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EDF’s loss is due to the Arenh (Accès régulé à l’énergie nucléaire historique - regulated access to historical nuclear energy). This is a regulated market that

by venj 4y ago

EDF’s loss is due to the Arenh (Accès régulé à l’énergie nucléaire historique - regulated access to historical nuclear energy). This is a regulated market that was built to give a fixed price per GWH for new electricity companies. The goal was to allow new providers to enter the market before investing massive amount of money in new power plants. The idea was the following : -EDF provides 100TWH at a fixed price, to allow newcomers to enter the electricity market (which was a monopoly) - new companies would then invest in new power plants to reduce long-term costs. It did not work as expected: new power companies just bought cheap electricity and re-sold it without investing in their own plants. That worked OK for a few years. But this year, EDF had a perfect storm: - several nuclear reactors were taken down for a scheduled maintenance - corrosion issues were detected in several other reactors, bringing them down at the same time - the Ukraine war caused a massive increase in fossile electricity prices. So EDF still had to sell electricity at a low price as defined by the Arenh, but had to import electricity at a higher price to compensate for their unavailable reactors. This situation is completely absurd: EDF has to import electricity at high market price to sell it to a lower price through the arenh. We even see some companies benefiting from the Arenh that are suspected of stopping the B2C segment just to resell the electricity on the European market at a higher price. That’s why EDF is losing billions this year. Here is an article explaining the Arenh and its flaws in more details (before the war so quite outdated, sorry I couldn’t find more sources in English): https://www.magnuscmd.com/the-arenh-regulated-access-to-frances-historic-nuclear-energy/ https://www.magnuscmd.com/the-arenh-regulated-access-to-fran...

