Note 3 Significant events and transactions

In addition to the planned disposal of E&P operations presented in note 2.3, the main significant events and transactions of 2019 are the following:

3.1 Nuclear developments

3.1.1 Flamanville 3 EPR

NB: The following information should be read in conjunction with the reminders of the key points of 2018 presented in note 3.5.3.

On 11 April 2019⁽¹⁾, EDF announced that it was aware of the opinion of the Permanent Group of experts for nuclear pressure equipment (GP ESPN), made public on 11 April 2019, regarding the quality deviations affecting the welds located on the main steam transfer pipes covered by the break preclusion principle⁽²⁾ at the Flamanville EPR.

The Nuclear Safety Authority (ASN) had held a meeting of the GP ESPN on 9 April 2019 as part of its investigation into these quality deviations:

• on 3 December 2018, EDF submitted a technical file to the ASN presenting the procedures for repairing and upgrading the main secondary circuit welds, which had shown deficiencies with respect to the break preclusion requirements, as well as for the specific justification method for the 8 welds located in the reactor containment building structure;
• the file was examined by the ASN, with technical support from the Institute for Radiation Protection and Nuclear Safety (IRSN);
• based on this examination, discussions took place at a GP ESPN meeting attended by EDF, which presented the background facts, their analysis and the methods for dealing with the issue. EDF answered all the Permanent Group of experts’ questions for the technical examination of this file.

EDF indicated at the time that the recommendations and solution avenues suggested by the Permanent Group of experts could have an impact on the commissioning schedule and construction cost, and that the Group would continue its discussions with the ASN, which was to issue its decision regarding action to be taken on this matter a few weeks later.

Consequently, the Group stated that a detailed update of the schedule and construction cost for the Flamanville EPR would be given after the ASN’s decision had been published.

On 20 June 2019⁽³⁾, EDF announced that it was aware of the decision issued by the ASN in its letter of 19 June 2019 regarding the quality deviations affecting the welds located on the main steam transfer pipes covered by the break preclusion principle at the Flamanville EPR.

In that letter, the ASN asked EDF to repair the eight containment penetration welds at the Flamanville EPR that were not compliant with the break preclusion principle.

On 26 July 2019⁽⁴⁾, EDF announced that three scenarios for upgrading the penetration welds were under consideration, and that after a detailed examination of the three scenarios and discussions with the ASN, the Group would communicate the schedule and cost implications of the selected scenario in the next few months. The Group also stated that commissioning could not be expected before the end of 2022.

This work resulted in discussions with the ASN, which sent EDF⁽⁵⁾ a letter on 4 October concerning the technical feasibility of these three scenarios.

The penetration weld repair scenario preferred by EDF involves the use of remote-operated robots, designed to conduct high-precision operations inside the piping concerned. This technology has been developed for nuclear power plants in operation and must be qualified for penetration weld repairs. The aim is to qualify this scenario with validation by the ASN by the end of 2020, at which date EDF will be able to initiate the repair work. A second scenario involving extraction and realignment work in the Safeguard Auxiliary Buildings is held at this stage as a fall-back solution.

Based on this penetration weld repair strategy, the EDF Board of Directors approved continuation of the Flamanville EPR construction at a meeting held on 8 October2019.

This led the Group to adjust the schedule and the estimated construction cost for the Flamanville EPR⁽⁶⁾.

The provisional schedule for implementation of the preferred penetration weld repair scenario, if the objective of ASN validation is achieved, sets the date of fuel loading in late 2022 and the revised construction cost at €12.4 billion⁽⁷⁾, an increase of €1.5 billion. Most of these additional costs will be treated in operating profit⁽⁸⁾, rather than being capitalised. These costs will affect the financial years 2020, 2021 and 2022. For 2020, the impact on EDF net income is estimated at €(0.4) billion, all other things being equal, with no impact on net income excluding non-recurring items.

The process of realignment of the 58 welds on the secondary system with quality deviations or not in compliance with the break preclusion principle requirements defined by EDF is being continued on site. At the same time, the second hot functional test phase was started on 21 September 2019. Hot functional testing checks plant performance under simulated normal operating conditions.

3.1.2 Deviation from technical standards governing the manufacture of nuclear reactor components by Framatome

Framatome has informed EDF⁽⁹⁾ of a deviation from technical standards governing the manufacture of nuclear reactor components. The deviation relates to the performance of the manufacturing process used, which did not respect temperature ranges in certain areas during manufacturing operations involving stress-relieving heat treatment on some steam generator welds. It concerns in-service components as well as new components which have not yet been put into operation or installed on any sites.

On 9 September 2019, EDF informed the ASN of its initial investigations concerning the deviation in a post-weld stress-relieving heat-treatment process applied to certain nuclear reactor components.

Work conducted since then by EDF and Framatome⁽¹⁰⁾ to make an inventory of the equipment and reactors concerned and confirm that they are fit for operation has identified 18 steam generators installed on six reactors currently in operation: reactors no. 3 and 4 at Blayais, reactor no. 3 at Bugey, reactor no. 2 at Fessenheim, reactor no. 4 at Dampierre-en-Burly and reactor no. 2 at Paluel.

(1) Cf. press release of 11 April 2019.
(2) The break preclusion principle is a very high standard of quality with stricter requirements than nuclear pressure equipment regulations for the design, manufacturing and in-service monitoring of certain items of equipment. These stricter requirements must be sufficient to consider that rupture of this equipment is highly unlikely. (When this standard is applied, a comprehensive study of the consequences of breaks in this piping is not required in the plant safety case).
(3) Cf. press release of 20 June 2019.
(4) Cf. press release of 26 July 2019.
(5) Cf. press release of 9 October 2019.
(6) The issue of deviation from the technical manufacturing standards for Framatome reactor components (stress-relieving heat treatment process for the welds with electrical resistance) which concerns the four steam generators and pressuriser at Flamanville 3 EPR is explained in note 3.1.2.
(7) In 2015 Euros, excluding interim interest.
(8) IAS 16.22 concerning abnormal costs incurred in connection with self-constructed assets.
(9) Cf. press release of 10 September 2019.
(10) Cf. press release of 18 September 2019.