In a few weeks two 500-tonne steam generators will be hoisted into the reactor hall at Europe’s first next-generation nuclear plant in Flamanville, a significant step in the completion of a project designed to power 1.5m French homes.
It is a piece of good news for a venture that has been beset by cost overruns and delays since its construction began in 2007, hit by a curious but simple problem – In the 15 years since France last built a nuclear plant, people had forgotten how to do it.
“There was a generation gap between the last nuclear plant and this one,” says Antoine Ménager, site manager. “In that time, there was a loss of industrial expertise in France as people retired. There was a lot we had to relearn.”
French state-owned utility EDF, which is building a similar reactor in the UK, had estimated the project would cost €3.3bn and start operations in 2012. It later said the costs would, in fact, be €8.5bn and that the plant could start generating power in 2016.
For EDF, and the wider European nuclear sector, a key resolve is that this kind of delay should never happen again. Institutional knowledge needs to be kept intact, even at a time where there is little demand for new plants in home markets.
“The nuclear industry needs to ensure it keeps building, so that they protect talent, otherwise they are setting themselves up for serious problems,” says Jean-Marc Ollagnier, chief executive of Accenture’s Resources operating group.
The problem is that there is little fresh demand for power generators in Europe because of overcapacity on the continent as a result of weaker than expected growth, subsidised renewable energy and cheap US coal imports.
The nuclear industry is also having to contend with the cooling of popular and political attitudes towards nuclear power that followed the Fukushima disaster in Japan in 2011.
Since then, Germany decided to phase out nuclear power, Italy scrapped its planned nuclear programme and President François Hollande said he would reduce France’s dependence on nuclear power from 75 per cent to 50 per cent of for electrical generation capacity by 2025.
Preventing any problems with skills or technological expertise means the European nuclear sector needs to continue expanding abroad, particularly in China, where 17 nuclear reactors operate on the mainland, and 29 are under construction.
It is not just nuclear power where overseas expansion is important in terms of maintaining industrial capacity, technological innovation and a skilled workforce. It is important for renewable and conventional thermal power as well.
This is because, despite overcapacity expected over the next five to 10 years, Europe will need to build 800GW of power by 2035. Some 500GW of that is required to replace old thermal plants, which will need to be upgraded to meet new efficiency standards.
GDF Suez, for example, has said that once two planned power plants in Germany and the Netherlands are completed, it will build no power plants in Europe for the foreseeable future. But when demand returns, they will need to build again.
Expanding outside Europe is also important in the renewables sector where EDF, for example, is pushing into China, the US, Brazil, Russia and Turkey, developing and testing new technologies and building the talent base.
“In the future, there will be much greater demand for electricity in Europe, so we need to make sure we have the industrial capacity for a massive deployment in Europe when the time comes,” says Jean-Paul Bouttes, EDF head of strategy.
The expansion is partly because emerging markets are where growth opportunities are. France’s GDF Suez, Italy’s Enel, Spain’s Iberdrola and Germany’s Eon have all put foreign expansion at the centre of their corporate strategies, pointing to the dynamism of the markets.
“We’ve moved from being an old lady in a small market . . . to a multinational across 40 countries,” boasts Enel chief executive Fulvio Conti.
But unlike other industries looking to simply tap growth abroad, for utilities it is necessary to maintain technical knowhow and worker expertise for when European markets revive and they have to start building plants again.
Flamanville site manager Ménager points to two large concrete buildings that hold its back-up generators as an example of how they are increasing up their industrial knowledge. The first took four years to build; the second only two.
This knowledge will also help with the Hinkley Point reactor plant, soon to be built in the UK, he says. EDF says that cost estimates given for this £16bn project “include the lessons learnt from Flamanville”.