France May Be Forced to Say Goodbye to Its Nuclear Program
June 5, 2015
France has decided to rescue its Areva nuclear energy company once again. In 2010, Areva's finances had been restored by the forced sale of its transport and transmission activities to industrial group Alstom and electrical engineer Schneider.
For all intents and purposes, Areva is dead. It was created in 2001 by throwing together various nuclear energy related state assets, as a sort of desperate leap forwards to provide cash-generating activities to the loss-making nuclear power station building activities.
Nuclear was a key competence of France and a major building block of its energy strategy. France has to import its oil and gas; it has closed its coal mines and is uneasy about entering into shale energy. It has big water reservoirs, sea tide turbines and is expanding its park of wind turbines, but that does not come close to compensating its energy appetite.
External factors may have precipitated the crash of Areva, but the cause is internal. Areva and the French nuclear industry is controlled by engineers and state officials and the market comes as an afterthought. These engineers design the best possible nuclear reactors with their computer programs and small-scale models, but they do not design reactors they know they can build. By pushing the technological barriers, out of an intellectual challenge and national pride, they pushed the projects beyond feasibility.
France needs to consider allowing foreign stakes in the capital structure, either direct or in joint venture. The brilliant engineers need to be contained to their state research institute and allowed to brood on new technologies, but kept away from any construction projects as long as the feasibility of their projects, technical and financial, is not proven.
Source: Marcel Michelson, "France's Nuclear Industry Dream Faces Melt-Down at Expense of State Coffers, Tax Payers," Forbes, June 4, 2015.
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