xyzzyz 4y ago
Don’t even bother explaining that it is a result of an explicit political decision aiming to force the nuclear power industry to subsidize the renewables from its profits. In the end, regardless of your efforts, people will use the losses the nuclear incurs to subsidize renewables as a proof that nuclear is uneconomical, and that renewables beat it handily and are the way to go.
- threeseed 4y ago
  > people will use the losses the nuclear incurs to subsidize renewables as a proof that nuclear is uneconomical, and that renewables beat it handily There is already plenty of proof around the world that renewables are cheaper than nuclear.
  - mensetmanusman 4y ago
    Not if you calculate in the cost of wanting to have a nuclear weapons and submarine fleet…
  - Krssst 4y ago
    Maybe cheaper as of today if we don't account for storage, but since buulding renewables use far more materials than nuclear, would fossil fuels which ensured cheap production and transport become lacking, or base materials extraction not being able to follow a rising demand, I am not sure it would still be the case.
    - TheOtherHobbes 4y ago
      If nuclear used fewer raw materials nuke plants wouldn't be huge - huge - capital projects, wouldn't take years to come online, and wouldn't have huge cleanup costs. If the money spent on nukes had been spent on renewables and on developing storage we wouldn't have these problems. This was predictable decades ago. The reality is that nukes are a political solution to a political problem. It's nice that they sometimes generate energy for a while, but there is no sense in which they've ever been a rational economic choice.
      - mathiasgredal 4y ago
        Nuclear uses roughly an order of magnitude fewer ressources than wind, without factoring in storage: https://imgur.com/a/Kc2h21O https://imgur.com/a/Kc2h21O. Source: https://www.energy.gov/sites/prod/files/2017/03/f34/quadrennial-technology-review-2015_1.pdf https://www.energy.gov/sites/prod/files/2017/03/f34/quadrenn... (page 390)
- t0bia_s 4y ago
  Probably not, when Europeans realize, that solar pannels manufacturing is dependent on China.
- rjzzleep 4y ago
  Wonder how much of this is related to the fact that France's energy minister have been MBA and political science graduates for quite some time. The previous one was Hollande's partner, so it's just another kind of nepotism[1]. Macron selling off France's nuclear infrastructure probably doesn't help either. Does anyone here have historical knowledge of Europe's glory days? Were there more actual scientists and engineers in key positions in Government in the 60s and 70s? For example in Germany Helmut Schmidt(74-82) had a plan for the future where Germany was to build out a fiber optic grid, which the subsequent Chancellor Kohl scrapped because did not like the influence of public TV services and wanted copper for cable TV to counter it[2]. [1] https://en.wikipedia.org/wiki/Ségolène_Royal https://en.wikipedia.org/wiki/Ségolène_Royal [2] https://netzpolitik.org/2018/danke-helmut-kohl-kabelfernsehen-statt-glasfaserausbau/ https://netzpolitik.org/2018/danke-helmut-kohl-kabelfernsehe...
  - ralph84 4y ago
    > Does anyone here have historical knowledge of Europe's glory days? You mean the Renaissance? Since then it's been 400 years of brain drain to the US.
    - sdze 4y ago
      You mean the US has competitive advantages because their products don't contain social costs like the ones from Europe?
      - inglor_cz 4y ago
        I think it is simpler than that. The US gained a lot of highly qualified immigration around WWII, when Europe tore itself into shreds. Poles, Italians, Russians, Germans, you name it. And it is hard to disrupt the advantage of places like California ever since. Once you have top universities and top corporations somewhere, individuals will flock to them instead of trying to create competing hubs elsewhere. Plus the dominance of the English language all but guarantees that English-speaking countries will be the net benefactors of this global movement. For all their advantages, Germany, Japan et al. still struggle with their parochiality when attracting foreign talent, while the US can do this really, really well. Take the entire roster of top IT people in the US and make a checkmark next to every immigrant or a child of immigrants. Similar lists in Munich, Paris, Tokyo etc. would look very different. Most European countries struggle with the fact that recent immigrants tend to be overrepresented in prisons.
locallost 4y ago
Thanks. That might be true, but it's not what I meant. Generally, the view is that most of the cost of a nuclear plant is paid upfront, the fuel does not cost much. If that view is correct, you basically need to run them all the time to make it even remotely economical. These unplanned downtimes are a killer.
marsokod 4y ago
The situation with Arenh is even worse this year. The government reviewed it in September 2021 (voted in August this year), increasing the quantity of energy that could be bought through Arenh each year. But this increase happened after most long term contracts were already bought so the extra deliveries they had to do in 2022 are not only a cut on their profit, they are also a massive loss as they have to buy this energy on short term markets which are multiple fold higher than the Arenh price point.
jylam 4y ago
> several nuclear reactors were taken down for a scheduled maintenance To add to everything you said, the Covid crisis also impacted maintenance, delaying repairs by about a year (source: I've got surprisingly many friends/colleagues coming from the CEA, the French Atomic Commission) Also, EDF lost a lot of knowledge and manpower during past decades, (most? at least many of) people working on nuclear plants are now sub-contractors, that impacted stability.
- venj 4y ago
  > To add to everything you said, the Covid crisis also impacted maintenance, delaying repairs by about a year You’re absolutely right ! I forgot to mention that

by venj 4y ago

xyzzyz 4y ago

Don’t even bother explaining that it is a result of an explicit political decision aiming to force the nuclear power industry to subsidize the renewables from its profits. In the end, regardless of your efforts, people will use the losses the nuclear incurs to subsidize renewables as a proof that nuclear is uneconomical, and that renewables beat it handily and are the way to go.

