcapacity The President of EDF has conceded that the nuclear overcapacity has reached 5 reactor units (10). Other recent estimates, in the Rouvillois Report, put this figure at 7 to 8 reactors in 1990, "or around 10 GWe"(4). Whatever the true situation, this overcapacity can be alleviated only to a limited extent by the growth of net electricity exports, which accounted for 12% of EDF production distributed in 1990. Also, the average export prices charged by EDF (unpublished, but estimated to be) between 19 centimes/kWh (11) and 22.4 centimes/kWh (4)) do not even seem to cover EDF's generating costs (currently estimated at 22.5 centimes/kWh). Electricity demand, has been growing too slowly toabsorb the production of electricity, despite an aggressive marketing drive by EDF aimed at the industrial and domestic sectors (especially domestic heating, partly through a cross- subsidising tariff structure). There are many economic consequences of such overcapacity. First, it increases the lifetime generating costs of nuclear plants, since they are not used at maximum load. Second, it immobilises capital with high opportunity costs. Third, it has brought a sudden drop in plant orders, creating a crisis in the nuclear manufacturing industry: the French nuclear equipment manufacturers were geared up for a six orders/year capacity at the end of the 1970s, and are now suffering heavily from the reduction of the ordering programme since 1982. Indeed, there have been no new firm orders since 1987. Furthermore, the 'single track' technology choice made by EDF, coupled with the changing demand structure, is creating new problems for the utility. Since electricity demand is increasingly peaking, EDF could finditself in a situation of undercapacity in winter (peak period) and of overcapacity for most of the rest of the year (12). Proper security of supply would require investment in gas turbines and other means of generation. Indeed, EDF is currently studying the conversion of conventional parts of nuclear units soon to be closed down, into gas-fired power plants (13). Construction times and planning: the end of a successful era? The French nuclear industry has achieved the considerable engineering success of building a large number of reactors in a very short time,most of them on schedule. Indeed, early in 1978, EDF was engaged in the construction of 24 reactor units, in various stages of completion. This has not been equalled anywhere else in the world. Construction times at the end of the 1970s and in the early 1980s fell to unprecedented levels. On average, the 900 MWe PWR units of the CP1 and CP2 series required only five years from first concrete to grid connection. This has helped to reduce capital costs as well as the amount of interest paid during construction. However, the situation has degraded since 1983, partly because the most recent PWRs have required slightly longer lead times, but mostly because of the build up of overcapacity. EDF has decided to 'smoothdown' construction schedules, in order to give a minimum work load to constructors over a longer period of time, as they were beginning to suffer from the irregular pattern of work. It is also postponing the increase of generating capacity. As a consequence, construction times have been voluntarily increased by EDF: on average, for the last twoPWRs of 900 MWe, 12 units of 1300 MWe and the first two giant 1400MWe units, the construction times have been stretched by 8.5 months,and some by a full year (14). In future, it is unlikely, according to EDF itself (10), that short lead times similar to those of the previous decade will be achieved; construction sites are now much more difficult to find and lay out, and the slow pace of orders will reduce the impact of the 'series effect'. Itis also expected that it will be more difficult to build multiple units ona single site, a factor which helped reduce lead times in the past. Maturation problems and impact of load following The high operating performance achieved by EDF nuclear plants during most of the last 15 years has recently been undermined by the increased occurrence of technical problems on many of its latest 1300MWe units and by the forced reduction in load factor due to overcapacity and load following. The annual energy availability of 900 MWe French PWR reactors has been very high, in fact better than planned initially: between 1986 and1989, it reached between 78 and 83% far higher than in the USA forinstance. At the same time, the number of outages fell significantly(16). However, these good results have been marred recently by the lesser performance of the new 1300 MWe units. Increases in unplanned outages and maintenance have reduced their energy availability to 62%in 1989 against 72% in 1988 (17). The growing number of technical failures and incidents, due to premature ageing of equipment, generic defects and human errors, and the resulting need for an increased maintenance and repair programme in both 900 MWe and 1300 MWeunits, will make it more difficult for EDF to maintain the level of performance of the smaller units and to achieve the 74% design energy availability target on the new 1300 and 1450 MWe units. EDF has been expecting the 1990 availability of the larger units to be at least 10% lower than hoped (18). A second aspect of operating performances which has a significant impact on nuclear power economics in France is the evolution of load factors. Given the current overcapacity and that load variations havegrown considerably between periods of low and of high demand becauseof changing consumption structure, a number of nuclear units are operated in load following mode. As a consequence, load factors have fallen since the mid1980s by at least 5%. In 1989, the average load factor was only 61.8%, with nine PWRs used at less than half their capability (19). Growing economic impact of generic defects The French nuclear programme has had its share of incidents in reactors and fuel processing installations over the years. Some of them seriously affected the safety of the plants for instance, the incident at the Bugey station in 1984 or at Saint Laurent des Eaux in 1981. However, EDF was taking great pride in the reduction in unplanned outages in the mid-1980s. This overconfidence was shattered first by the sodium coolant leak at the Superphnix FBR in May 1987, which closed it down for 20 months, and which was followed by a series of other technical failures forcing further shutdowns. Superphnix, the'jewel in the crown' of the French nuclear programme, has operated at full rating for only 6 months since its commissioning five years ago(20), and its availability has been less than 55% (21). A second blow came by a spate of incidents on other reactors in 1989,largely due to a growing number of generic faults and to problems of ageing equipment. As a consequence, the 1990 Tanguy Report for 1989(5), the annual review of the EDF chief safety inspector which was leaked early in 1990 to the green MEP Didier Anger, represents a watershed for EDF (3). It recognises at last that at least three types of problem are affecting PWRs in France: generic faults on heavy equipment (steam generators and pressurisers); premature ageing of components (including accelerated corrosion in steam generator tubes and wearing down of control rods); and errors in maintenance and operating procedures (especially on safety valves; illustrated by the dramatic maintenance errors at the Dampierre and Gravelines stations, which left faulty safety valves undetected for two years and 15 months respectively. The 1990 Tanguy Report also emphasises the importance of the so called 'human factor', and it underlines the fact that the 'safety culture'of EDF staff needs to be improved. This problem is made more difficultto resolve because of the reliance of EDF on computer controls for safety (22) and by the growing disaffection of reactor technicians for their working conditions (23). The Tanguy report does not, however, cover other well- documented problems, including generic faults (substandard electrical wiring in a number of plants, design defects incontrol rooms, and so on). Despite these limitations, the 1990 Tanguy report expresses a clearer official view of the current risk levels than ever before. Previously,the technical problems of French reactors, thoroughly documented by several independent assessments (including the 1984 Greenpeace International Nuclear Reactor Hazard Study (24)), were simply dismissed, or at best EDF was claiming to have corrected them. The conclusion of the report, often quoted in the UK press (25) states:"One has to consider that, in the present state of safety standards in EDF stations, the probability of a [significant radioactive release forcing the implementation of emergency plans] occurring during the next twenty years can be a few per cent". This indicates that the previous over-optimistic French estimates of the probability of a few percent of such accidents have been at last put in line with the results of Probabilistic Safety Assessments (PSA) in other countries. In fact the internal version of the 1990 Tanguy report even indicated a probability of a significant accident over the next 10 years, instead of 20 as appeared in the glossy version finally released to the press. The 1990 Tanguy report also signals the recognition by EDF that accident probabilities have now to be applied on some 60 reactors: with at least 1200 reactor years to come in the next 20 years, even a low probability of a significant accidental radioactive release of 1.1 per100,000 reactor years corresponds to a probability of more than 1% of such an accident occurring somewhere in France during the next two decades. The current safety and engineering problems have a real economic impact. Since France made the choice to build a large number of similar reactors in a few, closely related series, the existence of generic faults multiplies the repair and maintenance requirements, and also, as the 1990 Tanguy report noted, reinforces the need for added safety features for public acceptance reasons. Indeed, the recent discovery of defects in the water filtering system of several reactors brought severe criticism of EDF from the Industry Minister, for"withholding information and [he] instructed the utility to draw up swiftly a plan of control and security measures."(25) Just published at the time of completion of this report, the 1991 Tanguy Report for the year 1990 shows that the situation has not significantly improved (193). Repair and maintenance costs have always been underestimated in France (27), but the recent generic faults are already forcing new andunexpected 'post operational capital costs': EDF has started a programme of replacing all the steam generators on 25 of its 900 MWePWRs, at a total cost of at least FF 9 billion (28), and is currently considering starting a similar programme on some 1300 MWe units. Planned maintenance outages will also increase in the early 1990s as many reactors reach their 'decennial review' schedule, taking them out of the grid for four to six months at a time. ## Therefore, maintenance costs and post operational capital expenditure have begun to increase and they are likely to continue to do so in thefuture: as could have been predicted, the benefits of the maturation ofthe French nuclear capacity have quickly given way to the added costs of premature ageing and generic faults. Furthermore, the heavy investment programme in nuclear power has not even given a satisfyinglevel of security of supply to the French consumer. The quality ofservice is recognised to be appalling, even by the EDF director (10).Indeed, despite recent improvements, cuts still averaged more thanthree hours per consumer in 1989, more than three times greater thanin West Germany for instance. Upward trends in nuclear generating costs*@ French nuclear power is often credited with some of the lowest nucleargenerating costs in the world. For instance, the International EnergyAgency in its most recent review (29) estimates that it is more than+)30% cheaper than in West Germany, 37% cheaper than in Japan. However, this kind of comparison is flawed because of the accountingmethods being used (for instance the DCF calculations use a 5%discount rate), and because it assumes base load estimates for futureunits, whereas any new nuclear plant in France would be generatingmarginal power, and would operate in load following mode. Since around 50% of generating costs in French nuclear plants arecapital costs, the base load generating costs per kWh (officially aroundFF 0.22/kWh nowadays) increase very rapidly if the plant is not used allthe time, and become closer to those of coalfired stations. An officialstudy concluded in 1983 that generating costs for a nuclear plant usedat 60% of load are 73% higher than if operated at base load (30). Since ahigh proportion of nuclear stations is being operated in load followingmode, it is now accepted that new stations, if required on capacitygrounds, should be coal or gasfired ones. Furthermore, official estimates of nuclear generating costs per kWhfor future base load stations increased in real terms by more than 90%between 1973 and 1984 (31): EDF was underestimating generatingcosts in the same period during which it was successfully lobbyinggovernments for an accelerated "tout lectrique, tout nuclaire"programme. This also shows that the expectations for economies ofscale of an oversized programme and larger reactors have not been met. Since then, latest official estimates by the Ministry of Industryindicate that nuclear generating costs at current prices have been keptconstant since 1984 (32), corresponding to a fall in real terms of morethan 20%. However, these costs refer to future 'reference' stations notyet completed or built, assumed to operate in base load mode in an'optimal' generating system. In addition, the discounting rate has beenreduced from 10 to 8% since the 1970s, and many other accountingprocedures (such as those concerning decommissioning