The financial jurisdiction therefore recommends “withholding” the final investment decision for the EPR2 program until its financing has been secured and more in-depth design studies have been carried out.
France is still “far from being ready” to realize its program to build six new EPR2-type nuclear reactors due to the financial and technical uncertainties surrounding this project led by EDF, according to a report from the Court of Auditors published on Tuesday. The financial jurisdiction therefore recommends “withholding” the final investment decision for the EPR2 program until its financing has been secured and more in-depth design studies have been carried out.
The French sector has started to organize itself but it is “far from ready and must still overcome numerous challenges, some of which are worrying”, judges the Court of Auditors in its report. “(The) delays and uncertainties […] reduce the visibility that players in the sector need to engage in industrial projects of this magnitude and obtain financing”, adds the Court, which warns: “The accumulation of risks and constraints could lead to a failure of the EPR2 program.”
EDF reacted by indicating that the definition of financing and regulation schemes with the State was “a prerequisite” for its final investment decision, which it previously said it envisaged for the beginning of 2026.
The report from the Court of Auditors constitutes the most serious alert since Emmanuel Macron announced the construction of six EPR2s at the start of 2022, without specifying the financing of this project which would start in 2027 or 2028 and would extend over nearly a quarter of a century. The cost of building six EPR2s was estimated at 51.7 billion euros in 2022, an amount that EDF has significantly increased in 2023, to 67.4 billion. The group, of which the State once again became the sole shareholder in 2023, has since worked on an “optimization” of the estimate, which it had planned to submit to the government at the end of 2024.
“Poor” profitability of the Flamanville EPR
After a previous report published in 2020 which recommended calculating the forecast profitability of the Flamanville 3 EPR (Manche) and the EPR2 and ensuring monitoring, the Court of Auditors notes that its request was not followed by effect. She mentions the “mediocre” profitability of the Flamanville EPR, connected to the network at the end of 2024, on the basis of a total cost which she estimates at around 23.7 billion euros including the financing cost, while EDF has gotten into the habit of communicating only the construction cost, reassessed at 13.2 billion at the end of 2022.
EDF, for its part, stressed on Tuesday that the competitiveness of the EPR2 program would depend in part on the agreement that will be reached with the State and the European Commission on its financing plan. Prior to the authorization from Brussels, “taking into account the significant investments already made by the company with the sector, the economic and political context of rising costs to come”, EDF considers it necessary to conclude with the State “a contract preliminary which sets the framework for the investments to be financed under this program”.
Referring to EDF's plans for new reactors in the United Kingdom, the Court of Auditors recalled that the group is faced with “a considerable increase” in costs at Hinkley Point and the withdrawal of its Chinese co-shareholder CGN in 2023. which makes French the sole financier of the project today. She thus considers it “concerning to note that no solution has yet been found to date” and recommends “not approving a final investment decision by EDF in […] Sizewell C before obtaining a significant reduction in EDF's financial exposure” in Hinkley Point C.
According to the Financial Times on Tuesday, the bill for the construction of Sizewell C could climb up to 40 billion pounds (47.6 billion euros), almost double EDF's initial estimate. The group reiterated that its contribution to the financing of Sizewell C was subject to compliance with certain conditions, in particular the capping of its participation at 20%.
The Court also recommended ensuring that any new international project in the nuclear sector “generates quantified synergies with the EPR2 program and does not slow down the timetable for this program in France”
