• France retreats on nuclear energy by sacking EDF CEO
• Energy minister pledges reliance on renewables
• Areva struggles with strategic direction

EDF Chief pushed out

French President Francois Hollande canned EDF’s pro-nuclear boss Henri Prolio just days after the European Union gave thumbs up to the UK’s Hinkley Point $24 billion new build which will include two Areva EPRs, and which will be built by EDF.

The impetus for the action was enactment of a new law that pushes renewable energy sources in France and commits to reduce France’s reliance on nuclear energy from 75% to 50%.

Reuters reported that Segolene Royal, France’s 4th energy minister since Hollande took power, and who is also the mother of his four children, has staked her tenure in the post on promoting renewable energy sources. However, neither Royal nor anyone else in Hollande’s government has said where the power will come from if the government pulls the plug on 25% of its nuclear generating capacity.

Prolio is being replaced by Jean-Bernard Levy, the CEO of a defense electronics firms. Previously, he held a senior civil servant position in a state-owned telecommunications firm. He went to high school with Hollande, but has a mixed record in terms of his career political affiliations. He has no background in power generation or electricity markets.

Hollande needs the greens to keep his majority in parliament. His administration is deeply unpopular with a nearly invisible approval rating of just 13%. A budget battle over planned spending in 2015 will be a test of Hollande’s government. This week he repeated his promises to green groups to close down the 1600 MW Fessenheim nuclear plant.

The head of the Green party Emmanuelle Cosse is already taking credit for that event even though it isn’t scheduled to happen until 2017. However, Royal said last month that EDF recently invested 500 million euros in Fessenheim to upgrade it. Royal added that she might choose to close a different reactor.

France is also building a new 1650 MW Areva EPR in France at Flamanville. EDF originally predicted France’s first EPR would cost 3.3 billion euros and start commercial operations in 2012. In late 2012 EDF announced that the estimated costs had escalated to 8.5 billion euros ($10.85 billion)($6575/Kw), and the completion of construction would be delayed to 2016.

Areva bets its future on India, China, and the UK

While EDF CEO Prolio is signing his retirement papers, Areva CEO Luc Orsel is doubling down on the state-owned firm’s plans for multiple EPRs being built in China, India, and the UK. The firm has plans to build six of its giant 1650 MW reactors at Jaitapur, India.

The negotiations for the first two units with India’s Nuclear Power Corp. have been stalled by local protests and opportunistic politics including India’s draconian liability law. However, Areva representatives in India say they expect to complete negotiations to break ground by December.

Elsewhere, two EPRs are under construction in Taishan, China. Areva is negotiating to build a $15 billion spent fuel reprocessing plant in China. According to Areva managers, the technical scope of the plant has been set, and now the focus is on cost and schedule.

Two more EPRs are scheduled to be built at the Hinkley Point site in the UK. They just got a green light from the European Union over guaranteed rates for electricity to be sold to UK customers once the reactors enter revenue service.

While Oursel is showing an order book with a growing number of lines of black ink, he also faces problems at an EPR under construction in Finland which has produced buckets of red ink and is responsible, in part, for the firm’s lackluster financial performance. Another EPR being built in France is also running behind schedule and over budget.

French President Hollande is said to be considering replacing Areva’s supervisory board with one that would have more power to second guess the CEO’s decisions. Given Hollande’s retrenchment on nuclear power generally, Oursel faces an uncertain future.

Update 10/21/14 – Reuters reports Areva said on 10/21 its Chairman and Chief Executive Luc Oursel had decided to step down for health reasons. According to the wire service, a statement from the company, which makes reactors and supplies nuclear fuel, gave no indication of timing, or about who might take over managing the firm

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