costs) alsopoint to an underestimation of generating costs. Furthermore, it cannotbe emphasised enough that EDF does not publish real historic costs forexisting nuclear units, such as those which, in the UK, have contributedso much to the demise of the Magnox and AGR programmes. Real capital costs for further nuclear stations are likely to increase,because of the growing siterelated costs and the reduction ofeconomies of scale and series effect, due to the slowdown of the-) investment programme (15). Other factors point towards highergenerating costs, including operating costs (especially for maintenanceand repair, see above), fuel costs and decommissioning costs. The expected growth in fuel costs is largely due to the technologicalchoices made more than a decade ago aimed at the development of a'plutonium economy'. Partly justified by the 'synergy' between civil andmilitary nuclear programmes in France, to use a term coined by a topCEA decisionmaker (33), these choices were justified on economicgrounds as well by EDF, which also chose to invest heavily in spent fuelreprocessing facilities. However, it is now clear that they will be verycostly. The reprocessing cycle, and especially the FBR and the MOx (mixedoxide fuel) programmes, were justified on the grounds that uraniumprices were expected to increase during the 1990s. The choice wastherefore for EDF and the CEA to build FBRs in order to breed plutonium,to be mixed with enriched uranium mostly obtained from thereprocessing of spent fuel. Reprocessed and MOx fuel would then beused in the numerous PWR reactors. However, world prices for uranium fell dramatically in the 1980s (fromUS$ 43/lb in 1978 to around US$ 10/lb in 1989). There is littleprospect of demand exceeding supply in the foreseeable future (34). Inaddition, the generating costs of the FBR, despite considerablesubsidies in R&D and in capital costs, are far higher than was promisedby the CEA, at least 2.5 times higher than for PWRs (35). EDF now claims that the expected capital cost differential betweenfuture FBRs and PWRs has fallen to around 1.3 (10), but it haspostponed the construction of Superphnix 2 to well past the turn ofthe century, whereas the CEA was claiming in the late 1970s that asmall family of FBRs would be operating before the year 2000. European partners in the Superphnix venture have, up to now, refusedto participate in the construction of further reactors, and EDF and theCEA are now increasingly worried that the French government will notrenew the administrative operating licence of the existing FBR (36). The costs of reprocessing spent fuel and of manufacturing the MOx fuelare also higher than expected, and they have been estimated to increasegenerating costs by some 6 % (37). ) Nuclear generating costs have been kept down to their current levelsthrough considerable subsidies, and writing off losses (estimated tohave reached FF 30 billion in 1987 prices between 1979 and 1985) infavour of EDF in the 1970s and early 1980s, and through the publicfunding of civil nuclear power R&D by the CEA: this reached a total ofFF 58 billion in 1988 prices between 1980 and 1988 (30) for a periodduring which the French programme was already well established. As noted above, future nuclear generating costs are likely to increasefor a variety of reasons, such as the impact of the slowdown of theprogramme on capital costs and the growing fuel and maintenancecosts. Other cost increases are likely to arise from the evolution ofthe electricity economy in France. Electricity consumption has not beengrowing as fast as EDF was forecasting, despite the considerablereduction of energy saving programmes in France since 1987 and theforceful marketing campaigns conducted by EDF in the industrial anddomestic sectors (the number of electrically heated homes hasincreased by 370,000 a year between 1983 and 1988 (39)). Demand ispeaking more and more, reducing the load factor of nuclearinstallations. If and when new stations are required for that reason,gasfired, clean coalfired or renewable electricity generation are noweven more cost effective, without even considering their fundamentalrole in diversity and security of supply. Even the Ministry of Industrynow recognises that "the appropriateness of some diversification in thegenerating capacity should be examined" (32). Are EDF electricity prices competitive? It is often assumed that French electricity prices are lower than inother European countries, including the UK, and the claim is made thatthis is a direct consequence of the cost effectiveness of the Frenchnuclear power programme. In fact, the case is not that clear cut. It is difficult to establish a proper base for international electricityprice comparisons, because of external factors, such as exchange ratevariations and fundamental differences between tariff structures.Existing figures for 1988 show, for instance, that EDF electricityprices for medium sized industrial users were cheaper by some 15 to20% than those in Great Britain, and that EDF electricity prices fordomestic consumers have been slightly higher than those in Great2)Britain (but this is largely due to the impact of VAT on electricityprices in France). At the European level, comparisons show that EDF prices are lower thanin Belgium (which has a similar proportion of nuclear power), FRG andin Italy, but are higher than in the Netherlands, Denmark andScandinavian countries (40). EDF has been modifying its tariff structure since 1986 in order todevelop its base load market, giving significant price advantages to'base load' consumers through marginal costs pricing. Efforts have beenmade to provide highly advantageous price arrangements to largeindustrial users (who were complaining of high electricity prices) suchas aluminium smelting (Pechiney) and chemical manufacturing (Exxon).The EC Commission recently forced EDF to correct a longterm supplycontract with Pechiney because there were clear indications of pricedumping (41). Factors other than the size and characteristics of nuclear powercapacity have to be considered to explain the differences of pricebetween France and other countries. For instance, a significantproportion of winter electricity in France is provided in normal yearsby cheap hydropower (the socalled 'hydroelectricity rent') (42): thishelps to contain marginal electricity costs. Secondly, the antiinflationary policies of the government have forced EDF to limitcurrent price increases (and to reduce prices in real terms by around25% since 1984), at the cost of financial losses and the inability of EDFto repay its debt. The financial distress of EDF With the publication of EDF accounts for 1989, the president of theutility declared: "We give the sad sight of a disasterstricken industry"(43). Indeed, with a total debt which has grown from FF 174 billion in1982 to FF 235 billion in 1989, and with net losses of FF 4 billion in1989 on a turnover of FF 147 billion (44), the financial situation of EDFwas not particularly healthy. It was not an exceptional situation: since1974 EDF made a profit for only seven years, and has been ten years inthe red, sometimes by a considerable amount (nearly FF 8 billion in1982, some 9% of its turnover). Total losses since 1974 have been FF30.2 billion against a profit of only FF 2.7 billion. Accounts for 1990 show a recovery of EDF finances with a profit of FF0.1 billion on a turnover of 156 billion. This profit, according to MrDelaporte, EDF president, is "extraordinarily small", and has only beenachieved through an emergency costcutting programme and a cut of1,700 jobs (194).The Cour des Comptes (the French National AuditCommission) has published harsh criticisms of EDF's financialmanagement several times since the early 1990s, the last instancebeing in its 1990 Report to the French President (45). EDF is now caught between the need to follow the government'sdirectives to reduce electricity prices in real terms and therequirement to reduce its indebtedness, with a generating capacitywhich is lacking in diversity (demonstrated in 1989) and which isparticularly sensitive, therefore, to any disturbance affectingoperating performance or demand patterns (for instance, weatherconditions). Ultimately, there is a deep conflict of interests between EDF and thegovernment, as the authorities now expect the consumer and theeconomy at large to reap the benefits of the huge investmentprogramme of the last two decades. On the other hand, EDF now requiressignificant price increases to maintain its financial equilibrium andstart repaying the debts contracted for the development of the nuclearprogramme. Impact on French trade balance and energy dependency One significant achievement of the nuclear power programme in Franceis that it has helped to reduce the country's dependency on imported oil,which has been a major political and economic policy goal since theearly 1970s. Considerable claims are made for the role of nuclearpower in reducing the country's trade deficit. The impact of nuclear power development has undoubtedly been highlypositive in this respect, although figures have often been inflated bythe pronuclear lobby. Calculations made by EDF itself claim that, in ayear such as 1987, the balance of trade was improved by some FF 39billion through the implementation of the nuclear programme (46),compared with a coalbased programme, taking into account exports ofnuclear fuel and electricity as well as supplementary power8>)consumption and imports due to the nuclear programme. This estimate, however, is likely to be inflated because of the way EDFdefines the coalbased alternative scenario and does not consider theeffects of a more intensive nonnuclear R&D policy (especially in coalburning technologies) and a more forceful energy efficiency policy. Failures of the exportoriented strategy The French nuclear industry has not managed to export the large numberof nuclear plants that was expected, largely because the world marketdid not materialise. Despite an intensive marketing strategy, especiallyin Third World countries, which was widely criticised for its lack ofconcern about the proliferation of nuclear weapons and human rights(for instance in Pakistan, South Africa and Iraq), the Frenchmanufacturer, Framatome, only exported eight commercial nuclearreactors between 1970 and 1989, and participated in the constructionof a handful of others in joint ventures. Framatome is still trying very hard to secure new orders, alone or injoint ventures; it is a question of survival following the considerablereduction of orders from EDF. Offers were made to India in 1989 (but itseems now that the USSR will be preferred). President Mitterrandhimself promised two 900 MWe reactors to Pakistan in February 1990,with attractive financial conditions (47). Negotiations with Hungarystarted in 1990 for the supply of two similar reactors (48). Because of the lack of prospects for nuclear plant exports, Framatomeis seeking to develop its maintenance activities at an internationallevel, but it is encountering strong competition (including from EDFitself), especially in important markets such as the USSR and EasternEurope (9). Another important export market, fuel reprocessing, in which COGEMAhas world leadership, is now much more uncertain than in the past,with some of the clients installing their own plant (such as Japan), andnew clients (such as Germany) only partly filling the gap. There isovercapacity in the uranium enrichment market and EURODIF, theCOGEMA subsidiary, is now in trouble since an agreement was signedbetween their European competitor URENCO and US interests for theconstruction of a new plant (49).:) Industrial crisis in the nuclear manufacturing sector; The whole of the French nuclear manufacturing industry is in deepcrisis. Built on the assumption that five to six units would beconstructed per year, it is no longer sustainable at current levels oforders. The scramble towards joint ventures with foreign firms,efforts for reconversion (50), acquisitions of firms in other industrialsectors, and the competition between French industries to control thegrowing repair and maintenance market, cannot disguise the fact that,as some commentators put it, the nuclear industry is at risk of becoming the steel industry of the 1990s. A number of nuclear firms,such as Framatome, have significantly reduced the number of jobs. Theunions are deeply worried that EDF will drastically reduce itsworkforce in the future, especially in the distribution services. The structure of the whole industry is currently undergoing arevolution. The old order, dominated by a string of giant public sectorgroups (EDF, CEA, CGE renamed AlcatelAlsthom since 1991 ,Pechiney) which controlled the whole industry, either directly orthrough specialised subsidiaries and joint ventures (COGEMA,Framatome, Alsthom, Comurex, Neyrpic...), is now called into question.The privatisation of the giant electrical engineering andtelecommunications group CGE in 1986 was the start of a restructuringprocess which has already brought profound changes in the managementand ownership of Framatome, the reactor manufacturer, the capital ofwhich is now controlled again by a CEA EDF holding consortium, aftera brief period during which managerial responsibility was seemingly inthe hands of the private sector (51) through the majority shareholdingof CGE. This has brought with it some dramatic conflicts concerningFramatome's corporate policy, between CGE and Framatome andbetween CGE and the government itself (52). Behind this lurks theunresolved but fundamental question of whether nuclear power policiesare still a governmentcontrolled, strategic issue, or simply anindustrial policy problem in which the private sector would be a majorplayer. The conflict was finally settled late in 1990, when it becameevident that the government and the President himself were bent onregaining control of Framatome (53). CGE's shareholding was reducedfrom 52% to 44%, with the CEAEDF holding a controlling 46%, the=~) nationalised bank, Crdit Lyonnais, taking a 