“There won’t be a nuclear winter after Fukushima” | AREVA North America: Next Energy Blog


In an exclusive interview with the French economic daily, Les Echos, AREVA CEO Anne Lauvergeon shares her outlook following the Fukushima disaster on the nuclear energy industry. Lauvergeon discusses the effects on the industry, attention on increased safety and security, political outlook, and how AREVA’s business is prepared for these challenges.

Three months after the Fukushima disaster, what are the consequences for nuclear power?

There are significant consequences. At Fukushima first. The situation must be stabilized rapidly. AREVA is without a doubt part of the solution. The second consequence is the end of “low cost, low safety” nuclear power so highly vaunted just a little while ago. The growth of nuclear power always means increased safety and increased security. The third consequence is the audits all over the world, and the necessarily more concerted approach between safety authorities. The fourth, and not the least, relates to public confidence. Different countries have extremely different reactions. The emotional epicenter is in Germany, but the French have also felt a strong “aftershock”. Elsewhere, the reaction is generally more pragmatic. We’re going to have to rebuild confidence.

But doesn’t the decision of a country as big as Germany signal an irreversible withdrawal from the atom?

Countries bigger than Germany such as China and the United States have confirmed their nuclear power programs, as have South Africa, India and Great Britain. Germany has simply reverted to the decision the Schröder government made in 2000. We weren’t counting on Germany for our long-term development! Naturally, with that mixture of fascination and competition typical of our ties with Germany, France is overawed at the Chancellor’s decision. But she isn’t saying how, in practice, the Germans will feed their growth while reducing their carbon impact.

Read the rest of the interview (as translated from the original article here)

Still, don’t you think that others could emulate it?

Some will try to draw inspiration from it. Especially in France. It’s very good for Germany to bet on renewable energies. AREVA is investing in them, too. And so we’re in a good position to know that they are by nature intermittent, while demand for electricity is continuous. A wind turbine operates on average 25% of the time, for example. To ensure continuous access to electricity, wind farms have to be backed up with gas or coal facilities. That’s more costly and not so efficient in terms of fighting CO2 emissions.

In the wake of Germany and Switzerland, Italy is turning its back on nuclear power. Is France alone now?

Alone with Great Britain, the Netherlands, Hungary, Sweden, Finland, Poland, the Czech Republic, Slovakia. Just taking the European Union, it’s crowded being alone! In Italy, a referendum had already been held in the wake of Chernobyl, in the same emotional context, and sealed the phase-out of nuclear. There was another round after Fukushima, with a strong dose of internal politics added to the mix. The result is no surprise.

But all the same, aren’t some countries hesitant, like the United States?

President Obama clearly reaffirmed that nuclear power is an integral part of the current and future energy mix of the USA. Right now, the price of shale gas extracted with few environmental restrictions makes it very competitive. And as always, the first deposits are the least expensive to extract. That will be less and less true in the future, and prices will naturally rise. The competitive advantage over the new nuclear is destined to recede.

There was a “nuclear winter” after Chernobyl. Don’t you think this will be the case after Fukushima?

No, I don’t think so. In the 1980s, investment in nuclear power had already slowed before the Chernobyl accident because prices for fossil fuels were unbeatable at that time. They’re much higher today and no one foresees a prolonged drop in the future. Nor was climate change a concern in 1986. It’s a major factor in the 21st century.

However, we’re expecting project schedules to slip because the safety authorities want to draw lessons from Fukushima. We’re talking about a few months or even a year in some countries, but in the end their requirements will move towards the generation 3 that AREVA bet on.

What is the impact on the group?

More than 80% of our revenue comes from the installed nuclear base. AREVA could continue to thrive even in the absence of new construction – a prospect I don’t believe for a second. Certainly, we’re going to have to do without the Japanese and German reactors that have been shut down, and to which we had supplied products or services. But the safety authorities’ audits are going to lead to investments in improvements. We’ve drawn up a list of suggestions, sort of a “Doctor AREVA’s prescriptions”, that we’re offering to our customers. Our integrated model enables us to offset the shift in some projects and to react quickly. Moreover, our gamble on renewable energies turns out to be the right one, in Germany as well! We’re also adapting our capital expenditures and continuing to reduce our overheads.

Your term expires at the end of June. You’re a candidate for another term. What’s your plan?

In 10 years, we turned AREVA into the global number 1 in carbon-free energy, both nuclear and renewable energies. We created close to 30,000 jobs in France. The group paid 3.4 billion euros to its shareholders. It would be a pity not to go all the way. I don’t think I’m the worst candidate. Nuclear is an exacting technology, and public opinion of it just as much so. I believe I’ve shown that I’m attached to the development of a nuclear power that meets the highest standards of safety, security and transparency. I also believe I’ve contributed to a calmer discussion of this topic by leaving the religious wars behind us and working towards harnessing synergies between nuclear and renewable energies. I want to continue, with the support of a significantly renewed Executive Board.

How would you qualify your relationship with EDF and its CEO, Henri Proglio?

It’s a relationship of major supplier to major customer. It’s common for this type of relationship to be complicated. We’re working together to develop a new strategic partnership. After Fukushima, skill and efficiency are the order of the day. There can be no doubt that with Henri Proglio, we’ll see eye-to-eye on these points.

The group reported an operating loss last year and will no doubt do so this year…

AREVA has made significant provisions on the OL3 project in recent years. Look at the A380, the A350, and the Boeing 787: all major technological projects have often slower than expected starts, like the EPR. I can’t comment on financial forecasts that haven’t yet been released, but you might be pleasantly surprised! Our strategy was implemented with the support and continuous oversight of our leading shareholder, the French State.

Does nuclear power risk being affected by the French political situation?

The French Greens are hoping to succeed in reproducing the German Greens’ strategy: get the Socialist party to abandon nuclear power and ultimately see a party on the right do the same. But they’re going to run into three parameters to which the French are much attached: our country’s energy self-sufficiency, electricity rates, and the fight against CO2. Not to mention that nuclear power represents more than 400,000 direct and indirect jobs in France and 2% of its GDP, as recently calculated by PriceWaterhouseCoopers. It’s the third largest employer after the automobile and aeronautical sectors and a significant source of exports. Imagine what our trade deficit would be without nuclear power! The debate will be tough but vital for our country.

What will be the scope of the new mining subsidiary?

The mines are a major asset for AREVA and a key component of our integrated model. The nuclear policy committee meeting of February 21 last, chaired by Nicolas Sarkozy, clearly reaffirmed this. Work is in progress to combine all of the mining assets in a single entity. It will be completed by the end of the year.

In offshore wind, will you respond to the requests for proposals for all five zones in France, even if you have to work with several partners?

We’re candidates for the three zones in the English Channel with GDF Suez and Vinci, and we might compete on the other two zones with European partners. It’s an opportunity for us to develop a French industry in this technology. I might add that we’ve identified three potential sites – Cherbourg, Dunkirk and Le Havre – to host our wind turbine manufacturing plants, with more than 1,000 jobs as well.


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