Marking a considerable shift in strategy, utility EDF says its next-generation nuclear reactors must compete with fossil fuels rather than renewables. Indeed, EDF says it is already helping integrate more renewable energy on the grid by varying its output in its French home market.
In late 2016, EDF announced that in 2030 its new reactors (EPR-NM) must be competitive with the least-cost renewable energy that could be installed on the same site. Now, in the face of rapidly falling prices for wind and solar, the utility is arguing that nuclear and renewables are complementary.
"Our reasoning on new nuclear is much more that it should be in competition with - and therefore cheaper than - fossil-fuel generation, rather than in competition with renewables," declared Xavier Ursat, EDF's executive director in charge of new nuclear projects at a recent company seminar.
EDF aims to achieve a price of EUR70/MWh from its EPR-NM in 2030. In comparison, France's onshore-wind tariff currently stands at EUR72/MWh, and is likely to fall in the forthcoming tenders. The change in strategy also reflects political reality, with France committed to cutting nuclear's share of the electricity mix to 50% in 2025, down from around 75% today. While even energy minister Nicolas Hulot now admits the deadline will not be met, it provides "a strong signal", notes Alexandre Roesch, executive officer of renewable-energy trade association SER. "EDF has no choice any more to fight against renewables," agrees Dario Traum, a senior associate at Bloomberg New Energy Finance (BNEF).
Because nuclear provides such a large share of French electricity, EDF has long had to vary its output to help balance supply and demand. However, with the growth in renewables, this has become more pronounced. Now the utility is emphasising its "flexible nuclear fleet", capable of varying the output of up to 30 reactors at a time by 80% in 30 minutes "in order to integrate the production of renewables in the energy mix", said Dominique Miniere, EDF's executive director in charge of nuclear and fossil production at the seminar.
There is no doubt that France will have a more variable power mix in future. The country is committed to supplying 40% of its electricity from renewables in 2030, up from around 20% today. "The question is what other pieces in the equation can provide in terms of flexibility," Roech says, adding, for example, how much of a role will be played by hydro and various forms of storage.
Traum believes EDF is being a bit optimistic in vaunting its flexibility, arguing that a half-hour ramp-up is not fast enough. "Gas and battery both offer immediate variation, and at values that are a bit higher," he argues. Instead, nuclear offers seasonal flexibility, especially during the extreme winter peaks.
How much this will impact EDF's bottom line is not clear. Up to now, the utility stressed that nuclear was competitive mainly by generating at full power over extended periods as far as possible. "Lower capacity factors are not good ... EDF is clearly banking on a solution regarding carbon prices in the next five-to-ten years," Traum says.
However, EDF is also seeking alternative revenue streams, points out Alexis Gazzo, a partner at Ernst & Young. There are new opportunities to explore in the French capacity market and in providing decentralised energy services. The utility's renewables arm, EDF Energies Novelles, is also expanding at home and internationally.
Meanwhile, nuclear's place in France should be clarified in the multi-annual energy programme (PPE) for 2024-2028, due to be finalised by the end of next year. Feeding into the debate about what the power mix will look like, grid operator RTE has produced a discussion paper outlining various possible scenarios.
First, to meet the 50% commitment in 2025, RTE says 26 nuclear reactors would have to close, to be replaced partly by a rapid ramp-up of renewables to 88GW, including 35GW of wind. However, this would require keeping France's remaining coal-fired plant online and building 11GW of combined-cycle gas plants, thereby doubling the system's CO2 emissions.
The other four scenarios assume France will have no coal-fired output on the system but foresee a significant increase in renewables. Perhaps the most attractive option from the government's point of view is the "Ampere" scenario, which meets the 50% nuclear target in 2030 while almost halving CO2 emissions. This would see 149GW of renewables, including 67GW of wind, and would require a much more flexible electricity system.
Whatever power mix the government finally opts for, "we need clear volumes so that we can have fact-based discussions ... on ways to reduce nuclear power", Roesch says. Not that it will be easy. France has found it "pretty tough to shut down coal-fired plants because of the unions. It will be difficult for nuclear", Gazzo warns.