5% stake and Framatomeemployees sharing the remaining 5% (54). Another conflict has just erupted between EDF and the government,concerning the corporate structure of the utility itself: EDF wants achange in its corporate legal structure so that it can call on privateinvestors' funds and enter into exchange of capital with foreigncompanies for future investments. The government has reacted verystrongly, refusing what could be seen as a first step towardsprivatisation (55). Furthermore, it is more and more evident that the old policy of nationalindependence of the 'strategic' French nuclear industry is now a dreamof the past, and it cannot survive alone. Alsthom is now integrating itsturbine activities with those of GEC in the UK. Framatome iscollaborating with KWU, a subsidiary of Siemens (and competitor ofCGE), for the export of nuclear installations and the design of futurenuclear units. It is also collaborating with Babcock & Wilcox in the USAfor fuel management activities (56). The CEA is also in crisis. This is not the first time, but a number ofissues now confront the organisation: the slowdown of the nuclearordering programme, the failure of the FBR programme of which it wasthe main proponent, and the criticisms directed at its lack ofaccountability and cost effectiveness brought demands for it to bedismantled. This was avoided at the cost of considerable internalrestructuring (59), after which the recently released Rouvillois reportcriticised its 'doctrinal fixation' at all costs on its own nuclear powertechnologies (58), and asked for a clearer separation of its industrialand R&D activities. Conclusion: the growing costs of a high risk nuclear strategy? The choice was made in France in the 1970s to develop an electricitysupply system which would be almost totally dependant on a nucleargenerating power base built around the PWR and the FBR technologies.This gamble has brought with it a range of problems which are startingto have an impact on the economics of electricity. The maturation ofthe nuclear generating capacity is not bringing the expected economiesof scale and improvements in operating performance. The prematureageing of equipment and the multiplication of generic faults on a whole@)series of reactors, and the absence of economies of scale in largernuclear plants now completed, also indicate that the low generatingcosts of nuclear power promised in the 1970s have not materialised,despite the allround subsidies received by EDF and the CEA. The use of nuclear plants in load following mode for satisfying ademand which is peaking more and more often is also increasinggenerating costs. The problem will not be solved by the completion ofthe few nuclear plants still to be commissioned and by the possibleorder during the second half of the 1990s of another batch of up toseven large PWRs. Despite its technological achievement, the French nuclear powerprogramme appears, therefore, to have brought the country into a periodof fragile electricity supply with high cost aspects. Even withoutconsidering the safety risks of the nuclear system, a full rethink of theelectricity supply system policies is necessary. This would take Franceaway from the reliance on such an unwieldy and increasingly costlypower source, restructure electricity prices away from crosssubsidising tariffs established for marketing purposes, help to developa more diverse supply system, and reaffirm (following the conclusionsof the recent Brana Report (59)) the priority of energy efficiency policies over the nuclear industry corporate interests. INTRODUCTION 1990 was a bad year for the French nuclear programme. At the end ofJanuary, the publication of Electricit de France's annual accounts for1989 revealed that it was in the red by FF 4 billion and that it had noteven started reimbursing its enormous FF 232.5 billion debt (17), incontradiction to the agreement reached the year before with thegovernment in the EDF Medium Term Development Plan 1989-1992 (50). Soon after, two confidential reports the Rouvillois Report (4) and the1990 Tanguy Report (5) were leaked to the media, and finallyreleased. Their publication created quite a stir in the nuclearestablishment. The first one was critical of the management andcorporate policy of the Commissariat l'Energie Atomique (CEA), thepublic nuclear R&D agency also responsible for most of the nuclear fuelcycle, accusing it of 'doctrinal fixation' at all costs on the developmentof its own nuclear technologies (58). It also acknowledged that EDF hasbuilt a surplus of seven or eight nuclear reactors. The second, the EDF Safety Review for 1989, acknowledged the gravityof the technological and safety problems encountered in a large numberof PWRs, especially in 1989, a year during which many of the mostmodern reactors developed generic faults and several plants sufferedfrom maintenance errors with high safety risks. It also criticised EDFfor the poor 'safety culture' of its staff (5). These documents followed a report to the Prime Minister (the BranaReport (59)), which was critical of the demise of energy efficiencypolicies since 1986 and the lack of commitment of public authorities:it warned of the 'perverse effects' of the electricity marketingstrategies of EDF aimed at increasing demand in specific segments ofthe market, especially the domestic sector. Furthermore, it was announced in February 1990 that NERSA (thecompany owning the giant Superphnix FBR long considered as the'jewel in the crown' of the French nuclear programme, which had justbeen temporarily put back into operation after a 20 month outage due toD)a sodium coolant leak), had decided to slowdown the plutoniumbreeding process in the reactor, as it was a lossmaking exercise in aperiod of cheap nuclear fuel material (61). The French government was at the same time adding to the sense ofcrisis by postponing, for at least one year, the exploratory developmentof four high level radioactive waste storage sites (62) and of a numberof dams in the upper Loire Valley needed for nuclear reactor coolingbecause of public protest (63). It is not surprising, in this context, that the respected daily paper 'LeMonde' started an article on nuclear power policies in France by statingthat "The French nuclear industry is in crisis" (3). What is quiteastonishing is the change which has come about in a few years from thetriumphant attitude of the nuclear industry, to the current recognitionby many decisionmakers in the industry itself that hard times are nowcoming. The French nuclear industry is still seen as the flagship of nuclearpower throughout the world. France's commitment to it has beengreater than any other country's. In 1990, some 79% of its electricitywas generated from 58 nuclear plants, with a total installed grosscapacity of nearly 58 MWe. The financial and human resources devotedto nuclear power have been considerable, and the engineering side ofthe programme is generally recognised as a considerable achievement,with short construction times and efficient planning. Furthermore, theinstalled capacity is credited with providing cheaper electricity thanin most European countries; and with having helped the country, devoidof significant domestic fossil fuel resources, to shake off itsdependency on imported oil for electricity generation, which wascrippling its balance of trade in the late 1970s and early 1980s. Can this image of unmitigated success be reconciled with the gloomypicture of economic crisis which now affects nuclear power in France? A more realistic assessment of the economics of the French nuclearpower programme is needed, particularly if the French and UKsituations are compared. The question is often asked, how has it beenpossible to develop nuclear power so potently on one side of theChannel, and to have stopped it for all practical purposes on theopposite shore? The demise of the recent PWR programme in the UK, inthe wake of the privatisation of the electricity supply industry, hasG.)been analysed in great depth from the economic point of view in areport for Greenpeace (2). This analysis of the French situationtherefore complements that report, emphasising the specificconditions which have been conducive to the development of the Frenchprogramme, and also stressing that EDF is answering new challenges,with the accelerated investment phase completed and the technical andeconomic problems of a maturing programme now emerging. Whilst for many countries, nuclear power programmes can be largelyjudged on whether they produce electricity cheaply and reliably, it isnecessary to take a broader approach for France, since nuclear power isso hegemonic in the energy supply system and occupies such a centralplace in the whole economic and industrial strategy of the country. Inparticular, strategic issues have to be examined, such as the risksinvolved in being so dependent on one single electricity supplytechnology, and the opportunity costs of the industrial, financial andhuman resources that have been sunk in the nuclear programme including the fuel cycle, the generating plants, and the wholemanufacturing sector servicing it. As a consequence, this report is divided into five parts. The firstbriefly describes the main characteristics of nuclear power in Franceand introduces the political and economic background to itsdevelopment, from the types of reactors and the phases of the orderingprogramme, to the main objectives of the strategy and the historical,cultural and political factors that have made its implementationpossible. In the second part, the consequences of the current overcapacity areexamined, as well as the efforts of EDF to market electricity at homeand abroad. In the third part, the performance of nuclear power in France is examined, focusing on specific aspects, such as reactor constructiontimes and operating performances, and the ways in which these havebeen influenced by factors such as a lower growth in demand thanexpected. The fourth part examines in more detail the evolution of generatingcosts and the prices of electricity to consumers, comparing them withother European countries. It also analyses the financial situation ofI) EDF, especially in relation to the debt problem and to the difficultrelationship between the utility and the government. The last part examines briefly the strategic risks and issues of theprogramme; it reviews the effectiveness of the nuclear export strategyand the oil substitution policy, and the current prospects of the Frenchnuclear manufacturing industry, which is now in a situation ofindustrial overcapacity. The examination of the various economic aspects of the French nuclearpower programme in this report can only be seen as an introduction to afull analysis. However, it is hoped that it will clearly indicate thatthe nuclear power path forcefully followed in France since the early1970s has not been, and is not, such a glowing economic success that itcan be adopted as a model for the rest of the industrial world. PART I BACKGROUND OF THE FRENCH NUCLEAR POWER PROGRAMME Prior to examining the objectives of the French nuclear powerprogramme and the political and socioeconomic context which made itpossible, it is worth briefly reviewing its current status and itsevolution through time. ELECTRICITY GENERATING CAPACITY IN FRANCE (situation on 1-1-1990, GWe) ______________________________________________ Type of equipment EDF Others Total ______________________________________________ Thermal Fossil fuel 16.2 6.6 22.8 Thermal Nuclear* 50.9* 1.7 52.6* Hydroelectricity 23.1 1.7 24.8 Total 90.2 10.0 100.2 ______________________________________________ Source: EDF, Rsultats Techniques d'Exploitation 1989, 1990. Note: * excluding Chooz 1. Development of the programme The early history of the French nuclear programme offers somesimilarities with that of the UK. Strongly grounded in the developmentof the military nuclear deterrent in the 1950s, the ordering of the firstM,"generation of commercial power stations occurred between 1956 and1965. These were mostly Magnoxtype reactors, the UNGGs, which weregraphitemoderated, cooled with carbon dioxide and used naturaluranium as fuel. These massive installations (furnished with up to2,080 t of graphite and 320 t of uranium in the reactor core) were ableto provide plutonium for military purposes as well as generating power. Other types of reactor were developed in parallel. A heavy watermoderated, gas cooled reactor was ordered in 1961, and theconstruction of a small PWR was started near the Belgian border in1960. The FBR path was further explored with the order of the 250 MWePhnix reactor in 1968. By 1970, France was operating or building a total commercial nuclearcapacity of 2890 MWe. However, the situation had radically changed inthe late 1960s, as a series of bitter arguments erupted between theCEA, which favoured the retention and development of French designs, and EDF, which mostly lobbied for the adoption of light water reactordesigns (62). The CEA and EDF carried along with them the heavyweight engineering firms which had bet on either the UNGG filire orthe various American brands of BWR and PWR technology (65). At one time, apart from the UNGG, no less than four reactortechnologies were developed in France, the PWR, the BWR, a CANDU typeof heavy water reactor, and large commercial FBRs. However, thedecision was taken in 1970 finally to abandon the UNGG and the heavywater technologies, and to order a PWR under Westinghouse licence forthe Fessenheim station, to be built by Framatome and Alsthom. Fivefurther PWRs were ordered between 1970 and 1974, making whatbecame the 'Programme 1970' (or CPO). The BWR was still a contender:indeed, as late as February 1974, two orders and six options wereplaced for 1000 MW BWRs, to be built by CGEAlsthom and the CEMunder licence from General Electric (66). Thus, during this period, the indecisiveness of French authorities andthe conflicting lobby of industrial groups were as noticeable in Franceas they were in the UK. But, following the oil crisis and an intenselobbying campaign by the