October 9, 2019 / 6:37 AM / 14 days ago

EDF warns Flamanville weld repairs to cost 1.5 billion euros

PARIS (Reuters) - French utility EDF warned on Wednesday that its Flamanville nuclear project in France will cost 1.5 billion euros ($1.65 billion) more than previously expected as it counts the costs of weld repairs demanded by French nuclear watchdog ASN.

Running a decade behind schedule, Flamanville is now expected to cost 12.4 billion euros, EDF said, a month after warning its Hinkley Point C nuclear plant in Britain could cost 2.9 billion pounds ($3.6 billion) more than forecast.

EDF shares fell more than 1% to hit lows not seen in two years.

“It’s a disaster. EDF tried to compete and become a leader in the sector but it’s just one delay after another with them,” said Ion-Marc Valahu, fund manager at Geneva-based investment firm Clairinvest, which does not own EDF shares.

FURTHER DELAY POSSIBLE

Flamanville 3 was meant to open in 2012. In June EDF pushed back the start date by three years to 2022. Wednesday’s announcement indicates the start will now slide into 2023.

EDF said its preferred approach would be to use remote-operated robots to do the repairs at Flamanville and have the ASN validate the work by end-2020.

“The provisional schedule ...results in the date of fuel loading at the end 2022,” EDF said in a statement.

It usually takes five to six months after fuel loading to begin commercial operations, EDF Senior Executive Vice-President Xavier Ursat said on a conference call with reporters and analysts, indicating start-up will now be in 2023.

If ASN does not validate EDF’s preferred approach, EDF has a fall-back plan but that would mean additional costs of 400 million euros and an additional one year delay, Ursat said.

EPR TROUBLES

EDF had tried to convince ASN that eight welds in Flamanville’s containment building were fit for service despite flaws, but the ASN ruled in June that the weldings would have to be re-done.

The welding problems are the latest major technical problem with the Areva/Framatome designed EPR reactor model, whose 1,600 megawatt capacity makes it the world’s biggest reactor.

EDF shares are down more than 36% this year. CEO Jean-Bernard Levy has admitted its troubles have hurt the company’s credibility and French President Emmanuel Macron has demanded the company restructure.

The Olkiluoto EPR reactor under construction in Finland has also suffered years of delays and run billions of euros over budget.

Two EPRs built in China - Taishan 1 and 2 - started commercial operations in Dec. 2018 and Sept. 2019 after nine years of construction work.

Reporting by Geert De Clercq and Dominique Vidalon; editing by Sudip Kar-Gupta and Jason Neely

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