France's EDF flags problems with nuclear welds, shares dive

11/09/2019 08:27 Nuclear

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French utility EDF has discovered problems with the weldings and other components in some of its nuclear reactors, it said on Tuesday, sending its shares down more than 8% as investors worried about potential closures.

EDF said in a statement its reactor building unit Framatome - formerly called Areva - had informed it of “a deviation from technical standards” in manufacturing of certain components on reactors that are currently in operation, notably the weldings on some of the reactors’ steam generators.

 

An EDF spokesman said it was too early to say whether the problems could lead to reactor closures, but added several EDF reactors were affected by welding anomalies and the firm would provide more detail on individual reactors in the coming days.

 

He said not all of France’s 58 reactors were affected as EDF also had other suppliers including Westinghouse and MHI, and that Framatome had not always used the same welding procedure that led to the problems.

 

Nevertheless, EDF’s shares had plunged 8.4% by 1415 GMT, wiping nearly 3 billion euros ($3.3 billion) off its market value, and European power prices surged as investors worried about potential reactor shutdowns.

 

France has the world’s second-largest fleet of nuclear reactors behind the United States and has exported its technology to China, Finland, South Africa and South Korea with Britain also set to use it.

 

Any new reactor closures would directly impact the earnings of EDF, which generates the bulk of its power with its nuclear fleet, which accounts for about three quarters of French electricity generation.

 

Barclays said in a note the new problem markedly increased uncertainty for EDF.

 

“There should be a significant uplift in French and Central European power prices based on likely future French nuclear outages, which could potentially mean EDF having to buy French generation output that it is short at a premium price,” it said.

 

German year-ahead baseload power TRDEBYZ0, the European benchmark, gained 4% to 49.55 euros ($54.50) a megawatt hour, its highest since Aug. 12. British wholesale gas prices also rose, with gas for winter delivery 2019 up 9%.

Source: reuters.com

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