nuclear establishment, major decisions weretaken in 1974 and 1975, which were to shape the nuclear powerprogramme and the nuclear manufacturing industrial sector into thestreamlined, centralised and technically efficient organisation thatP4)#was acclaimed in France during the late 1970s and the 1980s. It was during this period that the expression le tout lectrique, toutnuclaire was coined, to describe the type of programme developed bythe public sector. On the 5 of March 1974, the Messmer governmentopted for an accelerated nuclear plants ordering programme (knownsince as the 'Messmer programme'). In April, firm orders and optionswere announced by EDF for 12 PWR units of 900 MWe; this was tobecome the basis of the 'Contrat de Programme no 1' (CP1) series ofreactors. This was complemented in December 1975 by the announcement of further orders or options on ten similar units (programme CP2). Thesame month, eight orders or options on the new 1300 MWe PWRs wereannounced (the future P4 series) (66). In subsequent years, optionswere confirmed and new orders placed, especially in 1980 (the 'Giraudprogramme'), when eight PWRs were announced for future years. Theway these orders were organised in practice by EDF is described inTable 3, and discussed in section II 1. Furthermore, in August 1975, the government abandoned the reactortechnology diversification policy, and cancelled the BWR orders, whichwere to be replaced by Westinghouse PWRs (64). At the same time,industrial groups were restructured under guidance from the publicauthorities. As a result, the nuclear industry was organised aroundfour nearmonopoly groups: EDF itself, which is together the project manager andarchitectengineer for the construction of most nuclear plants, as wellas their sole operator; Framatome, the manufacturer of nuclear systems (reactorsand steam generators), previously owned by the CreusotLoire group,Westinghouse and the CEA, then by the CEA, CGE and Dumez (aconstruction company), and now mostly by a CEAEDF holding and CGE. The CEA, responsible for most civil and military nuclearR&D, for manufacturing nuclear warheads, for the whole civil fuel cyclethrough its subsidiary COGEMA (except minor parts, largely controlledby another publicly owned industrial firm, Pechiney), and for wastedisposal (through the ANDRA agency).R)$ Alsthom (part of the CGE group), which supplies theturbines and other electrical equipment (note that the CGE group, hasbeen called AlsthomAlcatel since 1 January 1991, but in this reportCGE is used). Many of the other firms and subcontractors involved in nuclearsupplies are subsidiaries, or joint ventures between these large groups(67). This is especially true in the fuel cycle, in which most stages ofthe fuel manufacturing process are organised in joint venturesdominated by the 'CEAIndustries' holding company which controls anumber of firms through COGEMA, from uranium exploration andextraction in Africa and Canada (most of the uranium extraction inFrance is directly controlled by COGEMA); uranium enrichment (Eurodif,partly owned by foreign clients); fuel reprocessing; and fuel fabrication(in which Pechiney and the CEA have several common subsidiaries). It isalso the case for subcontractors in plant construction (for instance,CGE controls not only Alsthom, but also suppliers and subcontractorssuch as Neyrpic, CEM, Rateau). In 1981, a total of forty seven PWRs of various sizes (900 MW or 1300MW) had been ordered, plus the Superphnix FBR, which were to add 53.7MWe to the nuclear generating capacity in France. This was the end ofthe accelerated ordering programme; orders were down to a trickleduring the 1980s, and no firm orders by EDF have been confirmed since1987. The next order, for a 1450 MWe PWR reactor at Civaux 1, has beenpostponed from 1988 to the end of 1991 (7). At the beginning of 1991, France had a net nuclear capacity of 56.3GWe, with another 6.8 GWe under construction (6). Most of the units are PWRs, as shown in Table 2. The main UNGG units are now near theend of their life, with two closed down before 1990, another one,Chinon A3, to be shut down in 1990 (68) despite considerableinvestment since 1986 to extend its lifetime (69), and two others(Saint Laurent A1 and Saint Laurent A2) due to be closed down in 1992and 1993 (59). The heavy water reactor has also been shut down, andthe first PWR, Chooz A1, built as a joint venture with Belgium, is to beclosed in 1991. TABLE 2 NUCLEAR ELECTRICITY GENERATING CAPACITY IN FRANCE (situation on 1-1-1990 MWe) _______________________________________________________ Type and series Number Gross Net of reactors capacity capacity In operation 4 2,085 2,015 FBR 2 1,492 1,433 PWR 49* 51,594* 49,415* (900 MWe CPO) (6) (5,624) (5,400) (900 MWe CP1) (18) (17,078) (16,320) (900 MWe CP2) (10) (9,342) (8,900) (1300 MWe P4/P'4) (14) (19,230) (18,490) TOTAL 55 55,171 52,863 _________________________________________________________ 2) In construction PWR 8 11,246 10,790 (P'4 com'ned 1990) (3) (4,107) (3,940) (P'4 com'ned 1991/93) (3) (4,107) (3,940) (1450 MWe N4 1993) (2) (3,032) (2,910) ___________________________________________________________ EXPECTED TOTAL 1-1-91** 57 58,778 56,323 EXPECTED TOTAL 1-1-94***59 64,567 61,873 ___________________________________________________________ Sources EDF, Rsultats Techniques d'Exploitation 1989, 1990, and others.W CEA, Les Centrales Nuclaires dans le Monde, ed. 1989.W Notes * including Chooz 1 (gross capacity: 320 MWe) ** HChinon A3 closed down in 1990 *** Chooz A1 closed down in 1991; Saint Laurent des Eaux A1 and A2rsreacto closed down in 1992 and 1993. Of the two FBRs, one is a small demonstration unit, and the other is therecent CreysMalville plant, Superphnix. This has suffered a number of commissioning problems, including a wellpublicised sodium coolantX:leak in the fuel handling unit. Out of service for 20 months, it wasprogrammed to be the forerunner of a 'small family' of commercialFBRs planned to be operating before the year 2000, and to be builtthrough a European consortium. The project has been postponed for atleast two decades, and the FBR programme can be seen as aconsiderable failure for the CEA which was its main proponent (35). A list of all the plants with their main characteristics is given in Appendix 1. The PWRs ordered since 1970 are generally classified intofive series (CP0, CP1, CP2, P4, P'4 and N4). The distinction betweenthese is based on ordering programmes and technical differences. Thefirst three categories are 900 MWe 3loop reactors, closely followingWestinghouse designs. The P4 and P'4 series are 1300 MWe 4loopreactors, with double containment building, whereas the most recent1450 MWe series, N4, is of a fully French design, equipped with the highefficiency Alsthom turbine 'Arabelle' (71), and new control systems. Not surprisingly, after oil, nuclear electricity is the main source ofenergy now consumed in France. In net domestic energy consumption,the share of nuclear electricity, which was only 1.8% in 1973, the yearof the oil crisis, rose to 6.9% in 1980, and 29.8% in 1988 (39). In termsof electricity production, the progression of the nuclear industry iseven more striking, since it rose from 3.7% in 1970 to 74.6% in 1989(6) (see Appendix 2). France has gone from an electricity supplysystem based nearly equally on oil, coal and hydroelectricity, to onewhich is overwhelmingly nuclearbased the nuclear domination wouldbe even more striking if there were no nonEDF producers (whichmostly rely on coal and hydroelectricity see Table 1). In 1990, nuclear electricity accounted for 79% of the national production (192),and this proportion will increase to over 80% in the middle of the1990s. France is fast moving towards a situation of total dependencyon nuclear technology. 2. Objectives of the French nuclear power programme The size of this investment programme, pursued at such a pace, has tobe justified by powerful and clear objectives. Three main ones can beidentified: a reduction of real electricity prices since nucleargenerating costs were expected to be lower than those of oil and coalgeneration; a reduction in vulnerability to adverse political and economic forces; and an opportunity for strategic industrialdevelopment. The reduction of real electricity prices was based on the belief thatnucleargenerated electricity would be cheaper than any other optionsexcept hydroelectricity. During the late 1960s, when even calculationsby the official experts committee PEON were still giving a generatingcost advantage to oilfired stations over nuclear ones, there werealready some worries about the prospects for fossil fuel pricestability. After the oil crisis of 1973, the cost reduction objectivebecame paramount, as officially calculated generating costs for oilrose up to 80% above nuclear (66). Another aspect of this objectivewas that electricity in general would substitute for coal and oil as apower source at lower overall cost; this was planned to be apply to intensive energy users such as railways, transport and heavyindustries, but also in other sectors such as the office and homeheating market. The 'tout lectrique, tout nuclaire' was a marketingstrategy as well as a supply strategy. The second objective, aimed at reducing the vulnerability to importedenergy sources, gave further impetus to the nuclear programme.Dependency on oil and gas imports had serious effects on the balance oftrade after 1973. The French authorities had also become acutely awareof the political vulnerability of the energy system after Algerianindependence in 1962 and the nationalisation of French oil interests in1971, and in the aftermath of the Yom Kippur war in 1973. Another aspect of the security of supply objective is related to theclose links between the civilian and military requirements of nuclearactivities in France (72). For instance, the construction of thePierrelatte uranium enrichment plant was imperative for thedevelopment of the nuclear deterrent, but, up to 1982, it was also themain source of enriched uranium for PWRs: at the very start of the PWRprogramme, France was dependent on the USA for PWR fuel, a situationpolitically unacceptable in the Gaullist ideology. The third objective, the strategic industrial development of the nuclearindustry, is more wideranging. It was anticipated that nuclear powerwould increase its share of world electricity generation, and France'sstrong commitment to it would put the country in a good position towin a large proportion of the market for nuclear power plants, nuclear]W)(fuel and waste management. Less directly, the programme was part of ageneral strategy to bring France to the forefront of the world economyin terms of skills, products and advanced technologies, within the sameindustrial policy framework which persuaded the government tosupport and develop largescale projects such as Ariane, Concorde orthe TGV. 3. Political and sociocultural factors It is difficult to imagine a western industrialised nation which is morepolitically and socially adapted to the development of a largescalecentralised industrial project than France. This is largely due to thecharacteristics of the political institutional framework, of themanagerial and political lites and the methods of decisionmakingwithin society. The French political system is highly centralised, and has been evenmore so since the start of the Fifth Republic in 1958. At least up tothe period of 'cohabitation' (from 1986 to 1988, during which asocialist President governed with a conservative Prime Minister),power has lain with the President and to a lesser extent with hisministers (often chosen from the technocratic lite rather than thepolitical class), and not with Parliament. This is illustrated by the factthat no Parliamentary debate on the PWR programme was held from thetime of its inception in 1969 until October 1981, some months afterPresident Mitterrand's election (since then the only debate on energypolicy, including nuclear issues, took place in December 1989, for amere three and a half hours)/$$~$$$$$/. Many of the major industrial groups (such as Renault, Thomson,Pechiney), the larger part of the financial system and most of theutilities are in the public sector. This is particularly marked in thenuclear industry where the key organisations are the state electricityutility, EDF, and the national nuclear R&D agency, the CEA. On thenuclear supply side, the main actors are: Framatome, the reactormanufacturer partowned by EDF and the CEA; and CGE, which suppliesthe turbines and electrical equipment through a string of subsidiaries,and which took control of 40% of Framatome in 1985. CGE wasnationalised in 1981, in the heyday of nuclear plant construction, andits privatisation in 1987 came after most of that programme had beenachieved._)) This political and economic centralism is reinforced by socioculturalfactors, particularly the litist educational system headed by GrandesEcoles from which a majority of senior politicians and governmentappointees are drawn. In the electricity supply system and the civiland military nuclear industry most of the senior management jobs havebeen, and are still, held by graduates from the top engineering schoolEcole Polytechnique (73), the socalled 'X'. As a business paper notedrecently, it is not surprising that little debate occurs on nuclear safetyissues, since decisions are taken by a narrow circle of people of thesame background, especially expupils of the Ecole Polytechnique: "JeanClaude Levy, the managing Director of Framatome, and Michael Hug, thepowerful Director of Equipment in EDF between 1971 and 1981, a periodduring which nuclear stations were mushrooming all over the place, are'X' graduates of the same year."