threeseed 4y ago
> people will use the losses the nuclear incurs to subsidize renewables as a proof that nuclear is uneconomical, and that renewables beat it handily There is already plenty of proof around the world that renewables are cheaper than nuclear.
- mensetmanusman 4y ago
  Not if you calculate in the cost of wanting to have a nuclear weapons and submarine fleet…
- Krssst 4y ago
  Maybe cheaper as of today if we don't account for storage, but since buulding renewables use far more materials than nuclear, would fossil fuels which ensured cheap production and transport become lacking, or base materials extraction not being able to follow a rising demand, I am not sure it would still be the case.
  - TheOtherHobbes 4y ago
    If nuclear used fewer raw materials nuke plants wouldn't be huge - huge - capital projects, wouldn't take years to come online, and wouldn't have huge cleanup costs. If the money spent on nukes had been spent on renewables and on developing storage we wouldn't have these problems. This was predictable decades ago. The reality is that nukes are a political solution to a political problem. It's nice that they sometimes generate energy for a while, but there is no sense in which they've ever been a rational economic choice.
    - mathiasgredal 4y ago
      Nuclear uses roughly an order of magnitude fewer ressources than wind, without factoring in storage: https://imgur.com/a/Kc2h21O https://imgur.com/a/Kc2h21O. Source: https://www.energy.gov/sites/prod/files/2017/03/f34/quadrennial-technology-review-2015_1.pdf https://www.energy.gov/sites/prod/files/2017/03/f34/quadrenn... (page 390)
t0bia_s 4y ago
Probably not, when Europeans realize, that solar pannels manufacturing is dependent on China.
rjzzleep 4y ago
Wonder how much of this is related to the fact that France's energy minister have been MBA and political science graduates for quite some time. The previous one was Hollande's partner, so it's just another kind of nepotism[1]. Macron selling off France's nuclear infrastructure probably doesn't help either. Does anyone here have historical knowledge of Europe's glory days? Were there more actual scientists and engineers in key positions in Government in the 60s and 70s? For example in Germany Helmut Schmidt(74-82) had a plan for the future where Germany was to build out a fiber optic grid, which the subsequent Chancellor Kohl scrapped because did not like the influence of public TV services and wanted copper for cable TV to counter it[2]. [1] https://en.wikipedia.org/wiki/Ségolène_Royal https://en.wikipedia.org/wiki/Ségolène_Royal [2] https://netzpolitik.org/2018/danke-helmut-kohl-kabelfernsehen-statt-glasfaserausbau/ https://netzpolitik.org/2018/danke-helmut-kohl-kabelfernsehe...
- ralph84 4y ago
  > Does anyone here have historical knowledge of Europe's glory days? You mean the Renaissance? Since then it's been 400 years of brain drain to the US.
  - sdze 4y ago
    You mean the US has competitive advantages because their products don't contain social costs like the ones from Europe?
    - inglor_cz 4y ago
      I think it is simpler than that. The US gained a lot of highly qualified immigration around WWII, when Europe tore itself into shreds. Poles, Italians, Russians, Germans, you name it. And it is hard to disrupt the advantage of places like California ever since. Once you have top universities and top corporations somewhere, individuals will flock to them instead of trying to create competing hubs elsewhere. Plus the dominance of the English language all but guarantees that English-speaking countries will be the net benefactors of this global movement. For all their advantages, Germany, Japan et al. still struggle with their parochiality when attracting foreign talent, while the US can do this really, really well. Take the entire roster of top IT people in the US and make a checkmark next to every immigrant or a child of immigrants. Similar lists in Munich, Paris, Tokyo etc. would look very different. Most European countries struggle with the fact that recent immigrants tend to be overrepresented in prisons.

locallost 4y ago

Thanks. That might be true, but it's not what I meant. Generally, the view is that most of the cost of a nuclear plant is paid upfront, the fuel does not cost much. If that view is correct, you basically need to run them all the time to make it even remotely economical. These unplanned downtimes are a killer.

marsokod 4y ago

The situation with Arenh is even worse this year. The government reviewed it in September 2021 (voted in August this year), increasing the quantity of energy that could be bought through Arenh each year. But this increase happened after most long term contracts were already bought so the extra deliveries they had to do in 2022 are not only a cut on their profit, they are also a massive loss as they have to buy this energy on short term markets which are multiple fold higher than the Arenh price point.

jylam 4y ago

> several nuclear reactors were taken down for a scheduled maintenance To add to everything you said, the Covid crisis also impacted maintenance, delaying repairs by about a year (source: I've got surprisingly many friends/colleagues coming from the CEA, the French Atomic Commission) Also, EDF lost a lot of knowledge and manpower during past decades, (most? at least many of) people working on nuclear plants are now sub-contractors, that impacted stability.

venj 4y ago
> To add to everything you said, the Covid crisis also impacted maintenance, delaying repairs by about a year You’re absolutely right ! I forgot to mention that