France prepares to nationalize its faltering nuclear industry

France is fully nationalizing its state-owned nuclear power company, currently 84%, Éelectricité de France (EDF) at the same time that the company expects a massive decline in profits. EDF has already warned investors that its core earnings will take a big hit this year, but it has sharply increased those expected losses to a massive level. 29 billion euros (Usually we say how much is in dollars here, but the European economy has experienced such a downturn – thanks in large part to energy problems – that the euro and dollar values ​​are nearly identical.) The massive loss is due to a series of unfortunate events that led to the isolation of more than half of EDF’s 56 reactors – a record shortfall.

The French nuclear sector was hit by several problems at the worst possible moment. The industry is dealing with a backlog of delays and shutdowns thanks to the Covid-19 pandemic, According to Reports From the Financial Times during the summer. In the few months since the Financial Times report, the situation has worsened, as severe droughts have dried up rivers around Europe, leaving some French and Swiss nuclear plants Without enough water to keep their systems cool.

As a result, French nuclear energy production has reached an all-time low. This is a major issue for the nation, from which it arises 70% of its energy comes from nuclear energy. Overall, France is a net energy exporter, thanks to its robust and reliable nuclear sector to date. Now it is being forced to import energy in a historically narrow market. The European continent is experiencing a crisis of high energy prices thanks to the chicken game with Moscow. In the wake of Russia’s invasion of Ukraine, the European Union has been weaning itself off its heavy dependence on Russian fossil fuels with the goal of imposing sanctions on the Kremlin for energy. In response, Russia’s Gazprom Cut off the continent’s natural gas supplies indefinitely via Nord Stream 1 pipeline, citing dubious maintenance issues with its timing.

The timing of the French nuclear meltdown is so tragic because of the political row with Russia. France has long been the global label for nuclear energy, with the highest per capita production rates and Evangelical enthusiasm To develop nuclear energy to enhance energy security in the era of climate change. France was not in any substantive way connected to the dangerous dependence on Russian gas imports that made the continent’s energy security so fragile. Indeed, I have taken pride in the energy independence built by nuclear power. But now, at a time when it was badly needed, French nuclear power failed to salvage the situation.

Now, the French government will bid to buy EDF entirely in order to take control of the company as it tries to patch the ship. In the coming weeks, the French government is expected to launch a tender offer for the remaining 16% of the company it doesn’t already own so it can unilaterally (and quietly) make decisions about building new reactors and tackling the myriad problems. current fleet. “People close to the operation said that the company’s financial problems have added to the incentives to remove it from the glare of the markets,” the Financial Times. Reports.

EDF said it plans to acquire The entire fleet is back up and running by early next year. In order to do so, the already indebted company would have to take on much more debt at the time the company is already under scrutiny for operational and control errors. Ultimately, the issues in France are not a problem with nuclear power at all – it’s a problem of mismanagement.

By Haley Zarimba for Oilprice.com

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