June 21, 2019 / 10:44 AM / 4 months ago

BUZZ - EDF hits 12-month low as Flamanville ruling raises uncertainty

PARIS, June 21 (Reuters) - ** French utility EDF shares were down 3% at midday on Friday after falling 3.4% on Thursday, hitting a 12-month low after regulator ASN ruled on Thursday that EDF would have to proceed with costly repairs of eight key weldings at the nuclear reactor it is building in Flamanville. ** Two-day loss of 5.7 percent amounts to more than two billion euros loss in market capitalisation, which corresponds to some estimates about how much the delay will cost EDF. ** Market faces a period of uncertainty as EDF said it will take several weeks to analyse the impact of the ASN’s decision on the Flamanville EPR schedule and cost. ASN said its ruling would have “serious consequences”. ** Investors unclear about the impact of the ruling on the replacement of the Flamanville reactor vessel lid. Mid-2017, the ASN ruled that Flamanville could start up despite weak spots in the steel of the lid over its reactor vessel, but that the lid would have to be replaced a few years after start-up, latest by 2024. ** ASN said EDF estimates that weldings could be repaired by end 2022. With another year for fuel-loading and testing, commercial start-up could be some time in 2023. No ASN or EDF comment about how this timing will impact the lid repair timing and whether the reactor would start up with the faulty lid or whether the lid repair could be brought forward. ** Press comments about Flamanville debacle highly negative. Le Figaro talks about “industrial catastrophe”, Le Monde says “French nuclear industry in a dead-end”. ** Les Echos estimates that with an annual output of 13 terawatt hours sold at the ARENH price of 42 euros a megawatt hour, EDF loses annual revenue of more than half a billion euros for every year that Flamanville is delayed. ** Negative impact also seen on future of nuclear in France, as French government has said that successful completion of Flamanville was a precondition for a decision in 2021 on building new nuclear plants. ** EDF is working on a new and improved model of the troubled EPR in Flamanville, but does not have another reactor model it could use in France and for export. ** New delay will hit EDF’s export ambitions as the firm hopes to sell EPR reactors in India and Saudi Arabia, as well as two more EPR reactors in Britain. (Reporting by Geert De Clercq Editing by Bate Felix)

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