September 18, 2019 / 9:11 AM / 2 months ago

EDF says no need to close nuclear reactors over welding problems

PARIS (Reuters) - French utility EDF said on Wednesday there was no need to halt any of its nuclear reactors for now following the discovery of problems with weldings in their steam generators last week.

FILE PHOTO: An EDF worker is seen on the construction site of the third-generation European Pressurised Water nuclear reactor (EPR) in Flamanville, France, November 16, 2016. REUTERS/Benoit Tessier/File Photo

State-controlled EDF said in a statement it had identified problems with 16 generators installed in six operating reactors in plants in France. It also discovered issues with components not yet in service, notably at the nuclear plant it is building in Flamanville, northern France.

EDF, whose shares rose nearly 4% in early trade, said that at the current stage of investigations the issues that had been identified do not adversely affect the components’ fitness for service and do not require immediate action.

A spokeswoman for French nuclear regulator ASN said it had no comment on EDF’s statement and said it was still investigating the weldings problem. She did not say when ASN might rule on the matter.

“There is still the risk that the French nuclear safety authority will decide that unplanned outages will be required for repairs, but today’s announcement implies that this would only be the case for just over 10% of EDF’s operating reactors,” Barclays said in a note.

Regis Clement, deputy head of EDF’s nuclear fleet, told reporters on a call that not a single component in EDF’s nuclear reactors was at risk due to the welding problems.

“The availability of our reactors in the weeks and months ahead is not at risk. We are confident for the winter ahead,” he said.

He added that EDF was investigating the issue, but not planning repairs. He declined to comment on any further impact on the already long-delayed Flamanville construction schedule.

France is a major power exporter and EDF’s stable nuclear output plays a key role in balancing electricity flows in Europe, providing backup for intermittent solar and wind power.

In the autumn of 2016, the regulator, ASN, ordered EDF to close up to a third of its reactors for weeks for safety checks and repairs following problems with Framatome-made components, which caused power prices to spike 60 percent in two months.

FRAMATOME INSPECTION

On Wednesday, the ASN spokeswoman also said the regulator had asked EDF for additional information and was set to carry out an inspection at the Saint-Marcel plant in western France of EDF’s reactor manufacturing unit Framatome.

A London-based trader said the market remained cautious while it waited for a final ASN decision.

The problems were identified in reactors no. 3 and 4 at Blayais, reactor no. 3 at Bugey, reactor no. 2 at Fessenheim, reactor no. 4 at Dampierre-en-Burly and reactor no. 2 at Paluel, EDF said.

The defects in components not yet in service were found in the four steam generators and the pressurizer at the Flamanville 3 EPR, as well as three new steam generators destined for those in reactor units no. 5 and 6 at Gravelines, it added.

EDF’s share price have recovered most of the losses incurred since EDF first announced the weldings problems on Sept. 10, when its shares dropped about 7 percent.

French forward power prices were broadly lower in early trade as worries about potential reactor closures eased. The front-month contract lost 5% to 47 euros a megawatt hour (MWh). The year-ahead baseload contract was down 1.8% at 52.50 euros/MWh.

British and Dutch gas prices for October delivery fell around 5% after EDF’s comments. Prices jumped last week when the problems first emerged as demand for gas, which can be used in power generation, rose on concern about nuclear shutdowns.

The British month-ahead gas price < TRGBNBPMc1>, which spiked 20% last week, fell 5.7% to 33.15 pence per therm. The Dutch month-ahead gas price < TRNLTTFMc1>, which jumped 18% last week, fell 5.5% to 12.95 euros per megawatt hour.

Additional reporting by Sarah White in Paris and Sabina Zawadzki in London; Writing by Geert De Clercq; Editing by Richard Lough and David Evans

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