Property, plant and equipment in progress increased by €4,705 million as the level of investment in 2020 was significantly higher than the amount of assets brought into service during the year (see note 10.3). Investments in property, plant and equipment and intangible assets during 2020 (see note 10.7) mainly concern:
Since 2014 EDF has been implementing its “Grand Carénage” programme designed to enhance reactor safety and continue nuclear fleet operations beyond 40 years. The cost of this programme was estimated in 2015 at €55 billion (in 2013 euros) for the period 2014 to 2025. After optimisations and deferrals, this cost was revised in 2018 to €45 million in 2013 euros, i.e. €48.2 billion in current euros, still for the period2014-2025.
On 29 October 2020, EDF adjusted the programme’s cost to €49.4 billion in current euros from 2014 to 2025.
The new cost estimate mainly reflects the first findings on the works to be conducted in the context of the ongoing fourth periodic safety review of the Group’s 900MW reactors. This review focuses on studies, modification work and initially unplanned additional equipment to improve safety levels. The estimate also factors in the revised duration of scheduled maintenance outages for ten-year and partial inspections, in response to prior year experience and the impacts of the Covid-19 pandemic for the period 2020-2022 (see note 1.4.1).
The Grand Carénage programme is continuing with 33 ten-year inspections conducted at the Group’s 900MW, 1300MW and 1450MW reactors and 55 out of 56 emergency diesel generators commissioned.
The ASN’s decision setting the requirements for 900MW reactors in the light of the conclusions of the generic phase of their fourth periodic review is expected by the end of February 2021.
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:
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. TheGroup also stated that commissioning could not be expected before the end of 2022.
This work then resulted in discussions with the ASN, which sent EDF a letteron 4 October 2019 concerning the technical feasibility of these three scenarios.(5)
The penetration weld repair scenario presented as preferred by EDF involves the use of remote-operated robots, designed to conduct high-precision operations inside the piping concerned, a technology developed for nuclear power plants in operation that must be qualified for penetration weld repairs. The aim is to have this scenario qualified and validated 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 October 2019.
This led the Group to adjust the schedule and the estimated construction cost for the Flamanville(6) EPR.
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 as operating expenses(8),rather than being capitalised and will affect the financial years 2020, 2021 and 2022.
(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 andin-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) concerns the four steam generators and pressuriser at Flamanville 3 EPR – see press release of 9 September 2019.
(7) In 2015 euros, excluding interim interest.
(8) IAS 16.22 concerning abnormal costs incurred in connection with self-constructed assets.