(74). This common training and philosophy creates a convergence in thethinking of the key decision makers. It also helps to develop a networkof personal relationships which reinforces the efficiency of thetechnocratic process (but does not always prevent corporateconfrontations, as the history of the relations between the CEA and EDFshows very clearly (75)). The dirigisme that is put into practice in the development of majorinfrastructures and industries in France, is reinforced in the case ofnuclear power by a system of planning consent limited to a formaladministrative procedure which allows few legitimate avenues ofpublic dissent. Until the reforms instigated by President Mitterrandpublic enquiries were a charade lasting at most a week: they onlyallowed local inhabitants to see a sketchy outline of the planningdocuments and to write their opinion in a single register often kept in aremote village hall. President Mitterrand's reforms appear to have marginally improved the situation, but, since the bulk of the nuclearprogramme was underway by then, the impact has been negligible. There was, during the 1970s, an important antinuclear movement inFrance, with largescale regional branches able to organiseconsiderable popular protests (76). They resorted to direct action onseveral occasions. Such confrontational politics were perhaps notsurprising within such a rigid decisionmaking system. The only publicdemonstration which prevented a nuclear power unit from being builtb)*was that organised around Plogoff, in Brittany, where, interestinglyenough, one of the main themes of the protest was the inequity andundemocratic nature of the public enquiry system. This was successfulonly because of the promise by Mitterrand just before the 1981election to cancel the planning permission. Indeed, the antinuclear movement ultimately had little impact on thedevelopment of nuclear power, which was supported by a powerfulalliance between the state apparatus and the industrial lobby (includingthe largest union, the CGT). Of the major candidates in the 1981presidential election, only Franois Mitterrand stood for major changesin nuclear power policy, and his victory was soon followed by thesuccess of the Socialist Party in the National Assembly elections. Thisappeared to give him ample political power to carry through thepromised reforms. However, little has happened since, and even the ordering rate ofnuclear plants in the early 1980s stayed at a far higher level than couldhave been expected, given the obvious emergence of plant overcapacityand the promise by the socialists of a more cautious approach. Thereare three reasons for this. First, the institutional power of EDF,Framatome and the CEA was underestimated. Second, the socialistcommunist coalition, which came into power in 1981, was itselfdivided on the subject, the PCF and part of the Socialist Party being inthe pronuclear camp. Third, it was difficult for a new socialistcommunist government, elected on a jobs creation platform, to stopnuclear investments which would have led to unemployment as a shortterm consequence. On the institutional front, however, the 1980s was also been a periodduring which the traditional technocratic and dirigiste model had begunto crack. Within EDF, a new 'commercial model' is slowly making itsway, largely since the President from 1979 to 1987, Marcel Boiteux(previously Executive Director from 1967 to 1979), forced areconsideration of corporate strategy. The basis for this change wasthe recognition that the period of 'strategic investment' was nowcoming to an end and that cost effectiveness of investments was thenew goal. (77). This was reinforced by the need to penetrate newmarkets for electricity, as overcapacity was developing. The 1990s will undoubtedly see further changes in EDF's corporatee7) +strategy, including in its relationship with the state. The electricitypricing mechanism is based on the Contrats de Programme systemwhereas EDF and the government negotiate a set of objectives everyfour years on productivity, prices, investments and strategy. Thissystem has not operated satisfactorily and EDF is seeking far more'flexibility' from the government. Furthermore, because EDF needs newcapital for replacing ageing nuclear stations in ten years time, and forentering into joint ventures with foreign utilities in the Europeanmarket, it would prefer to modify its legal structure from a 'publicestablishment' (which is owned 100% by the state) to a 'public plc'(which can be partly held by private capital). The current governmentis opposed to this plan, fearing rampant privatisation in the longerterm (78). This situation is discussed further in Part V. PART II THE PROBLEM OF OVERCAPACITY One of the main problems that EDF has now to overcome is that ofnuclear overcapacity. The French utility itself recognises that this is adrain on the economics of the electricity supply system. This secondpart of the report explores the origins of this situation, and analysesits main consequences, including the efforts made by EDF to alleviateits impact through an electricity export drive. 1 An ordering programme gone awry It is not an overstatement to say that the excessive orderingprogramme established in France in the mid-1970s was largely theresult of the panic of the decisionmakers confronted with the oilcrisis. This situation was compounded by the gross overestimates ofelectricity demand forecasts made by EDF, the CEA and otherinstitutions, such as the official experts commission PEON. Thenuclear establishment, lobbying for total control of the electricitysystem, simply applied to the 1970s and 1980s the considerableelectricity demand growth rates of the 1950s and 1960s, when it wasconsidered that demand would be double within a decade. The most irresponsible forecasts of nuclear capacity requirementswere made by the CEA. For instance, in 1972, it was claiming that atotal nuclear capacity of 158 GWe would have to be operating in theyear 2000, including 37 GWe of FBRs (79). In 1978, when many werealready voicing concern about the possible scale of overcapacity, itwas still claiming that 106 MWe of nuclear capacity would be requiredin 2000, with 23 GWe of FBRs (80). Current forecasts of nuclearcapacity in the year 2000, though considerable, are not much over 65GWe, with 1.4 GWe of FBRs only (if Phnix and Superphnix are notclosed down beforehand). i)#.In 1972, EDF forecasted a domestic electricity consumption of 370 to430 TWh for 1985, and in 1976 it reduced it to between 385 and 415TWh. The actual 1985 figure turned out to be 303 TWh (42). EDFintended to reach this level of demand, not only through the usualimpact of economic growth on consumption, but also through a forcefulcampaign of substitution. The negative impact of the economic crisis and of the difficulties ofrunning an aggressive energy substitution policy was not recognised fora very long time. As late as 1980, the 'Giraud programme' was launched,which called for the construction of nine supplementary reactors to bestarted in the three following years, partly on the basis of high EDF andCEA demand forecasts. In 1980, EDF still claimed that domesticconsumption would reach 450 TWh in 1990 (it turned out to be 349TWh). After the Socialists came into power in 1981, the official Hugon Reportprepared estimates of a net domestic consumption of 415 TWh in 1990including 280 TWh of nuclear (81). It constituted a change insofar as itindicated that a slowdown of nuclear orders was necessary. Aparliamentary report then concluded in October 1981 that only threereactors, instead of nine as in the Giraud programme, were necessary(82). The socialistcommunist government did not immediately implementthis slowdown policy, despite the fact that it was part of theirprogramme. At first, it had been decided to cancel the site of Plogoff(83) and to freeze the construction of six units for some months. But,in October 1981, the government's Programme of Energy Independencechose to order six reactors in 1982-83 (84). At the same time, it wasdecided, in a 'dual track' policy, to develop and fund a more seriousenergy efficiency effort, through the newly created AFME. The reaction of the nuclear lobby at the time was highly negative, sincethe manufacturing capacity of nuclear reactors had reached sixreactors per year. However the report of the Energy Group for the XthPlan in 1983 showed the limits of the substitution policy and theimpact of the economic crisis on electricity consumption in themedium term (30). Despite the new factor represented by thedevelopment of electricity exports, it was becoming evident that amore radical slowdown of orders was necessary. In July 1983, thek)$/government decided that two reactors would be ordered in each of thetwo years 1983 and 1984, and one or two in 1985 (85). This decisionat first came as a shock for the industry, because it had alwaysclaimed that one order only a year would make Framatomeunsustainable. In subsequent years, the number of orders fell to one (see Table 3), andno new reactors have been ordered since 1987. Indeed, EDF itself wasnow attempting to limit overcapacity in several ways, at lastrecognising the considerable opportunity costs of the acceleratedinvestment policy. Some orders have simply been postponed, sometimesseveral times (in the case of the Civaux 1 unit, for instance, the orderhas been postponed in several stages from 1987 to the end of 1991 (7)).Also, as described in Section III.1, EDF slowed down the construction ofa number of units in order to delay their commissioning. TABLE 3 FIRM COMMITMENTS BY EDF (number of reactors and net rated capacity in GWe) __________________________________________________ Year Reactors Capacity Year Reactors Capacity 1970 1 900 1980 6 7,000 1971 1 900 1981 4 4,800 1972 2 1,800 1982 3 3,500 1973 1 900 1983 2 2,600 1974 6 5,400 1984 2 2,700 1975 6 5,400 1985 1 1,300 1976 6 5,800 1986 1 1,300 1977 5 4,900 1987 1 1,400 1978 3 3,100 1988 1979 5 5,800 1989 Source Bacher P, Chapron M, 'Nuclear Units under Construction', RGN International Edition, Vol. A, MayJune 1989, pp 207219. Estimates of nuclear overcapacity vary widely. They largely depend onn{the way in which the existing capacity is compared with what would berequired in an 'optimal' generating system, given expected demandlevels, annual load curves and generation mixes, tariff systems, and soon. In 1987, Mr Delaporte, EDF President, although refusing to speak ofovercapacity, acknowledged that, depending "on consumption growthestimates,... this overtaking amounts to around 5 units... We havetherefore gone past the economic optimum..." (10). Early in 1989 JeanZazk, EDF Export Director, agreed that "overcapacity can be estimatedat 7.5% of production" (86) or around five PWRs. Since three to five large PWRs are to be commissioned in 1990/91,there will be at least eight excess units in 1991. This overcapacitywill still be around five units at least in the mid1990s, assuming agrowth in demand of 2.5% per year and an increase of net electricityexports to 50 TWh. This estimated level has recently been confirmedby the official Rouvillois Report, according to which the success of thenuclear investment programme in France is marred by the "situation ofovercapacity of EDF" amounting to seven or eight units: "As early as1982, the foreseeable nuclear equipment overcapacity had beenestimated at two units. The current estimate is seven to eight units,or 10GWe. Nuclear power was 'marginal' on the grid for 2,000 hours in1986, it will be so for 4,000 hours in 1990" (4). Now, EDF is again projecting a major increase in industrial demand inits 'high hypothesis' and 'median hypothesis' scenarios, which couldbring total demand to 410TWh in 1995 against 395 TWh (including netexports) in 1989. But given the commissioning of a number of plantsbetween 1989 and 1992, overcapacity is likely to continue for a numberof years. Faced with this situation, EDF cannot hide behind the usual selfjustifications concerning the impossibility of exactly forecasting thefuture. Obviously, the economic crisis of the early 1980s, which wasparticularly severe in France, played a significant role in slowing downthe growth of electricity demand. More important in explaining thecurrent nuclear overcapacity is that EDF implemented an aggressivemarketing policy, in order to increase electricity consumption andcreate a demand for the power generated in the fastincreasing nuclearp)&1plants. This policy was indeed quite a success, but not of the requiredscale. This was especially the case in the industrial sector. An electricitydemand growth of 5% per year was planned, but it only reached 1.4%between 1979 and 1988 (39), and 1.2% in 1989 (6). In the residentialsector, demand grew because of the success of electricity penetrationin the domestic heating market: at the end of the 1970s, the aim hadbeen for EDF to increase the number of electricallyheated homes by160,000 per year. At first, this target was not achieved because it rancounter to the governmental energy efficiency policy which penalisedelectrical space heating (7). However, it was soon overtaken with anannual average increase of 368,800 electricallyheated homes between1983 and 1988, divided equally between conversions and newlybuilthousing (31). However, this increase largely consists of smalldwellings, and the annual growth of electricity demand in the domesticand service sectors between 1979 and 1988 was just 5%; after 1985,this decreased, and was around 3% in 1989 (6). This was not sufficient to bring electricity demand to the expectedlevels: partly, EDF has underestimated the investment constraints of asubstitution policy, and, partly, it had waited too long to adapt itstariff strategy. It also ignored the warning signals of overcapacity, as did successivegovernments, largely because of the industrial constraint: it wasindeed very difficult to slow down the programme in a brutal way (asthe socialists discovered in 1981). The main problem was to leave abreathing space for the nuclear manufacturing industry, which wassupported by a considerable lobby. Indeed, in 1983, there was constantreference to the 'industrial constraint', as opposed to the 'demandconstraint', with a number of the stations ordered in the mid-1980sjustified on the grounds that early ordering (ahead of capacityrequirements) was necessary to ensure a smooth work schedule fornuclear manufacturing