French Utility Underestimated Nuclear Waste Storage Cost (January 2016)

Electricite de France SA, the operator of 58 atomic reactors in France, dropped to a record in Paris trading after newspaper Les Echos said the utility may have underestimated the cost of storing its most radioactive waste.

EDF fell as much as 7.3 percent to 11.59 euros on Tuesday, the lowest since the stock began trading in the French capital in 2005. The shares were down 3.5 percent at 1:15 p.m. local time.

France is seeking to store long-life radioactive waste from EDF’s reactors, as well as from Areva SA and atomic-research organization CEA, at a site near Bure, which straddles the Meuse and Haute-Marne regions. Andra, the agency that manages nuclear waste, has put the cost of building and operating a deep storage facility at about 30 billion euros ($32.6 billion), Les Echos reported, citing people it didn’t identify. EDF, Areva and the CEA last year estimated the bill at about 20 billion euros.

“This report is clearly negative for all nuclear operators, and most specifically for EDF and Areva, but the risks of project-cost revaluation is not new,” Xavier Caroen, an analyst at Bryan Garnier & Co., said in a research note.

Andra, EDF and Areva released a joint statement Monday, saying “the development and construction of the storage will be progressive over the entire operating lifespan, and will also include optimizations and innovations compared to the draft project, some of which are already identified.”

EDF, Areva and the CEA are due to fund the storage facility using assets placed in dedicated funds. Construction of the first phase is scheduled for around 2021.

Bloomberg Business, January 12, 2016 — 7:31 AM EST, as posted at http://www.bloomberg.com/news/articles/2016-01-12/edf-drops-on-report-it-underestimated-nuclear-waste-storage-cost

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