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French early plant closure and nuclear cutbacks

September 30th, 2013 by François Lévêque, Ecole des mines de Paris

Unlike Germany, France has not decided to phase out nuclear power. But it plans to close the Fessenheim nuclear power plant, in Alsace, ahead of schedule. It has also made a commitment to reduce this technology’s share in its future energy mix. Underpinning these decisions we find the same factors as in Germany: a party built around combating nuclear power; a more acute perception of nuclear risk in the aftermath of the Fukushima-Daiichi disaster; electoral competition; and political alliances which make allowance for risks as perceived by the general public, not as calculated by experts. Just as in Germany we shall see that decisions on targets and the exit schedule have been based mainly on approximation, without paying much attention to economic factors.

The Fessenheim plant, located close to Germany and Switzerland – west of Freiburg, north of Basel – has been a bone of contention ever since it was built. Its two reactors were connected to the grid in April and October 1977. Due to its position it is subject to specific safety measures. The seismic risk, though low, is higher than the average due to the proximity of a fault line in the Rhine plain. The plant must also be able to withstand flooding, in the event of a break in the dyke on the Grand Canal d’Alsace. Lastly it is built on top of a large aquifer; contamination of this source of freshwater would be a major disaster. In July 2011 France’s Autorité de Sûreté Nucléaire reported favourably on plans for Fessenheim’s number one reactor to continue operating for a further 10 years. The decision was conditional on work estimated at several tens of millions of euros being carried out, most importantly measures to consolidate the concrete slab below the reactor in order to limit the risk of polluting the aquifer. The second, similar reactor was also qualified for an extension in April 2013, subject to comparable requirements for improved safety. In short, the regulator concluded that, subject to the prescribed work being carried out, in compliance with the law, the risks would be ‘adequately’ limited.

Does the French President have a different opinion? Opening an environmental conference on 14 September 2012 (1), Mr Hollande announced that the Fessenheim plant would close in 2016. Justifying this decision, he cited its age – it is indeed France’s oldest nuclear power plant – and position – in a seismically active area, subject to flooding (2). At first sight, there is little one can say: the democratically elected government supervises the independent regulator in the exercise of its mission. The former is empowered to intervene if it considers that safety targets are not being reached, or because the regulator has wrongly interpreted or opted not to apply the necessary measures. There is nothing surprising about policy-makers exercising their power over safety on national territory and setting stricter safety requirements to make allowance, for example, for new data.

Unfortunately this explanation does not add up.

Firstly, however counter-intuitive this may seem, age is not a very useful criterion for determining how dangerous reactors are. Think for a second and you will soon see why. Contrary forces compensate for the dual effect of wear and technological obsolescence on the safety of old reactors. Due to their age, they are the focus of greater attention on the part of operators and safety authorities. Many thorough inspections are carried out. In France, for example, the 30-year inspection, prior to a possible extension of its operating life, involves a complete overhaul. Moreover, the older a reactor is the more new parts and equipment it boasts, for instance the new steam generators EDF has fitted to its oldest reactors. Above all the regime implemented by the safety authority is not a two-tier process, with lower requirements for old reactors and much higher standards demanded of their more recent fellows. All the reactors, young and old, are subject to the same rules, the same level of safety with regard to maintenance and operation. It is consequently misleading to assert categorically that the oldest reactors are not as safe (see my previous post on the age of NPPs).

Secondly, the President’s decision is not endorsed by any new study or review of existing data by his advisors, the government, the administration or even an ad hoc group of experts. No technical input on the risks entailed by reactors informed the choice made by Mr Hollande. He was no better informed as a presidential candidate, when retiring Fessenheim featured among his campaign commitments. In fact closure of the plant is entirely due to a political compromise. The French Socialist party (PS) is a long-standing ally of the Green party (EELV), which has opposed nuclear power since its inception. Six months before the presidential election in 2012 an agreement was signed by the two parties. It included Fessenheim’s immediate closure and a cut in nuclear power’s share of the energy mix, bringing it down to 50% by 2025. At the same time agreement was reached in preparation for the parliamentary election, following the presidential poll. It allocated about 60 constituencies to the Greens with no opposing Socialist candidate in the first round, in order to strengthen their local powerbase. Agreement on their political platform also opened the way for Green support for the Socialist candidate in the second round of the presidential contest. On the campaign trail, a few months later, Hollande endorsed the target of a 50% nuclear share in the energy mix. But he only made a firm commitment to close one nuclear power plant – Fessenheim – during his first term of office. So his statement in the environmental conference of September 2012 merely confirmed an earlier decision.

Clearly a concern for political and electoral balance prevailed. The PS-EELV agreement is a compromise between a party which wants to keep nuclear power and another which advocates its rapid retirement. At first sight agreement seems impossible. In fact by adding an adjective both sides could accept the accord, for it promised ‘la sortie du tout nucléaire’, an end to [the] all-nuclear [energy mix]. France’s nuclear-electricity fleet currently covers almost all of semi-base and baseload demand, amounting to three-quarters of the nation’s electricity consumption. Of all the large countries which developed nuclear power, France is the only one where this technology is so predominant. Expressed in figures, ending the all-nuclear energy mix means halving the volume of electricity generated by nuclear power plants. But cutting back its share of the mix from 75% to 50% by 2025 is little more than a game with round numbers which are easy to remember and communicate. No technical factors underpinned this choice. The 2025 deadline simply echoes the 25% difference between three-quarters and a half (3)!

