Nuclear Reactors 198 - France May Build More Nuclear Reactors To Replace Its Aging Fleet
Germany is shutting down all of their nuclear reactors. Other European countries are investing heavily in alternative energy sources. France gets about seventy five percent of its electricity from nuclear power. France's lower house of parliament has passed a law that would reduce France's dependence on nuclear power from seventy five to fifty percent. However, apparently the French do not intend to abandon nuclear power altogether.
The French Energy Minister recently said that France should build a new generation of nuclear power reactors to replace the aging French reactor fleet. Almost half of France's fifty eight reactors will reach the end of their licensed lifespan of forty years by 2025. The Minister is the first French official to recommend new reactors after the passage of the recent energy legislation.
EDF is a French utility company that is primarily owned by the French government. It produces twenty two percent of the electricity for the European Union, primarily from the fifty eight French power reactors it operates. Investors have been wary of pouring more money into nuclear power because France is in the process of re-evaluating its dependence on nuclear power.
The announcement by the Energy Minister has given a boost to the EDF stock price. Morgan Stanley recently upgraded a British energy company and Citigroup has made some positive comments about the nuclear industry. These events have made investing in French nuclear power reactors more attractive.
However, an analyst at Kepler Cheuvreux stated that new nuclear builds are not competitive with energy prices below one hundred and twenty dollars per megawatt hour. Cheap oil and natural gas have brought energy prices down recently. Recently, the British government had to guarantee a price floor for the new Hinkley Point C nuclear power reactor that will be operated by EDF.
EDF brings in more than seventy five billion dollar a year but it will have to spend about sixty five billion dollars in the next ten years to upgrade its existing plants. Some of the work that is required was made necessary by tightening regulations in light of the Fukushima disaster. In order to finance the upgrades, EDF is calling for the extension of licenses to sixty years. They claim that their reactor designs are based on U.S. reactor designs which were intended to last sixty years. The Energy Minister agrees that some of France's reactors can safely operate for up to sixty years. The authority for extensions of reactor licenses rests with the France's Nuclear Safety Authority, an independent nuclear watchdog agency. The ASN is suppose to make a preliminary decision about permitting extensions of reactor licenses this year. A final decision on the license life spans will be made by 2019.
The older reactors get, the more expensive they are to operate and repair. Electricity from nuclear power will just keep getting more expensive. Nuclear power is already facing stiff competition with solar and wind power reaching grid parity with other sources of energy in the near future. France would be better off decommissioning its aging fleet of reactors and replacing them with sustainable alternative energy sources.
