Paris--France faces a unique challenge as it moves to save nuclear reactor manufacturer Areva and salvage one of its world-class industries and jobs, while at same time reducing its own reliance on atomic power.
The French presidency on Wednesday endorsed merging Areva's reactor-building unit with state-owned electricity company EDF, adding that the government would spend "as much as necessary" to recapitalise the troubled nuclear group, which is also controlled by the state.
Economy Minister Emmanuel Macron said Thursday that the government aims to "stabilise, save" the nuclear industry which he hailed as "an industry of the future in France and abroad."
France has the world's second-largest nuclear sector and generates a greater proportion of its own electricity through nuclear power than any other economy -- around 75 percent of its power needs.
It has also made the export of nuclear technology an economic priority, with Areva and EDF promoting the European Pressurised Reactor (EPR), a third-generation reactor design that France considers the most advanced and safest in the world.
However, the future of the industry has been clouded since countries have moved to reduce or eliminate nuclear energy since the 2011 Fukushima disaster in Japan.
Germany for example intends to completely phase out nuclear power by 2022.
And a rising Greens movement has encouraged France to cut its dependence, with legislation near final adoption aiming to reduce reliance on nuclear plants to 50 percent by 2025.
Meanwhile, Areva has run into major difficulties with the construction of its first EPR reactor in Finland, which is now expected to begin operating only in 2018, nine years late, causing Areva nearly 4.0 billion euros ($4.5 billion) in losses.
And it was recently discovered that the lid of the reactor vessel that Areva manufactured for EDF's EPR reactor in Flamanville, France, has a serious manufacturing defect which means it may not be nearly as resistant to shocks as required.
The clouds over the nuclear market and the manufacturing problems have led to a meltdown in the finances of Areva, which is 87-percent owned by the French state.
In March, Areva reported a record net loss of 4.8 billion euros in 2014 as it absorbed costs linked to delays, and said it would make savings worth around one billion euros over the next few years.
And in May, Areva said it would cut up to 6,000 jobs worldwide as it seeks to slash its costs by a billion euros by 2017.
AFP