firms such as Framatome (30). Not only did the irresponsible ordering policy and the resulting nuclear overcapacity increase nuclear generating costs (as described in PartIV) but it has also contributed to the current industrial crisis in thenuclear manufacturing sector. In the future, and despite the fact thatEDF recently confirmed that it might order up to eight more 1400 MWes)'2PWRs before the end of the century (Civaux 1 in 1991, and perhapsseven units between 1996 and 2000) (8), French manufacturers will nothave the same size of order book as during the late 1970s and early1980s, even if a few export orders are obtained. The only strategy open to those industries therefore is to diversifyaway from nuclear activities, and to enter into partnership or jointventure agreements with foreign firms in the nuclear field. This point,developed further in Part V, seems to indicate that the vision of anindependent French nuclear industry dominating the world and Europeanmarkets is now well out of date. Another aspect of the link between current overcapacity and EDFmarketing strategy is the risk that the utility will be unable to providesecurity of supply at some peak demand periods. The growth ofseasonal demand markets such as space heating has been such that thepower required at annual peak (SMD) is now more than double thesummer lowest demand respectively around 60 and 30 GWe. The weaknesses of coal and gasfired generation with respect topeaking were demonstrated during the 198990 winter when a numberof nuclear units were operating at low availability. Not only did EDFhave to import power from neighbouring utilities to maintain securityof supply, but, ironically enough, it even had to buy expensive Germancoal because it had underestimated the consumption. At the same time, the SO2 emissions of the French electricityu[generating system, although dramatically lower than in the early1980s, still reach levels of the same order of magnitude as those ofthe West German public electricity system. This is despite the factthat, in France, fossil fuels account for only around 10% of generationagainst 50% in West Germany. This is the result of different policyapproaches. Whereas the German utilities were forced to installsophisticated desulphurisation equipment, EDF mostly counted on thesubstitution of coalfired plants by nuclear ones. The considerableincrease in peak load (about 50% since 1980) mainly due to thesubstantial increase in electrical space heating, made it necessary tokeep a significant fossil fuel generating capacity. It should beemphasised that around a quarter of all housing (and 23% of allcentrallyheated homes in 1988 (39)) is electrically heated, with manyothers using complementary electrical heating in cold spells. As thisv<)(3use is highly seasonal, it is not, for the most part, satisfied mostly bynuclear power. According to EDF, the distribution of electricitysources for unrestricted domestic space heating is about 59% coal, 6%oil and only 35% nuclear (87). Even in nuclear France, electricity is oneof the most airpolluting heating systems. There is an increasing risk of disruption of supply during winter peakperiods because of the growing sensitivity of demand to winterweather conditions and social phenomena. As a commentator explainedrecently: "EDF estimates that in winter, each degree Centigrade drop intemperature increases electricity demand by 1,000 MW. In 10 yearstime, this sensitivity might have increased to 2,000 MW/C. In other words, a winter such as that of 1986/87 might on certain days leaveEDF looking for 20 GW of additional plant over its forecast maximum,at a time when other utilities in Europe are likely to be seriouslystretched by similar weather conditions" (12). To this can be addedthat another feature of the EDF system is its dependency on weatherconditions for hydroelectricity, as the events of 1989 showed. There is, therefore, a clear need to diversify sources of supply in orderto ensure security of supply. In fact, EDF itself is analysing thepossibility of converting closed down nuclear units, such as St LaurentdesEaux, Chinon or Bugey into gasfired power plants. According toEDF's President Pierre Delaporte, the aim is "to reuse the electricalpart of the old plants, which does not wear out as fast as the nuclearisland, and put a new power source in it, in particular high performancecombined cycle gas turbines." (13) So far, EDF has shown no sign ofpushing or helping the development of other means of peak electricitygeneration such as CHP or the encouragement of independent smallscale and mediumscale power producers. But the utility is likely tochange its policy under government pressure. Indeed, after an officialreport recommended a more flexible policy from EDF, the utility made a'Uturn' and promised to incorporate in its forthcoming equipment plans"any independent power production project" (195). In conclusion, it can be said that not only is EDF finding itself in aposition of costly nuclear overcapacity, but it is also lumbered with afragile supply system which could easily be underpowered at crucialperiods of the year. The growing electricity exchanges between EDFand other European utilities have been seen as a way out of these difficulties. 2. Growth of electricity exports: the solution? It is often assumed that EDF's overcapacity problem is not a majorissue, since it has developed an electricity export policy which not onlymakes use of the additional power but also brings foreign currency tothe hardpressed French balance of payments. However, it is not by anymeans a longterm solution, and EDF itself is quite reluctant to put toomuch emphasis on this line of business. National grids in continental Europe have been interconnected for quitea long time, but, in the early 1980s, exchanges of electricity started tobe seen as a way out of the overcapacity problem and of reducing theimpact of load following. Although energy markets were largely ignoredin the discussions on the Single European Act in 1984, new conceptswere soon developed in the EEC for an Internal Energy Market (88). Theultimate goal for electricity is of a 'common carrier', a highvoltageEuropean Supergrid, which would allow for a deregulated 'spot market',breaking up the existing national supply monopolies and creating acompetitive environment for the supply and distribution of electricity(89). The export policy implemented by EDF in the early 1980s and supportedsince then by the government (90) is indeed giving impressive results.Whereas EDF was mostly a net importer of electricity up to 1980, thenet amount exported grew steadily thereafter, reaching some 12% ofproduction in 1990 (see Table 4), the equivalent of the annualproduction of nine PWRs of 900 MWe. The largest importers were Italyand Switzerland, until the interconnection with the UK through the 2GW Channel link; since then, the UK has become the second largestimporter (13 TWh net in 1989). These three countries received 88% ofEDF's 42 TWh net physical exports in 1989 (91). These exports constitute a boost to the French trade balance, which hasbeen in deficit since 1987. In 1988, electricity exports brought FF 7.2billion, around 8% of the value of energy imports and 0.6% of all exports(92). TABLE 4 IMPORTS AND EXPORTS OF ELECTRICITY BY EDF ______________________________________________ Year Imports Exports Net In % of Net TWh Twh Exports Nat. Prod. ______________________________________________ 1977 12.1 7.3 4.8 2.4 1978 15.8 11.5 4.3 2.0 1979 16.4 10.8 5.7 2.4 1980 15.6 12.5 3.1 1.3 1981 10.9 15.7 +4.8 +1.8 1982 9.5 13.3 +3.8 +1.4 1983 7.3 20.7 +13.4 +4.7 1984 5.4 30.2 +24.8 +8.0 1985 5.5 28.9 +23.4 +7.1 1986 7.9 33.3 +25.5 +7.4 1987 8.5 38.2 +29.8 +8.2 1988 7.4 44.0 +36.7 +9.9 1989 9.3 51.3 +42.0 +11.0 1990 +46.5 +12.0 __________________________________________ Sources: DIGEC and EDF. The last column gives the percentage of net exports in the netnational production (EDF and nonEDF), before transmission losses andpumped storage consumption. It is likely that the net exports of electricity will continue to growduring the next few years, (up to 100 TWh at the turn of the century(194)), but not as fast as during the 1980s. EDF is working hard to negotiate new longterm supply contracts with foreign utilities, as}bshown below: these are potentially the most effective way ofimproving the costeffectiveness of underused base load, capitalintensive nuclear generating plants. The current structure ofexchanges is quite complex, with strategic constraints limiting thescope for expansion, and making it difficult to move towards a pure'common carrier' system. Four types of electricity exchange with foreign utilities can bedistinguished. First, security of supply agreements require utilities tosend power out to another system in order to avoid outages. This isonly a small proportion of exchanges, but represents an importantstrategic element in the supply policies of European utilities. ~"/+6 A second type of exchange results from shares held by foreign utilitiesin power stations, including nuclear plants built as joint ventures. Forinstance, EBESIntercom and UNERG from Belgium can claim 50% of theelectricity sent from Chooz A, 12.5% of the four units at Tricastin, and25% of the Chooz B1 and B2 units (under construction). In total, fifteenFrench PWR units are in this situation, as well as the Superphnix FBR.EDF itself holds shares in the Vandellos 1 UNGG in Spain (recentlyclosed down for safety reasons after a fire) and the Tihange PWR inBelgium (66). These exchanges amounted to net exports of 5 TWh in1989 (91). Other exchanges are organised through long and mediumterm supply contracts. The contractual agreements can be either for firm base loadpower (for instance, with Italy's ENEL), on an annual or multiannualbasis, or for seasonal power sales (for instance with Switzerland). EDFalready has important contracts with countries such as the UK, Spain,Italy and Switzerland. Current negotiations with other countries are expected to bring newlongterm sales arrangements. An agreement was signed with Portugalrecently, and another has been made in 1989 with Belgium and Germanyto channel power from France to the Netherlands (86). A new contractwas signed late in 1990 with Spain for a ten year regular supplystarting in 1993 (93). The largest potential market for EDF is Germany, where electricityprices are far higher than in France. For a long time, the larger Germanelectricity generating companies (especially RWE), and the coalutilities, have resisted firm supply contracts, as these could weakenthe prices and supply agreements between coal and electricityutilities. The only significant contract was with EVS in 1984. However,EDF has recently started negotiating with several large utilities,including VEBA, for sending power to Berlin, East Germany and theHamburg region from 1992 (94). Recently German reunification hascreated new opportunities for EDF to enter the exEast German market,as described in Part V. With regard to the UK, EDF is seeking to negotiate direct supplycontracts with large industrial users and Area Boards followingprivatisation, but the situation is still fluid. The possibility of another),7cable link under the Channel is being considered, as well as EDFentering joint ventures in generating plants in England. Finally, the 'spot market' (changes bien plaire) is also becoming animportant feature of European electricity exchanges. Utilities withexcess of capacity and low marginal generating costs, propose sales ona half hour basis to systems operating stations with higher marginalcosts at that particular time. The international management of offersand demands is organised through the central Laufenburg coordinatingcentre in Switzerland run by the UCPTE (95). If the price proposed bythe supplier is lower than that which the potential client is ready topay (its own marginal cost), a spot sale can be negotiated. This kind ofexchange has become important for France since 1984, when itincreased to 23% of EDF exports, against 5% in 1983 (67). The financial advantages of the spot market sales for both the clientand the supplier are evident. Since load curves do not coincide from onesystem to the next, such sales allow the supplier to make better use ofits capitalintensive capacity in periods out of peak load, and theclient to avoid using plants such as old coalfired stations with highmarginal costs. It is sometimes assumed that pricing agreements for fixed supplycontracts or spot pricing mechanisms allow EDF to 'dump' electricity onother European markets at an unjustifiably low price. Responding tothis claim is made quite difficult because of the 'commercialconfidentiality' of pricing clauses in such export practices. However,the few available figures on marginal costs and export prices indicatequite clearly that the criticism is not justified. The average electricity export price estimates which have beenpublished (covering all types of export, from fixed supply to spotmarket) seem to indicate that they are somewhat slightly belowaverage base load generating costs. For instance, the Rouvillois Reportclaims that average export prices by EDF in 1989 stood at 22.4centimes/kWh as opposed to an average generating cost of 22.5centimes/kWh (4). Another source quotes an average export price of 19centimes/kWh. This is obviously far higher that shortterm marginal generating costs. In 1989, these were estimated to be between 13 and 14 centimes/kWhb)-8for electricity generated from imported coal, 21 to 22 centimes/kWhfor (highly marginal) electricity from imported oil, 7 centimes/kWh for(mostly base load) nucleargenerated electricity, and even lower forhydroelectricity (94). Pierre Delaporte is right, therefore, in claiming that EDF is not dumpingelectricity (10) on export markets. However, it can be argued that theFrench consumer crosssubsidises these exports. Longterm andmediumterm fixed supply contracts (which constitute the bulk ofFrench electricity exports and will continue to do so during the nextdecade) should fix prices at a level