PARIS Nov 12 French state-controlled utility
EDF will consider extending the depreciation period for
its nuclear plants, its chief executive told a newspaper,
potentially freeing up cash for the country's promised shift
towards greener energy.
Sources close to the matter told Reuters in September that
France could help finance a drive for more renewable energy by
extending the depreciation period of EDF's nuclear plants, which
would boost EDF's profit and the dividends it pays the
"The accounting issue will be presented to the board in due
time," EDF CEO Henri Proglio was quoted as saying by French
daily Les Echos on Tuesday.
Proglio gave no further details and an EDF spokeswoman
declined to elaborate.
An extension of the depreciation period could come ahead of
the approval of the lifespan of EDF's reactors by nuclear
watchdog ASN, although there is a precedent for that.
In 2003, EDF extended the depreciation schedule for nuclear
reactors in its accounts to 40 years from 30 years, a full six
years before the ASN agreed to the extension of the fleet.
EDF's 58 nuclear power reactors are on average 27 years old,
with the first reactor reaching 40 in 2018.
An industry source told Reuters that EDF already does major
repair and upgrading work to its reactors, which effectively
extends their lifespan beyond 40 years and that an extension of
the depreciation schedule would reflect the effective lifespan
of the assets.
Even if EDF's auditors would allow it to make the accounting
change now, it could backfire on the company later because the
ASN decision in principle on whether or not to allow extensions
will not be made until 2015 and final decisions will be made
reactor by reactor from 2020.
The watchdog's head of nuclear power plants told Reuters
last month that the ASN has no preconceived idea of an
acceptable lifespan for nuclear plants but said that the longer
the extension, the harder it is to justify.
Proglio also said that if France wants to keep 50 percent of
nuclear power in its power generation mix, shutting down
reactors after forty years would mean the country would need to
decide on renewing them now, as it takes ten years between
deciding on new nuclear plants and connecting them to the grid.
French President Francois Hollande has pledged to reduce the
share of electricity generated by nuclear power from the current
75 percent to 50 percent by 2025.
Proglio has said that this target will be achieved by
keeping nuclear output steady as demand grows.
Proglio told Les Echos that he expects the current fleet
would be replaced by 1,600 megawatt EPR reactors designed by
French state-controlled nuclear group Areva, with
which EDF is also working on designing a 1,000 megawatt reactor.
"We need to broaden the range of our reactors," he said.
(Reporting by Geert De Clercq; Editing by Mark Potter)