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EdF plans to lead Britain into the new nuclear age
By : Richard Orange
22/11/2006

EDF Energy, the French power giant, will seek a licence to build a new
£2.5bn (E4bn, $5bn) nuclear power station in Britain early next year, its
British chief executive, Vincent de Rivaz, has revealed.

His plans are part of Europe's revived interest in nuclear power, spurred
by higher oil prices, uncertainties over Russian gas supplies and the need
to reduce greenhouse gas emissions.

Governments in Europe, including Finland, Sweden and Poland, as well as
Great Britain and the Bush administration in America, are currently
reviewing or reviving nuclear energy programmes cancelled or delayed
because of previous concerns about safety.

Poland is also showing renewed interest in nuclear power to reduce its
reliance on Russian oil and gas. In the US, several energy companies are
making bids to build new nuclear plants and are in the process of
identifying sites.

Finland has four reactors which, like Britain's, are ageing, having
started generating power between 1977 and 1983. But at Olkiluoto, it is
building a 1,600 megawatt reactor that will raise to 35% the country's
nuclear power's share of its electricity generation. The E3bn plant's
construction is said to be about a year behind schedule.

Called a European Pressurised Reactor (EPR), it is the first of its type
under construction. A similar reactor type is being built in France, which
has enthusiastically embraced nuclear generation since the oil crisis of
the 1970s. This will start producing power in 2012. Areva, the French firm
behind the design of the reactors, claim the design is safer than older
reactor types. Sources told The Business that Areva will independently
apply for a licence for the EPR in Britain.

EdF's decision to apply for a British licence makes it the first company
to confirm plans to become involved in the construction of a new
generation of British nuclear power stations, a programme backed by Prime
Minister Tony Blair.

At a meeting organised by the Utility Strategy Group, De Rivaz said: "We
are working closely with the [British] Nuclear Installations Inspectorate
(NII) and we look forward to be able to make the first proposals early
next year."

Three companies, EdF from France and Eon and RWE from Germany, have
expressed interest in helping build Britain's new nuclear power stations
but until de Rivaz's statement, they have only supported construction "in
principle".

De Rivaz said he expected to work closely with British Energy, which owns
eight of Britain's 12 nuclear sites to determine where to locate the new
nuclear power station. Britain's nuclear power stations generate around
one-fifth of total electricity generation. By 2015, all but three plants
will have stopped generating power.

The EPR, which EdF is most likely to favour, is only suitable for a few
British locations because it produces more power than the National Grid
can support in some regions of the country.

Other designs, such as Westinghouse's AP1000, GE's Advanced Boiling Water
Reactor or Canada's Candu reactor may also be put forward.

EdF will make its British application public shortly after the NII
publishes guidelines on the licensing process in January. The initial
stage of licensing will involve gaining British regulatory approval for
one of the handful of modern nuclear reactor designs to be built on
existing sites. De Rivaz said he believed that once its application was
made, EdF could obtain a licence by the end of the decade, and have its
new nuclear power station generating electricity by 2017.

Although de Rivaz said the new nuclear programme could be financed without
subsidies, he wanted the British government to guarantee a minimum price
for the carbon emissions credits nuclear and renewable generators will
receive.

Brian Count, chairman of clean coal start-up Progressive Energy, said that
the minimum price would need to be at around E15 per tonne to make new
nuclear investments economic.

The Prime Minister has for some time supported a nuclear power replacement
programme to meet a predicted future energy gap as Britain's ageing power
stations are decommissioned and North Sea oil and gas runs out. It can
take up to three years to obtain a licence, a further three years for
planning - and objections - and four years to get a plant into operation.
That means that if Edf won a licence by 2010, it would be 2017 before the
first of the new-builds could start producing electricity.

The Prime Minister believes that a new-build nuclear programme can be
achieved without the need for state subsidies because energy prices are
likely to be at current levels for some time. As a sign of nuclear's
growing importance to the Blair government, the energy brief is now being
handled at the Cabinet level for the first time in 10 years. Two weeks ago
Blair made it the personal responsibility of Alistair Darling, the trade
and industry secretary.

The forthcoming Climate Change Bill in the current parliamentary session
is also likely to back the need for nuclear power. The energy generating
industry's trade unions support the programme and fear job losses if
ageing nuclear power plants are not replaced. Energy companies are keen to
present themselves as providing the solution to the government's challenge
to meet the need for renewable low carbon producing energy. Areva claims
its new generation of nuclear plants are much safer than older reactors,
with modern devices to stop radiation leaks and the ability to withstand
the impact of a jumbo jet loaded with fuel.

Last month EdF's De Rivaz praised the British government for its
"leadership" and for "influencing the wider world on climate change". The
new nuclear investment would stretch across eight parliaments, he said,
and energy companies need a watertight political framework to work in.
"Just as we are actively engaging with the government to build confidence,
we are also engaging across the wider public," he said.

Last year, Britain generated 19.9% of its electricity from nuclear power.
In France it was 78.5% and in Sweden 46.7%.