EDF Slumps to Seven-Week Low on Opposition Plan to Shut 24 Reactors

Author: Spencer Ogden
Date posted17/Nov/2011
Author: Spencer Ogden

Electricite de France SA slumped to a two-month low in Paris trading after the opposition Socialist and Green parties united to campaign for the closure of 24 nuclear reactors by 2025 in next year’s presidential elections.

EDF, operator of the country’s 58 reactors, slid 4.4 percent to 19.83 euros, the lowest since Sept. 13. The shares are down 35 percent in the year to year.

“France would significantly damage its power self-sufficiency,” Damien de Saint Germain, an analyst at Credit Agricole CIB Research, said in a report. Halting the reactors could cut EDF’s annual earnings before interest, tax, depreciation and amortization by as much as 4.9 billion euros ($6.6 billion), the report said.

France’s reliance on nuclear energy has been called into question by opposition politicians and environmental groups since the Japanese atomic disaster at Fukushima in March. The meltdown already spurred Germany to shut down some reactors and announce plans to withdraw from nuclear power by 2022.

The two opposition parties agreed to campaign for the shutdown of 24 nuclear reactors by 2025 and the immediate halt of the oldest plant at Fessenheim. The Greens favor a complete halt of France’s nuclear reactors, which provide more than three quarters of the country’s power, while Socialist candidateFrancois Hollande has called for the lowering of France’s dependence on atomic power to 50 percent by 2025.

‘Real Break’

“There will be a real break, a change in France’s energy policies,” Cecile Duflot, national secretary of the Europe Ecologie-Les Verts party, said today on Canal Plus television.

The parties failed to agree on the future of EDF’s so-called EPR atomic reactor under construction in Normandy, which the Greens want stopped and the Socialists would maintain. The parties, which reached their accord late yesterday, also didn’t reach an agreement on phasing out fuel recycling to make so-called MOX fuel, Socialist lawmaker Manuel Valls told France Info radio.

“The perspective of getting out of nuclear isn’t in the text” of the agreement, Valls said, reiterating Hollande’s plan to lower France’s dependence on atomic power to 50 percent.

Debate in France has intensified in recent weeks about the consequences of a shutdown of EDF’s existing nuclear reactors in the coming decades.

‘Absolute Regression’

“It’s unbelievable and an absolute regression,” French Industry Minister Eric Besson said in response to the proposal, which would “destroy” the country’s nuclear industry.

Besson and the power-industry lobby including EDF have predicted that extra costs, higher power prices and lost jobs would result from Hollande’s proposal. French President Nicolas Sarkozy has reiterated support for more nuclear investment.

Anti-nuclear organizations criticized the accord today as not going far enough in calling for the halt to construction of the EPR at Flamanville as well as production of MOX fuel, or plutonium-uranium mixed oxide, which is used in some French reactors. French reactor builder Areva SA is the biggest maker of MOX, which comes from recycled spent nuclear fuel.

“The nuclear lobby has shown once more how powerful it is in directly influencing an accord between two political parties,” Greenpeace said in a statement. MOX production “is the most polluting, dangerous and controversial in the nuclear assembly line.”

‘Serious Consequences’

Areva warned the Socialists of the “serious consequences”for thousands of jobs if fuel treatment and MOX production businesses were halted, according to an Agence France-Presse report, citing an unnamed spokesman at the company.

Criticism of the plans also came from the Confederation Generale du Travail labor union, which represents most workers in the energy industry.

The economic, environmental and social repercussions of the proposal if implemented would be “disastrous,” the CGT said in a statement. Shutting reactors would be a “huge industrial waste” and lead to a doubling of power prices, the union said.

Sarkozy’s approval rating rose four percentage points in November to 34 percent while Hollande lost three points to 53 percent, according to an OpinionWay poll for Metro published Nov. 14. The survey was carried out from Nov. 4 to Nov. 9.