Gas crisis a PR coup for French nuclear industry

PARIS (Reuters) - France's vast nuclear power network has largely shielded it from the Russian gas crisis, handing the country's atomic energy sector an unexpected public relations coup.

With 80 percent of its electricity generated by nuclear power stations, the highest proportion in the world, France was able to reassure nervous households and industry after the Russia-Ukraine dispute cut off gas supplies to Europe.

The gas crisis coincided with exceptionally cold weather in France, testing its power system to the limit as households turned up their heaters to maximum.

"The French must be delighted that the country didn't bet only on gas when we see what is happening with the gas (crisis)," EDF's Chief Executive Pierre Gadonneix said on French radio last week.

France has been a staunch advocate of nuclear power since the 1970s oil crisis which led it to build up Europe's largest network of 58 reactors.

State-owned electricity giant EDF is now marketing this savoir-faire (expertise) worldwide, as demonstrated by high-profile moves into Britain and the United States over the past few months.

France hopes to lead a global renaissance of atomic power as countries seek to fight global warming -- nuclear is virtually carbon dioxide free -- and aim to boost their energy independence.

China, South Africa and Italy are the next targets for EDF, which has said it wants to finance, build and operate European-designed new-generation reactors across the globe.

STRONG SELLING POINT

"The Russian-Ukraine gas crisis is a strong new selling point for the French nuclear industry," said Jean-Marie Chevalier, head of the geopolitical energy center at Paris Dauphine University.

"The crisis will allow the French nuclear sector to alert countries such as Germany or Italy, which are highly dependent on gas, of an energy landscape full of uncertainty," he said.

German decision makers, who are faithful energy partners with Russia, are now likely to present more independent scenarios, including a review of plans to shut nuclear reactors.

"When you see upcoming European projects, 58 percent of them are fossil fuel-based power plants, including 40 percent which are gas-fired plant projects," said Colette Lewiner, head of utilities at French consultancy firm Capgemini.

"This will only increase Europe's dependency on Russian gas," she said, adding that Europe should on the contrary be raising its share of nuclear.

MORE GAS NEEDS AT HOME

While its neighbors may be forced to study ways of cutting their dependency on Russian gas, France must prepare to increase its imports, as it builds new fossil fuel-fired power plants to better cope with demand during peak times.

But France imports just 15 percent of its gas needs from Russia, and thanks to its diverse supply sources, this low level of exposure should be maintained.

French energy demand broke new records last week as domestic heating demand soared, testing national peak supply capacity to the limit.

EDF, which last week warned power cuts might occur in remote parts of the grid, created new peakload capacity of 3,100 megawatts over the last three years and says a further 1,900 MW is needed by 2012, equivalent to two nuclear reactors.

The insufficient slack in the French power system meant last week's surge in demand required heavy imports of electricity from Germany's gas and coal-fired plant network.

"The current energy trend is for diversification and I tend to believe that France is too dependent on nuclear energy," Chevalier added.

"For peak needs, nuclear is not a solution because it's not economical to use atomic power for just a few days per year," Capgemini's Lewiner said.

(Editing by Matt Gil and James Jukwey)