The Court of Auditors on Tuesday called on the State and EDF to remove the numerous “uncertainties” before continuing the vast program of construction of new EPR nuclear reactors, the financing of which remains unclear.
In a critical 97-page report, the financial jurisdiction considers that “the accumulation of risks and constraints could lead to a failure of the EPR2 program”, recalling that the Flamanville EPR in Normandy was connected to the electricity network 12 years after the scheduled date, December 21.
“The most worrying uncertainties relate to the delays in progressing the design of the EPR2, the unknown cost of the first three pairs (of reactors) and the lack of financing for the program,” underlined the first president of the Court of Auditors, Pierre Moscovici, in front of the press.
“The decision of the EDF board of directors to reduce the financial envelope dedicated to the preparatory work for future EPR2s in 2025 clearly reflects these financial uncertainties,” he added.
After a project marred by setbacks and technical hazards, the costs of Flamanville 3, the first nuclear reactor to start up in 25 years, have exploded compared to the initial estimate of 3.3 billion euros. According to the Court, EDF today estimates its total cost at 19.3 billion in 2015 euros, or 22.6 billion euros in 2023, “financing costs included”.
“In reality, the total cost at completion of Flamanville 3 is higher and reaches 20.4 billion” in 2015 euros, “or 23.7 billion” in 2023 euros, calculated the Court in this monitoring report devoted to the EPR sector, the new generation reactor at the heart of the nuclear revival in France.
This revaluation of 1.3 billion compared to its previous report in 2020 (19.1 billion in 2015 euros) takes into account adjustments in the calculation of provisions presented by EDF and in the calculation of the financing cost.
After the “drifts” in costs and schedules of EDF's EPR projects in Flamanville, in Finland and in the United Kingdom, financial magistrates speak of “persistent” risks despite efforts to restructure a sector expected to stay the course of the relaunch of the atom set by Emmanuel Macron.
In February 2022, the president announced from Belfort that he wanted to build six new new generation EPR2 reactors with an option for eight others, breaking with long years of nuclear fallow.
“Poor profitability”
Since then, EDF, renationalized, has reorganized its governance and streamlined its processes. The Arabelle turbines have returned to French ownership. But the sector “is far from ready”, for the Court.
“The forecast profitability of the EPR2 program remains unknown at this stage, especially since the financing conditions (…) have still not been decided,” add the financial magistrates. They also note that EDF still refuses to send them information “on the forecast profitability and production costs” of Flamanville and the EPR2, as requested in 2020. However, the Court predicts “mediocre profitability for Flamanville 3 “.
In view of the uncertainties, the Court asks to “withhold the final investment decision for the EPR2 program”, envisaged for early 2026 by EDF, “until its financing is secured and the detailed design studies progress”, a stage only started in July 2024.
It also recommends “limiting EDF's financial exposure” in its EPR projects abroad and “ensuring” that any new international nuclear project “does not slow down” the schedules in France.
A recommendation that the CEO of EDF, Luc Rémont, says he shares “entirely”, in a response sent to the Court at the last minute.
Before an agreement between the group and the State and Brussels on the financial framework of the EPR2 program, “it is necessary for EDF to conclude a preliminary contract with the State which sets the framework for the investments to be financed under this program”, he said. added Mr. Rémont.
According to figures from EDF at the end of 2023 and pending a reassessment, the cost of constructing the first six EPR2s has already increased by 30%, from 51.7 billion to 67.4 billion euros, “at economic conditions unchanged and excluding the effect of inflation”, specifies the Court of Auditors.
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