6. Financial statements

This system (main steam lines) was designed and manufactured according to the “break preclusion” concept, with stricter requirements for design, manufacture and in-service monitoring. These stricter requirements, requested by EDF, are backed up by a “high quality” requirement for the building of these systems.

Although these requirements were applied during the design phase, they were not properly incorporated into the welding work. Failure to meet these requirements does not necessarily entail non-compliance with the nuclear pressure equipment regulations.

From 21 March 2018, during an initial comprehensive inspection, EDF detected other quality deviations in welds on the pipes in the main secondary system of the Flamanville 3 EPR. The initial comprehensive inspection is a mandatory by law before commissioning plant, and mainly involves examination of the welds on the primary and secondary systems. It gives rise to an initial benchmark report on the state of plant before it begins operation.

In accordance with industrial procedures, the welds had been checked by the consortium of contractors in charge of manufacturing the system and each one had been declared compliant as the work was done.

On 10 April 2018 (see EDF’s press release of the same date), EDF notified the ASN of a significant event relating to the detection of deviations in the performance checks on these welds (part of the main secondary system was already concerned by the insufficient application of the “break preclusion” requirements).

EDF therefore began a further inspection during the second quarter of 2018 of all 150 welds concerned in the main secondary system. Of these 150 welds:

  • 87 welds were compliant with requirements;
  • 33 welds had quality deficiencies and had to be repaired. The work on site to repair these welds began in late July 2018;
  • EDF also decided to rework a further 20 welds which, although they had no defects, did not meet the break preclusion requirements defined by EDF during the EPR design phase. The files for adjustments to the first welds was sent to the ASN, and on-site welding work began in November 2018;
  • for 10 other welds, EDF submitted a proposal to the ASN detailing a specific justification method to confirm the high level of safety at the plant throughout its operating life. After a final analysis this number was reduced to eight. It also became clear from checks that one of these eight welds had a small quality defect. The ASN was due to closely examine EDF’s specific justification method in the following few months:
Commissioning schedule and construction costs

On 25 July 2018 (see EDF’s press release of the same date), the Group presented an update concerning these inspections, and adjusted the Flamanville EPR schedule and target construction costs.

  • the target date for loading the nuclear fuel was scheduled for the end of the fourth quarter of 2019, with start-up and hot functional testing planned for late 2018;
  • the target construction costs were revised from €10.5 billion to €10.9 billion (in 2015 euros, excluding borrowing costs).

On 21 January 2019 (see EDF’s press release of the same date) EDF announced that the schedule for hot functional testing had been revised, and was now expected to commence during the second half of February 2019.

The schedule and estimated construction costs remained tight. They included a timetable for receiving authorisations from the ASN as explained above, which among other factors was contingent on the ASN completing its examination of the methods proposed by EDF for repairing the welds in the main secondary system, as stated in the Group’s press release of 31 January 2019.

On 29 January 2019 the Chairman of the ASN announced that the ASN would issue a statement in May 2019 concerning the validation programme for the welds in the main secondary system, saying “if it turns out that the eight welds in the reactor containment building structure also need reworking then it will not be possible to meet the deadline.” A detailed update on progress on the Flamanville EPR, particularly the schedule and construction cost, would be issued after the ASN’s statement had been published. EDF was not in a position at that date to assess the impact in the event the ASN did not validate the proposed approach.

Note 4 Regulatory changes in France

4.1 France’s multi-year energy programme (PPE) and The Energy and Climate law

The multi-year energy programme (PPE) is a tool for the energy policy introduced by the French law on the energy transition for green growth adopted in 2015.

In principle, the PPE covers two successive five-year periods. The first PPE published in October 2016 departed from this rule by setting out two successive periods of three and five years respectively, 2016-2018 and 2019-2023. The revised PPE, which is not yet finalised, will cover the periods 2019-2023 and 2024-2028.

An initial draft PPE published on 25 January 2019 by the Ministry for the Ecological and Inclusive Transition

For nuclear electricity generation, the French government has now set the deadline of 2035 for reaching the objective of a 50% nuclear share in the national electricity mix.

To achieve this, 12 nuclear reactors will have to be shut down by 2035, in addition to the closure of the two Fessenheim reactors in the spring of 2020. The reactors concerned will be shut down when their fifth 10-year inspection is due, except for 2 reactors which will be shut down earlier in 2027 and 2028, provided the criterion of secure supply is respected. Two additional reactors could also be shut down in 2025-2026 if certain conditions relating to electricity prices, secure supply and European electricity market trends are fulfilled.

The draft PPE states that the French government will propose the terms of a new regulation system for existing nuclear plants that will protect consumers against rising market prices after 2025, while giving EDF the financial capacity to ensure economic sustainability of generation facilities and meet the requirements of the PPE in low-price scenarios.

It also states that “the Government, together with the industry, will conduct a programme of work by mid-2021 to examine the questions of the cost of new nuclear energy production and its advantages and disadvantages in relation to other low-carbon generation methods, the possible financing models, the project management modalities for new reactor projects and public consultation, and matters relating to the management of waste generated by the potential new nuclear fleet […]. Based on this information and depending on developments in the energy situation, the Government will make a decision regarding the suitability of launching a renewal programme for nuclear installations”.

For fossil-fired electricity generation, the objective is to close down the last entirely coal-fired plants by 2022, and stop granting authorisations for new power plants that produce electricity exclusively from fossil fuels.

This draft PPE also sets the objective of a significant step-up in the pace of development of renewable energies.

The draft went through various consultation processes in 2019 and 2020.