French nuclear energy
France wants to export nuclear reactors. Who will buy them?
FOR France, nuclear power has long been a source of national pride. Its European Pressurised Reactor (EPR) is the world’s most advanced nuclear reactor and some consider it the safest. But since the nuclear accident at Fukushima in Japan, potential buyers have been having second thoughts (although the plant in question was not French.)
On December 12th Areva, France’s state-owned nuclear champion, said it would take a €2.4 billion ($3.1 billion) charge against profits. This will give the firm its first ever operating loss, of perhaps €1.6 billion for 2011. That hurts.
Areva is the world’s only one-stop nuclear shop, selling everything from uranium to fuel recycling. Much of the charge came from a slump in the value of UraMin, a uranium-mining firm bought for a giddy price in 2007, when nuclear power was surging. The price of uranium, which fuels reactors, tumbled afterwards (see chart).
Before Fukushima, Areva’s managers went on a hiring binge, expecting rapid growth in sales to rich and emerging markets alike. Now the firm will cut costs and investment, fire workers and sell assets.
In Europe, Areva’s most profitable market, people are newly nervous about nuclear power. Germany, Switzerland and Belgium have all opted to abandon it. Lower natural-gas prices have made it less competitive. And serious carbon curbs, which would boost a business that emits virtually no carbon dioxide, are nowhere in sight.