In terms of electoral balance Hollande seems to have made the right choice, winning the Socialist primary and then the presidential election.

Let us recall the median voter model, which posits that in order to be elected a candidate must guess the preference of this hypothetical voter. According to this model, the entire electorate is spread along a straight line of finite length, with at one end the person most hostile to nuclear power, who advocates the immediate shutdown of all reactors, and at the other the person most in favour of nuclear power, who would endorse the construction of dozens of new reactors. Moving in from the two extremities, towards the median voter – leaving the same number of people on either side – the views will become increasingly moderate. To be elected, the candidate must determine the median voter’s preferences, in order to target that person and gain his or her support. If that can be achieved the candidate takes half the poll plus one vote, thus winning a majority. (Obviously an election is much more complex, with voters expressing a view on a large number of different topics such as living standards, jobs and education. Furthermore there are alliances between parties specializing in various segments of the electorate. But this simple model taken from the theory of political marketing is sufficient for a basic understanding.) If nuclear power ranks as a key issue and there has been a shift in public opinion, following a nuclear accident for instance, the median voter will view this technology less favourably. Unless the candidate changes his or her platform, votes will be lost with the risk of election defeat.

Countering his main adversary in the primary, Martine Aubry, Hollande refused to support completely phasing out nuclear power, even in the long term. This stance no doubt lost him fewer Green supporters than their Socialist fellows, the latter taking a much more moderate view of the role of nuclear power. Subsequently, in the presidential campaign, he came up against Nicolas Sarkozy who was in favour of an “almost all” nuclear energy mix and criticised plans to close Fessenheim. Here again Hollande was probably closer to the preferences of the median voter.

So, if any calculations preceded the decision to close Fessenheim, they focused on vote projections, not nuclear safety.

Nor did the calculations focus on projected costs. Debate on how to assess the economic cost of closing Fessenheim only started once the decision had been reiterated (4). Newspapers have stated that several billions of euros will go up in smoke (5). For the utility, the plant’s early retirement entails particularly damaging asset destruction: large components, such as the steam generators, were recently replaced. Moreover, as we mentioned above, ASN demanded additional work costing several tens of millions of euros as a condition for issuing a licence for another 10 years’ operation. All these investments may be considered a dead loss and EDF would demand compensation. The fact that the company is publicly owned makes no difference. Private minority shareholders will likely not allow themselves to be cheated. In addition, Swiss and German utilities hold special production rights on almost a third of output from the two reactors. They too will expect compensation, which would help EDF press its case. In terms of the general interest early retirement of Fessenheim is a bad solution. It entails a microeconomic loss which depends, as we saw previously with the German plants, on a whole series of assumptions, such as electricity prices in the future, the cost of alternative resources, investment in further refurbishment, the level of the load factor and the ‘normal’ operating life of nuclear power plants. This loss could amount to several billions or even tens of billions (6).

I should like to make it clear that I see no problem with policy-makers opting to retire nuclear power plants, even if their motives are exclusively electoral or driven by a political alliance. That is how democracy works. My concern is that at no point was the debate informed, documented or debated in technical and economic terms. Decisions were taken on the early retirement of reactors, despite their having received a clean bill of health from the safety authority and with total disregard for the consequences, other than shifts in voting patterns and the balance within and between political parties. It is quite possible that making allowance for these technical and economical factors would not have made any difference to the final outcome, but at least the political decision would have been taken with full knowledge of the facts.

François Lévêque, Professor of economics, Mines ParisTech

(1) The nuclear power plant at Fessenheim, which is the oldest in our fleet, will be closed at the end of 2016,’ speech by the French President at the opening of the Environmental Conference

(2) In the course of a television debate, prior to the second round of the presidential election, between François Hollande and the incumbent Nicolas Sarkozy, the former said: ‘People ask: “Why [close] Fessenheim?” [I answer] it is the oldest one in France. It is in a seismically active area, beside the Canal d’Alsace. There is considerable pressure, from all sides, to have it closed’. Full transcription of the debate, Le Monde, 3 May 2012.

(3) With some ad hoc hypotheses the 50% share approximately corresponds with the phasing out of all NPPs at the age of 40 years.

(4) The lack of anything other than political and communication considerations in the choice of a 25% cut by 2025 is also apparent in the possibility of this slogan making the wrong impression on advocates of nuclear exit. With sustained growth in domestric demand, no change in foreign trade and a mediocre availability load factor, retiring reactors before the age of 40 would make it necessary to build several new EPRs in order to attain the requisite 50%. See, for example: 50% d’électricité nucléaire implique la construction d’au moins 13 EPR, at http://rebellyon.info/50-d-electricite-nucleaire-en-2025.html

(5) See for instance, Le Journal du Dimanche which has indicated in its 16 september 2012 issue that the Fessenheim’s closure will cost 2 billions of Euros and 6 months latter has advanced in its headlines “5 to 8 billions of euros to close Fessenheim”.

(6) See for instance the Hervé Mariton’s report or AgoraVox.fr.

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One Response to “French early plant closure and nuclear cutbacks”

  1. Bas Says:

    Probably the near border of Germany has something to do with it too.
    That implies that Fesselheim feels more competition from the German wholesale market
    And wholesale prices at the German market are very low (~$10-50/MWh), probably going down further due to expansion of renewable.

    So economic argument may have played quite a role not to invest in the necessary security upgrade, but to choose for closing.
    So it seems French government made the right decision.

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