* Finland's Fennovoima drops Areva, Czechs confirm exclusion
* Areva not sold a reactor since 2007, hopes to sell 10 by
* French greens call for parliament enquiry into cost
By Geert De Clercq
PARIS, Feb 25 French nuclear group Areva's
exclusion from a Finnish nuclear tender is another blow to the
reputation of its EPR reactor and raises questions about
France's ambitious nuclear export plans.
Finnish nuclear consortium Fennovoima said on Monday it had
selected Toshiba as sole candidate to build a large
nuclear reactor, dropping Areva.
Hours later, the Czech competition regulator ruled that
utility CEZ had not broken public procurement law by
excluding Areva from a contract last year.
That decision leaves Toshiba's U.S. unit Westinghouse vying
with a consortium led by Russia's Atomstroyexport, and Areva
with another key European contract slipping through its fingers.
Earlier this month Teollisuuden Voima - another Finnish
utility, for which Areva is building its first European
Pressurized Reactor (EPR) - announced further construction
delays. The many delays and cost overruns have led to open
conflict between Areva and Teollisuuden Voima.
Even where Areva is not the main contractor, the EPR has had
a bad press.
Just weeks ago British utility Centrica pulled out
of plans to build EPRs in Britain with French utility EDF
, and in December Italy's Enel pulled out from
the construction of an EPR in Flamanville, northern France.
From a cash flow perspective, these disappointments are not
life-threatening for Areva, a diversified group which owns
uranium mines, enriches uranium, builds and maintains nuclear
reactors and manages nuclear waste.
Reactor sales and services generated sales of 3.45 billion
in 2012, just over a third of its 9.34 billion euro total
revenue, and most of the division's sales come from maintenance
to its installed base of more than 100 reactors, nearly a
quarter of the world's total.
Between 2009 and 2011 nuclear newbuild revenue ranged
between 741 and 876 million euros per year.
But if Areva wants to maintain its lucrative reactor
maintenance business, it needs to sell reactors, and it has not
sold a new one since 2007, when it sold two EPRs to China
Guangdong Nuclear Power Corporation in Taishan.
"Areva's uranium mining and enrichment services are real
cash-cows, but in terms of credibility, commercial perspective
and long-term viability, Areva needs to sell reactors," said
Pierre Boucheny at Kepler Capital Markets.
"With every defeat, things become more difficult."
Areva CEO Luc Oursel says he still aims to sell 10 EPRs by
the end of 2016, but doubts are growing.
"What if Areva were dreaming?", French online financial
daily La Tribune headlined last month.
Areva is hoping to sell two more reactors in China, two in
India, two in Britain, one in Jordan, and even another one to
It also hopes for a share of a mega contract in Saudi
Arabia, which is considering building the equivalent of 10 EPR
reactors. The French government is lobbying intensively on
But the parliamentary faction of France's green party - part
of President Francois Hollande's socialist-green coalition
government - said on Monday it will demand the creation of a
parliament committee to investigate the troubles with the EPR.
"The failure of the EPR on export markets is patently
obvious: the United States, Great Britain, the Emirates, and now
Finland," said green party MP Denis Baupin.
Baupin said the committee would have to look into the EPR's
construction delays, budget overruns and costs "which, in the
end, will have to paid by French consumers and taxpayers".
Areva has repeatedly said that the EPR's troubles are due to
the fact that it is a new model and that costs will come down
once it can build them in series. The two being built in China
are on schedule and within budget.
"The problem with the EPR is that if more are built, costs
will go down, but costs do not go down because nobody wants to
build one," a nuclear trade magazine analyst told Reuters.
Areva will release 2012 earnings on Thursday.