EDF, Partners '20 Capex of up to EUR50 Billion on New Nuclear

December 4, 2008
Dow Jones & Company, Inc.
French utility Electricite de France SA (1024251.FR) Thursday announced higher costs for a nuclear reactor it is building in France and said it expects to spend between EUR40 billion and EUR50 billion with its partners by 2020 to build reactors around the world.

A company spokesman also confirmed a separate EUR35 billion
investment plan for 2008-2010 given previously by the company, including some
overlap with the new figure, although he didn't say by how much.

The net financing requirements for EDF for new-build nuclear
facilities through to 2020 should be between EUR12 billion and EUR20
billion, EDF said, noting that it expects to invest with partners in
projects in France, China, the U.S. and possibly the U.K.

The company's initial estimate for financing its new nuclear
ambitions is EUR1 billion per year over the next three years, then EUR1.5
billion annually from 2012 to 2019, according to a presentation posted on
its Web site to accompany an investor day Thursday.

EDF, which Wednesday unveiled a new attempt to thwart U.S.
billionaire Warren Buffet's planned takeover of its American joint-venture 
partner for building new reactors, Constellation Energy Group Inc. (CEG),
published Thursday a commissioning timetable for new reactors including a
first U.S. reactor by 2016 or as early as end-2015. The company has previously
given a target date of 2015 for the project.
The first EDF reactor in China should be ready in 2013 and the
first one in the U.K. is expected to be ready in 2017, EDF said, confirming
previous guidance.

The reactors EDF plans to build are the Evolutionary Power
Reactor, or EPR, designed by French nuclear services group Areva (CEI.FR).
State-controlled EDF is building the first such unit on the northern
coast of France.

That plant, at Flamanville, will be connected to the French
power grid in 2012, EDF confirmed.

But the EPR there, already hit by delays, will cost EUR4
billion in 2008 euros, over 20% above the EUR3.3 billion estimate EDF gave in
2005.

The new figure takes account of increased costs and "the impact
of technical and regulatory evolutions," EDF said. The new total cost
of the electricity to be generated there is EUR54 per megawatt hour, the
company said. (54 Euros = 68.85 U.S. dollars)
While a second EPR reactor in France would face "the likely
very high increase in component prices," the "initial benefits of a series
effect" may help, EDF said. The French government has said it wants a second
EPR, but hasn't yet awarded the project to EDF.

In China, however, where EDF in August entered an agreement to
build and operate a pair of nuclear reactors in a joint venture with China
Guangdong Nuclear Power Holding Company, EDF sees lower costs.

"China benefits from a very favorable cost environment compared
to European EPRs," EDF said.

The estimated cost of building an EPR in the U.S. is "close to
the costs presented for Europe," the company said.

EDF also stuck to its guns on improving the performance of its
existing French nuclear fleet of 58 reactors, confirming a target of
85% availability by 2011. The availability rate in 2008 should come
close to the 80.2% notched up in 2007, EDF said.

Optimizing planned outages and improvements to the performance of
equipment are part of the plan to improve performance, EDF said.

-By Adam Mitchell, Dow Jones Newswires; +33 1 40171756;
adam.mitchell@
dowjones.com