which covers not only shorttermbase load operational costs (such as fuel and direct labour) but alsolonger term costs of capital, T&D, R&D, administration and so on. Ifcapital costs seem to be covered, the same cannot be said of othercosts: in this respect, therefore, the argument is justified, sinceexport prices cover only generating costs, but better data would help toreach a firmer conclusion. It is also difficult to know what level exchanges of electricity willreach by the end of the decade. Interestingly enough, the officialprojections in France in 1987 assumed that, at the end of the century,net exports should be between 41 and 50 TWh a year, a small increaseon the 1989 level (31). But in 1990 EDF export projections increasedconsiderably firm supply contracts for 70 TWh a year have alreadybeen signed for the period 1997 to 2002, before falling back to 45 TWha year around 2005. "Exports could easily rise by 50% to 100TWh by2000", according to one commentator (96). More recently EDF agreedthat export sales should increase "within reasonable limits, themaximum being less than 100 TWh, some 18 to 20% of production, bythe end of the century" (194). However, France cannot be expected tobecome the "nuclear power house" of Europe, for technical and strategicreasons. A first hurdle for electricity exports is the need to reinforceinterconnections throughout the Eurogrid; environmental limits tosuch development are already evident for instance, in 1989, theFrench Environment Minister rejected the construction of a third 400KW line towards Spain, which is necessary for exports to Portugal (97),before grudgingly accepting it a year later (98). More of a problem is that the idea of a common carrier and deregulated spot market arestrongly resisted by many utilities in the EEC, including EDF, which are).9not ready to relinquish control on their own grid or abandon theirstatutory duties. Mr Delaporte declared in 1988 that electricity is not "a good like anyother" and the electricity suppliers have "a responsibility of continuity,security and quality of supply. It seems difficult and even very risky todispossess the local supplier" of such a responsibility (86). Indeed,utilities are not primarily interested in developing the spot market;they would rather negotiate additional fixed power exchange, multiannual contracts (which could include conditional clauses concerningexchanges at peak demand period in order to preserve security ofsupply). EDF has just signed such an agreement with Spain (96) afterlong negotiations (99). Besides these corporate reactions, there is a technical problem to betackled. A totally transparent EECwide or Europewide market forelectricity can only develop if security of supply can be guaranteed atall times over the whole grid. As noted before, EDF is not certain thatit can offer such a guarantee. Indeed, in December 1989, EDF became anet importer of electricity (around 2.5 TWh net for that month) mostlyfrom Spain and Germany (77), because of the lack of availability of anumber of 1300 MWe PWRs and the low capability of the hydroelectricsystem. The longterm alternative would be for a transnational independentboard to take full responsibility for transmission as well as forsecurity of supply, buying from generating utilities at the lowest pricefor a given level of load, with every utility being able to sell power toconsumers all across Europe. Such a free market perspective, however,would bring new costs the experience of the United States shows thatthe 'common carrier', 'free market' alternative would require theimplementation of heavy regulatory processes, themselves very costly(100). Confronted with widespread opposition, the Commission recently toshelved a project on a 'common carrier' Directive (101), and publishedinstead a narrower 'transit' Directive (102) which in fact makesofficial the type of agreements recently negotiated between Spain,France and Portugal. Total integration of electricity systems in aderegulated Europe is a longterm project. For the next few years atleast, electricity exports can only alleviate in part the opportunity)/:costs of nuclear overcapacity. ______________________________________ PART III THE FRENCH PROGRAMME IN OPERATION: PERFORMANCES AND PROBLEMS _______________________________________ Because nuclear plants are highly capitalintensive their costeffectiveness is even more dependent on their operating performancethan, say, coalfired plants: the capital expenditure has to be spreadover as much production as possible to reduce the cost of each of thekWh being generated over the lifetime of the unit. Similarly,construction times have to be as short as possible to reduce the timeduring which capital is being tied up at high financial cost. For a long time, EDF took pride in having some of the shortestconstruction times in the world for nuclear stations, and at achievinggood operating performances on commissioned reactors. According tothe utility, this was largely the result of the high degree of integrationof manufacturing and construction engineering, and of the socalled'series effect': the construction of a large number of identical orcloselyrelated units was assumed to bring significant cost benefitsthrough economies of scale and gains in engineering experience. However, EDF's performance has somehow degraded during the last fewyears. This is a significant factor in the crisis in which the utility isnow finding itself. 1. Construction times During the late 1970s and most of the 1980s, EDF, designer andcontractor of nuclear plants, was seen as an engineering champion.Construction times, from first concrete to grid connection, fell from75 months per nuclear unit in 1977 for the CP0 series to 60 months forthe CP1 and CP2 reactors completed around 1985 (103), except forChinon B3 and B4. This was the result of careful planning, a policy ofstandardisation of components at all levels, standardisation of station)1peak of 83% in 1986). Similarly, high capability factors have beenachieved for the cold season (December to February inclusive)constantly above 91% between 1983/84 and 1987/88, reaching 97.2%during the 1986/87 winter (103). Furthermore, it appeared during most of the 1980s that the 900 MWeunits were improving their capability factor from one station to thenext, and from one series to the next. For instance, the cumulativecapability factor of the CPO series was around 75% up to May 1989,whereas all but two of the CP1 units had achieved between 82% and86% (103). However the situation is now not as good as it was two or three yearsago. From 1987 onwards, technical problems have affected a number ofnuclear units. Although they do not yet significantly affect theperformance of the nuclear capacity as a whole, they neverthelessindicate new trends. In particular, the 1300 MWe units have not yet to reached capabilityfactors similar to the 900 MWe units, despite being designed for anannual capability factor of 74% and a winter capability of 94%. This islargely caused by the increase in of outages due to generic faults andother incidents. The EDF management is prompt to emphasise that a large proportion of1300 MWe units are still in their three year postcommissioningperiod. This is only partly true. For instance, the annual capabilityfactor which was around 65% in 1986, rose to 72.9% in 1987, but fellto 69.7% in 1988 and 62.4% in 1989, a year during which a number ofmature 1300 MWe units were operating (105). Because of the costly andlengthy repair programme on these units, they are not expected tooperate at 'normal' capability for another two years. Indeed, in January1990, the availability of the 1300 MWe units fell to 58.1% (106). Generic faults have also appeared on the 900 MWe units, forcing EDF toundertake a costly programme of maintenance and replacement ofsteam generators (see next section). In terms of capability statistics,the effect has been limited up to now, although the winter capabilityfactor of the 900 MWe reactors fell to 76.1 % in 1988/89. The extentand potential consequences of generic faults now appearing augur badlyfor the future operating performance of a nuclear capacity which isb)4?ageing. A description of the technical problems now faced by EDF willindicate the seriousness of the situation. 3. Technical problems in French reactors Technical incidents in nuclear plants and small accidental radioactivereleases have occurred in France since the start of the nuclearprogramme, but the situation has degraded recently. Incidents havemultiplied and, in 1989, a large number of PWRs were out of service formonths, following the detection of generic faults. These problems areobviously and primarily safety issues, but they also have an impact onthe performance and economics of nuclear plants. This section onlycomments on technical problems from the economic angle, and a numberof incidents are not covered (including some dramatic ones such as thesodium coolant leak in the CreysMalville Superphnix FBR). EDF takes great pride in the reduction of the number of 'significant'incidents in PWRs since the early 1980s: indeed, it fell from 9.2 perreactoryear in 1985 to 8.3 in 1989 for 900 MWe units, and from 12.7in 1986 to 5.7 in 1989 for 1300 MWe units (103). ('Significant'incidents are events which have been defined as such by safetyauthorities since 1983, such as: uncontrolled radioactivity releasesand/or exposure; incidents showing defects in technical standards;potentially hazardous unplanned startup of safety systems and so on(16)). The worrying factor for EDF is the development of faults and incidentsaffecting a whole series of PWRs, which can therefore have dramaticconsequences on future performance and safety. The EDF chief safetyofficer, Mr Tanguy, underlined the seriousness of the situation in hisinternal EDF Safety Review for 1989 (5). This confidential document,leaked to the French Green MEP Didier Anger, was widely reported inFrance (3). Interestingly enough, several of the basic issues identified had already been singled out in a report prepared for Greenpeace someyears before (24). Indeed, none of the problems is new, but the 1990Tanguy Report represents a watershed for the utility. Just published at the time of completing this report, the new 1991Tanguy Report for the year 1990 shows that the situation has notimproved significantly. Although less critical of EDF than the 1990report for 1989, it nevertheless indicates that there were 95)5@potentially dangerous 'events' reported in 1990 from nuclear plants,compared with 83 in 1989 (193). Three main types of problem can be distinguished. The first is linkedwith various generic defects in the heat exchangers and pressurisers,resulting in corrosion of tubes or weldings. The second concerns ageingfaults, such as in fuel rods and control rods. A third is concerned withhuman errors in operation and maintenance procedures, which wereidentified by Tanguy as a major issue. Metal corrosion in heat exchangers and pressurisers affects many PWRsthroughout the world, including in the USA; leaking tubes in steamgenerators are a frequent occurrence, and there have been several tuberuptures (these are considered to be potentially one of the most likelytriggers for a largescale nuclear accident). It has recently beenestimated that 159 PWRs have been reported as having steam generatordamage, and ten of them had already undergone a full replacement oftheir steam generators early in 1990 (107). EDF has put considerableeffort into R&D and maintenance programmes in the past, but theproblem has been getting worse. In the late 1970s and early 1980s, corrosion appeared on the tubes inthe steam generators of the 900 MWe units (owing to the chemicalreaction of steel on water at operating temperatures). Theconsequences of this are twofold: hard metal oxide mud and sludgeaccumulates on the tube plates, up to hundreds of kilograms in a singlegenerator. As the tube walls become thinner, leaks occur between theprimary and the secondary circuits. Since the secondary circuit is at alower pressure than the primary (80 bars against 150), radioactivereleases may be necessary to prevent a degradation of the steamgenerator. In the worst cases (when a large number of tube ruptures occursimultaneously), this can trigger a partial depressurisation of the core,which, according to an official ISTN study quoted in the press (108), leads to "the dryingup of the fuel rods, provoking the rupture of thesheathing of the rods and the release of volatile fission products intothe environment." This scenario is the most frequent large releaseaccident considered in Probabilistic Safety Assessments (PSAs), and,according to an EDF official, "the probability of such a rupture cannotbe dismissed out of hand" (109). )6A The 1990 Tanguy Safety Review for the 'hot year 1989' emphasised thehigh probability of this kind of incident: "Today it is unquestionablythe risk of a brutal rupture of one or several steam generator tubeswhich is the most worrying one, taking into account the condition ofthe steam generators in a great number of reactors." The risk of suchan incident happening "over the next few years" is not negligible. Therefore Tanguy considers it "very important that the operators arewell prepared to face such an accident"(5). In the early 1980s, EDF tackled this problem in several ways, includingchanging the type of steel used in the tubes, shot penning, and alteringthe chemical composition of the water in the reactor and secondarycircuit to increase its pH (110). However, none of these techniques resolve the problem and, morerecently, it appeared that in a number of 900 MWe units, the steamgenerators had a significant proportion of their tubes blocked andshowing cracks. For instance, in 1986, leaks developed at Bugey 5 andFessenheim 2, and considerable reduction of the tube wall thicknesswas discovered at Tricastin 3. The continuous control, maintenance and repair programme necessaryto fit plugs to leaking tubes is extremely expensive; also, a number ofsteam generators are close to the 15% safety limit on