The French government has postponed its decision on financing six new-generation nuclear reactors, shifting the anticipated approval from December 2024 to early 2025, according to reports by Les Echos on Thursday.
The delay comes amid political uncertainty stemming from this summer’s snap elections and an ongoing budget impasse. The financing proposal under consideration includes a zero-interest loan for Électricité de France (EDF), the state-backed utility leading the project.
This financial mechanism, previously approved by the European Commission and used in the Czech Republic for a similar nuclear initiative, aims to minimize financial risks during construction.
Innovative Loan Structure to Support EDF
Under the proposed arrangement, EDF would benefit from a zero-interest rate throughout the reactor construction phase.
Once the reactors become operational, the loan would transition to a “reasonable” interest rate, reducing the financial strain on the utility. Sources suggest that this approach could significantly cut the project’s estimated €67.4 billion cost.
The government considers this loan option more efficient than alternative financing mechanisms, allowing for quicker implementation while maintaining fiscal oversight.
However, current political dynamics and disputes over public spending have stalled discussions on the financial package.
Ambitious Nuclear Expansion Plans
EDF’s ambitious strategy involves building six new European Pressurised Reactors (EPR2) by 2050, with construction set to begin at the Penly nuclear power plant on France’s Channel coast by 2027.
The utility envisions expanding the program to include up to 14 reactors, reflecting France’s commitment to nuclear power as a cornerstone of its energy transition strategy.
A final decision on EDF’s broader nuclear construction plans is expected in 2026, with preparations already underway for the Penly project. However, EDF’s track record with large-scale reactor construction has raised concerns.
Lessons from Flamanville’s Delays and Cost Overruns
The latest EPR project at Flamanville has become a cautionary tale for EDF and the French government.
Initially estimated to cost €3.3 billion, the project ballooned to €19 billion, almost six times the original budget. Moreover, the reactor faced repeated delays, spanning over a decade from its initial 2012 completion target.
This history of cost overruns and schedule slippages has heightened scrutiny over the feasibility and financial risks of the new reactor program.
Energy and Political Implications
The six reactors represent a significant step in France’s nuclear revitalization efforts as it seeks to maintain its leadership in low-carbon energy production.
Nuclear power accounts for approximately 70% of France’s electricity generation, making it a critical component of the country’s energy policy.
However, the delay in financing approval underscores the broader political challenges facing the project. The recent snap elections have left the government grappling with budget negotiations, complicating its ability to commit to large-scale infrastructure initiatives.
As the government navigates political and fiscal uncertainties, EDF must continue its preparations for the reactor program while addressing public and international concerns over cost efficiency and project management.
A decision on the financing mechanism is now expected early next year, setting the stage for further debate on the role of nuclear power in France’s future energy strategy.
