French energy law could close third of EDF's reactors: report

PARIS (Reuters) - France’s energy transition law could force state-controlled utility EDF to close up to a third of its 58 nuclear reactors by 2025, the state audit office said in its annual report on Wednesday.

Two cooling towers and pressurized water reactors of the nuclear power plant of French supplier Electricite de France (EDF) are pictured next to the artificial bassin of Lake Mirgenbach in Cattenom, eastern France, January 27, 2016. Picture taken January 27, 2016. REUTERS/Wolfgang Rattay

The Cour des Comptes estimates that the planned reduction of the share of nuclear in French energy production to 50 percent by 2025 from more than 75 percent now could lead to the closure of 17 to 20 reactors if power consumption and exports remain at current levels.

“Only a very significant increase of electricity use or power exports could limit the number of closures but experts do not expect this will happen,” the auditor said.

It said that this could impact jobs at EDF and raised the possibility that the utility might demand state compensation.

The auditor said the impact of the law will have to be evaluated within the framework of the multi-annual energy plan, which Energy Minister Segolene Royal is set to present by the end of this month.

In a written answer to the auditor, Royal said that its estimates were based on a highly uncertain outlook for energy consumption.

The auditor also said that it estimates the cost of upgrading EDF’s ageing nuclear power stations will total some 100 billion euros ($112.79 billion) over the 2014-2030 period.

This estimate is well above EDF’s 55 billion euro estimate for the 2014-2025 period, which the auditor said is due to the fact that it also includes EDF’s operating expenses over that period.

EDF has repeatedly said it wants to keep its nuclear power stations at the current capacity level as it expects that the reduction of the share of nuclear in the French energy mix will come from growing demand, not from closing reactors.

For now, EDF plans to close its nuclear plant in Fessenheim, near the German border, in 2018, when it expects its new Flamanville reactor on the Normandy coast to start operating.

Reporting by Benjamin Mallet, writing by Geert De Clercq, editing by Louise Heavens