the percentageof plugged tubes. EDF is therefore now having to replace the steamgenerators in the 24 oldest PWRs fully. The first replacement occurredin 1990 at the Dampierre 1 unit, where several hundreds of tubes (12%of the total) were blocked; the cost of the operation was FF 600millions. Additional installations are expected to cost FF 350 millions(111). EDF has not confirmed that all steam generators are to berenewed, but has just declared that it "has organised a forwardprogramme of short, medium and longterm replacement of steamgenerators." (112) Corrosion problems have also been discovered on the more modern,seemingly technologically safe, 1300 MWe PWRs. In the spring of 1989,during maintenance controls, it was discovered that tube walls werebecoming worryingly thin in the steam generators of 9 of these brandnew units, especially at Nogent 1 (close to Paris) and Cattenom 2 (113). B)7BThey were taken out of service until January 1990, and all of the 14large PWRs of this series had to be inspected and maintained, hencethere were a large number of outages and a very low capability factorfor 1300 MWe reactors in 1989. As a result, the commissioning of theCattenom 3 unit had to be postponed by several months for preventivemaintenance. The total cost of the exercise (plugging of leaking tubesand washing away of sludge) is estimated to be around FF 4 billion inthree years (108). The situation was deemed to be dramatic and unexpected enough for theCSISN (the government's expert advisory body on nuclear safety andinformation), which is known for its caution, to issue a warningexpressing its own worries and recommending further action. It notedthat corrosion and cracks in steam generators "could lead to a leak ofradioactive fluid outside the containment area", and that "exceptionalvigilance" should be exercised in three domains: "elimination of foreignbodies able to move in the tubes and creating abnormal wear,suitability of the control and maintenance programme whatever thecosts, planning and programming of heavy operations, especially thereplacement of the generators themselves" (114). The programme of replacement will entail considerable postoperational capital costs. For the 900 MWe series, the direct costs havebeen evaluated at more than FF 8.5 billion (91), nearly the capital costof a 1300 MWe nuclear unit, spread over 15 years. This includes R&Dcosts but excludes power replacement costs and increases ingenerating costs due to lower availability. If the replacementprogramme were to cover 1300 MWe units, say ten of them, the totaldirect costs could rise to FF 12.5 billion over 20 years. According tosome estimates, this could increase the price of electricity by 1%towards the end of the century (108). This brings fresh doubts aboutthe current EDF estimates of the projected repair and maintenancecosts (see Part IV). Other generic problems appeared in 1300 MWe units in 1989. Waterseepage was discovered around the pressurisers' instrumentationnozzles during high pressure testing at Cattenom 2 and Nogent 1 inautumn 1990, due to 'stress corrosion' of Inconel 600 steel afterwelding (115). This resulted in unplanned maintenance outages inseveral 1300 MWe units, and will require further repair work. )8CAnother type of generic fault which affected 900 MWe stationsconcerns the control rods and the fuel rods. There have been a numberof breaches of fuel rod sheathings, for instance at Bugey 2 in 1981 and1987. Stress corrosion cracks and breaking of brace pins of the guidetubes of control rods occurred in a number of instances, for example atBugey 2 in 1982, and EDF undertook a lengthy programme ofreplacement by 'second generation pins' (96). The problem reappearedin March 1987 at Tricastin 4, and then in 1988 parts of cracked pinswere found to have caused serious damage to the channel head of asteam generator at a Gravelines unit. Since 1988, EDF and the SCPRI (the radioactivity protection regulatoryagency) have been classifying incidents and accidents at nuclear plantson a 6 level scale (117), the highest being the most serious accidents(Chernobyl is in Class 6, and Three Mile Island in Class 4). For our purposes, the relevant incidents are those classified in Classes2 and 3. Class 2 covers serious technical faults which do not releaseradioactive material but which bring either a lengthy outage anddifficult repair programme (such as the sodium leak at Superphnix in1987, or the steam generators tube corrosion in 1300 MWe units), orare causing a significant reevaluation of safety procedures. Incidents in Class 3 are far more serious. They either lead to 'low'radioactive releases into the atmosphere (some tenths of the annualmaximum authorised limit), or release significant radioactivity withinthe containment building, or cause irradiation of individual workersover the permissible annual dose limit, or are considered to be asignificant breach of safety (such as breakdowns of containment orsafety systems) even without external radioactive leaks. Since the 1960s, there have been six such incidents, the last two atSaint Laurent A2 in 1987 and at Gravelines 1 on 16 August 1989. Thelatter illustrates the serious flaws in safety control and maintenanceprocedures. During routine maintenance, it was discovered that threesafety valves on the primary circuit had not been working for some 14months, because incorrect replacement screws had been inserted duringa previous repair, which had not been properly checked over (118). A well known cause of generic defect is that hundreds of kilometres of electrical cabling with substandard and fastageing isolation have)9Dbeen installed in the safety and command systems in a number of 900MWe plants. This was discovered as early as October 1980 at Tricastinand Dampierre, but all cable for the CP1 and CP2 PWRs at the timeoriginated from the same firm, Cablerie Crosne (119). A largescale replacement programme was undertaken, but only on themain safety systems, and not on all units. It is not surprising,therefore, that further incidents have occurred since, due to insulationdefects. For instance, at Bugey 5 in April 1984, the plant lost allpower for several minutes and only the second diesel generatorfunctioned. The control room was unable to check the fast rising corepressure for two hours. This incident has been recognised as the mostserious in the history of nuclear power in France (120): safety valveshad to be operated 30 times in one night, including 20 times in 15minutes (121). There were similar problems at Dampierre 3 in October1984 and November 1986; insulation defects also appeared in theimportant incident at Le Blayais in 1985. Other design faults can be highlighted, which show the lack of concernfor natural weather conditions. This was the case at the Saint LaurentA1 plant in January 1987, when ice blocked the river water intake ofthe cooling system for several hours. This also happened at Bugey inJanuary 1985, and EDF had to call on the army to clear the ice (122) More recently, at Paluel in January 1990, a chimney collapsed on theconventional part of the plant because of high winds during a storm. In the second half of 1990, other generic defects were discovered. Emergency cooling circuit filters were discovered to have 2.5cmdiameter holes in 1300 MWe Paluel and Golfech units according to theSCSIN, this created "a real risk of the primary circuit becoming blockedby particles in the water" (123). Just before, sand filters installed onseveral PWRs were discovered to be fitted incorrectly (124). Theseincidents led the Minister for Industry, Mr Fauroux, to attack EDF forits lack of concern for these problems and he asked for a special reportto be prepared on maintenance (125). This situation can be linked to the problem in France of the degradationof the 'human factor' in safety issues. The 1990 Tanguy Safety Reviewnoted: "The quality of people, their individual and collective behaviour,their working practices, and more generally their 'culture', do not seemto be globally adapted to the stakes, and this is the case at all levels of"):Eresponsibility, especially in the higher levels of hierarchy andmanagement" (5). The report added that many of the incidents in 1989 "could have beenaverted if ... those concerned had stopped and taken time to think" (5). This last sentence has been widely reported (126). In an article, MrTanguy himself insisted that "the incidents which occurred in 1989demonstrate that if we wish to guarantee that no severe accident willever occur, we have to do better, in equipment reliability and in thebehaviour of all our staff members." (127). There are clear indications that EDF operators are themselves worriedabout the routine errors, the increasing occurrence of 'small' incidentssuch as shortcircuits, blocked valves, confusion of switches oncontrol room consoles, pipe ruptures going undetected, fuel elementslost, and so on. Another recent, typical incident is the discovery inJune 1989 at Flamanville 2 that the wrong steam generator tube hadbeen plugged when corrosioninduced leaks were repaired in 1988(128). In an article in Le Monde, published after the repeated incidents duringthe summer of 1989, and in which a number of nuclear plant operatorswere interviewed, it was noted that the growing number of incidentshave one prime cause: "the routine and the management. At the start,nuclear power was an adventure, a 'challenge'..., stressful butrewarding. Ten years later, it is nothing but routine. Vigilance is athing of the past, the risk has slowly become trivial, and technologyhas given way to cost management" (23). According to the CFDT, "theorigin of these incidents is not only in technical defects, but humanerrors which in four years have multiplied by five, per unit of power"(23). EDF is becoming more aware of these problems, launching a'human factor mission' in 1989, but it is stuck between the need forhigher safety requirements and costreduction corporate objectives. It is not surprising under these circumstances that some worries areexpressed in the UK, with so many incidents in France due to technicalfailures, human error and maintenance shortcomings, together with thehighly unsatisfactory emergency and warning system operated byFrench authorities and utilities (129). After all, fourteen nuclearreactors plus the reprocessing plant at La Hague face the English coast.);FIn conclusion, the current technical difficulties in EDF nuclear plantsare no longer limited to the teething problems associated with anengineering programme in development. The generic faults whichaffect the nuclear units are a reality with which the French nuclearprogramme will have to live for years to come. The standardisation ofequipment in the series ordering programme, which epitomises theFrench system and helped so much to contain capital costs, nowappears to have its own costs and risks, since any technical failure can be found on any unit of a similar series. At the same time, the French programme is maturing, with a number ofunits showing premature ageing problems (for instance corrosion).Alleviating the safety and performance impact of this process willrequire supplementary effort and costs in maintenance, repairs andpostoperational capital expenditure. The replacement of steamgenerators, although a lifeline for nuclear manufacturers such asFramatome suffering from a lack of orders for new stations, is a clearindication of these trends. Another aspect of the maturation process is the growing number ofnuclear units which will have to go through their 'decennial review'during the early 1990s. This indepth repair and maintenance outagehas been made compulsory by the regulatory process, and takes the unitout of operation for a three to five month period. This will lower theavailability factor. 4. Unreliability of EDF service to consumers It is worth noting here another reliability problem which is onlyindirectly linked with nuclear power itself. During the period of heavyinvestment in nuclear capacity, EDF did not make particular efforts toinvest in transmission and distribution systems. Not enough attentionwas paid to the changes during the late 1970s and the 1980s in thegeographical structure of the electricity system (especially therelocation of demand away from traditional industrial areas), or to thefact that the location of nuclear plants away from population centresrequired a complete rethink of T&D and security of supply policies. As a consequence, electricity cuts are far more frequent in France thanin most other European countries. For instance, the average Frenchconsumer suffered 5 hours 22 minutes of cuts in 1986, against 2 hoursb)3}16 months and of burnup rates recently achieved. They include aplutonium credit of -0.16 FF/kWh (corresponding mostly to theintroduction of MOx fuel for PWRs) and a reprocessed uranium credit of-0.33 FF/kWh. In more recent fuel costs (estimated by DIGEC to bestable), the proportion of uranium and conversion is lower (33% oftotal), but this is compensated for by an increase in the proportion ofreprocessing costs (32%) and a decrease of credits for reprocesseduranium and plutonium (4.5%) (137). REFERENCES (1) The World This Weekend, BBC Radio, 8 November 1987. (2) Henney A, The Economic Failure of Nuclear Power in`Britain, Greenpeace, London, 1990. (3) Augereau J F, 'Le Rapport Tanguy: Une Autocritique sansComplaisance', Le Monde, 9 March 1990, p 28. (4) Guillaume H, Pallat R, Rouvillois P, 'Rapport sur le Bilan`et les Perspectives du Secteur Nuclaire Civil en France',`report to the Ministry of Industry, May 1990, GSIEN,Orsay, pp 3 29. 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(30) Commissariat Gnral au Plan, Prparation du IXme Plan fpRapport du Groupe Long Terme sur l'Energie, LafDocumentation Franaise, Paris, July 1983, 2 volumes. (31) CEA, Mmento sur l'Energie, Paris, 1990.f (32) DGEMP, Production d'Electricit d'Origin Thermique: Lesg Cots de Rfrence, Ministre de l'Industrie et degl'Amnagement du Territoire, DGEC, Paris. See also 'Cotdu KWh: Toujours un Net Avantage au Nuclaire', Revueg