5D – Control of the fuel cycle
Summary: In addition to the control of nuclear safety (risk 5C), the operation of existing nuclear facilities (risk 5A) and new nuclear projects (risk 4A), the Group is exposed, in the context of nuclear activities, to the control of the nuclear fuel cycle.
Criticality: 
Intermediate
a) Context
The Group’s operating costs include nuclear fuel purchases.
EDF is supplied with uranium, conversion and enrichment services, fuel assembly supplies and spent fuel reprocessing operations for its nuclear fleet in France and the United Kingdom.
In France, EDF has set aside provisions for spent nuclear fuel management operations (transport, processing, conditioning for recycling) (see note 15 to the consolidated financial statements for the fiscal year ended 31 December 2022) based on the price and volume conditions of the master agreement signed with Orano in December 2008 and broken down in the successive implementation agreements (see section 1.4.1.1.2.3 “Issues relating to the nuclear activity”). These provisions amount to approximately €10 billion.
Note 15.1.1.5 “Inflation rate, discount rate and analyses of sensitivity” and note 15.1 “Nuclear provisions and dedicated assets in France” to the appendix to the consolidated financial statements for the fiscal year ended 31 December 2022 set out the connection between “costs based on year-end economic conditions”, which represent estimated amounts as at 31 December 2022 and “provisions made at present value”.
b) Main risks
Nuclear fuel supply
Prices and volumes are subject to fluctuations that depend on factors beyond the Group’s control, including political and economic factors (in particular, profitability outlook for mining investments, supply/demand imbalance or supply-side shortage, associated, for example, with the occurrence of an operating incident in a uranium mine or cycle plant, a delay in commissioning a new mine, or an event leading to institutional instability in a producing country, or restrictions/sanctions/embargoes, etc.).
Nuclear fuel logistics
The storage and transport of new or spent nuclear fuel is an industrial activity that requires specific safety and security measures. These requirements could become more stringent, generating additional difficulties and costs for the Group.
In the event of the collapse of this industrial logistics system, the Group could reduce or even interrupt all or part of the electricity generation at the affected sites, either due to the non-delivery of new assemblies or to the saturation of storage facilities, which could have a negative impact on the Group’s financial position (see section 1.4.1.1.2.3 “Issues relating to the nuclear activity”).
Transport of nuclear materials continues to be highly constrained, particularly having regard to the increase in security and regulatory requirements; in line with the management of the “yellow vests” (gilets jaunes) crisis, the Covid-19 pandemic was well anticipated and did not disrupt transport, but reminded us that the situation remains precarious.
In view of the saturation of the existing storage pools, and of the risk of the long- term impossibility of implementing multi-recycling in its 3rd-generation pressurised water reactors, or of recycling in 4th-generation reactors termed “GEN IV” (abandonment of the ASTRID rapid-neutron reactor), the fuel cycle could be jeopardised. This would have both operational and financial consequences.
Provisions for spent fuel disposal
The amount of provisions currently booked to cover the period not covered by the current agreement with Orano should be reassessed if the terms under which this agreement is renewed prove more costly than those currently applicable.
The contracts entered into in France and abroad may not sufficiently protect the Group from sudden or significant price increases. When these contracts expire, the Group may not be able to renew them, in particular at an equivalent price. This could have an adverse impact on the Group’s financial position.
c) Control actions
The supply risk management strategy consists of progressively securing the portfolio through competitive, diversified and long-term contracts in line with the objectives for covering requirements presented to the Board of Directors. Fixed-price contracts are preferred, or contracts including a limited market-price component, the latter systematically including ceilings/floors to reduce exposure to the market.
In the field of transport, the control actions implemented by EDF include strengthening the unpredictability of transport and ties to the authorities (HFDS/ IRSN/ASN), the prevention and reduction of potential impacts on the fleet, as well as the development of alternative drivers (anticipation of deliveries, inter-unit transfer, etc.).
The control of spent fuel storage capacity is essential to preserve the balance of the closed cycle. A new large-capacity spent-fuel storage pool will be commissioned by EDF in 2034 at the site at La Hague (see section 1.4.1.1.2.3 “Issues relating to the nuclear activity”). In the meantime, Orano plans to densify its existing pools on the site and is developing a dry storage solution for spent fuel.
Lastly, EDF’s strategy for the fuel cycle is to maintain the long-term perspective of a closed cycle based on GEN IV reactors.