Areva

This article is part of the Nuclear Spin project of Spinwatch.

Background

The Areva Group was created in September 2001. The French public sector owns 87 per cent of the company, of which the Commissariat à l'Énergie Atomique (CEA) (French Atomic Energy Commission) owns 73.03 per cent. The French State (or Erap) owns 10.17 per cent. Of the 13% not owned by the public sector, 2.42% is owned by the French utility EdF. which is itself 84 per cent owned by the French State.

The Areva Group has a commercial presence in more than 100 countries and manufacturing facilities in 43 countries.

Overview

Areva says it is the only company in the world involved in the full cycle of nuclear power activity, from mining uranium to its enrichment, fuel production, reactor design, plant construction, spent nuclear waste fuel reprocessing, and weapons-useable plutonium or MoX fuel fabrication.

Areva’s opponents, on the other hand would say that the company is a salesman for a highly dangerous and polluting technology. However, its involvement in the plutonium cycle makes it more likely than other nuclear companies to be the direct cause of nuclear weapons proliferation.

Company Structure

The Group's activities are divided into five business groups:

• Mining
• Front End Business Group (conversion and enrichment of uranium and fuel assembly manufacture)
• Reactor and Services (reactor design and servicing)
• Back End (reprocessing and nuclear waste management)
• Renewable Energy.

Areva Mining

Areva is the world’s second largest producer of uranium, with a market share of around 16 per cent in 2010. The mining business group covers exploration, extraction and processing of uranium ore and the reclamation of sites after production has finished. It holds a broad portfolio of operational mines (Canada, Kazakhstan and Niger), as well as projects under development in Africa. The group generated 14 per cent of Areva’s consolidated revenue in 2011.

Generating nuclear energy requires uranium as a fuel, which has to be mined. Uranium mining can have catastrophic effects on nearby communities and the environment for thousands of years. There are few places where these harmful effects are felt more distinctly than Niger, in West Africa. Niger is one of the world’s poorest countries, ranking last in the Human Development Index of the United Nations Development Programme (UNDP). More than 40 per cent of Niger’s children are underweight for their age; water and access to improved water sources is scarce and almost three quarters of the population are illiterate. Areva extracts precious—and deadly uranium, earning billions but leaving a legacy of environmental pollution and health risks for the citizens of Niger.

In November 2009, the environmental organisation Greenpeace – working with the French independent laboratory CRIIRAD and the Nigerien NGO network ROTAB – carried out a brief scientific study of the area, measuring the radioactivity of the water, air and earth around the AREVA mining towns. After Greenpeace published some initial findings, Areva had to take action. Some radioactive spots identified by Greenpeace in one mining village were cleaned up. However, Greenpeace said that this limited remedy does not diminish the need for a comprehensive study, so that all areas can be made safe for the community.

Areva Front End Business Group

The Areva Front End business group combines activities associated with the conversion and enrichment of uranium and with the design and fuel production for nuclear reactors.

Uranium extracted from mines is concentrated in the form of a powder known as yellowcake. This is firstly converted to uranium tetrafluoride (UF4) at the COMURHEX-Malvési plant in Narbonne, France, and then uranium hexafluoride at the COMURHEX plant in Tricastin, France. Both these plants are being upgraded to allow for an increase in production capacity. The new facilities are known as COMURHEX-2.

Most reactors use uranium containing between 3 and 5 per cent uranium-235 as fuel. Natural uranium contains only 0.7 per cent. It is therefore necessary to increase the concentration of uranium-235 to obtain a fuel that can be used in nuclear reactors. This is called enrichment. Areva has used the two industrial processes currently in use globally: gaseous diffusion and ultracentrifuge technology in Georges Besse I plant and Georges Besse II plant, both at Tricastin in southern France. The Georges Besse I plant is now being decommissioned.

The Georges Besse I gaseous diffusion plant was owned by Eurodif, a company that is 60 per cent owned by Areva, as well as 10 per cent owned by Iran. The Georges Besse II ultracentrifuge plant is operated by the Société d’Enrichissement du Tricastin (SET). Areva is the majority owner of SET.

SET’s minority partners include: GDF Suez 5 per cent; the Japanese utility Kansai 2.5 per cent (with Sojitz) ; the South Korean utility Korea Hydro & Nuclear Power Co. Ltd (KHNP) 2.5 per cent and the Japanese utilities Kyushu Electric Power and Tohoku Electric Power per cent.

To allow Areva access to Urenco’s high performance uranium enrichment centrifuge technology, (which is highly sensitive because it could be used to make nuclear weapons) and to meet the European Commission's competition requirements, a new company ETC (Enrichment Technology Company) was set up in 2003 with Urenco and Areva both taking a 50 per cent share. This has allowed Areva to construct the new enrichment plant, Georges Besse II, to replace Eurodif's gaseous diffusion enrichment plant, which has operated on the same site since 1978. The 2003 agreement took effect in July 2006. This meant that Areva and Urenco continue to compete for the sale of enrichment services, but ETC is the sole owner of the ultracentrifuge technology which it makes it available to its customers, including Areva.

This ultracentrifuge technology is the very same, so-called, peaceful nuclear technology, that has been the subject of disagreements between the West and Iran. The Khan network, built up by Abdul Qaadeer Khan – better known as the father of Pakistan’s bomb – was a global nuclear information network and business with access to this supposedly secret uranium enrichment technology. Using a mixture of legal and illegal transactions involving businesses all over the world, the technology was exported to Libya, North Korea and Iran.

The International Atomic Energy Agency (IAEA) has sought to prevent Iran from proceeding with its uranium enrichment programme. In what some argue is Western hypocrisy, and a “do as I say, not as I do” attitude, there have been no complaints from the IAEA about the way Urenco transferred the technology to Areva.

Areva Reactors and Services Group

The Reactors and Services business group combines the nuclear reactor design and construction activities and the products and services activities necessary for the maintenance, operation, modernisation and improvement of power plants. It also includes vessel propulsion nuclear reactor and research reactor activities.

In 2012 there were around 429 reactors around the world, with 59 under construction. Areva describes itself as a world leader in design. It aims to build one third of the world’s new nuclear capacity. Areva says it has supplied 102 operating or under construction Pressurised Water Reactors.

Areva is currently constructing four 1,600MW European Pressurised Water Reactors (EPRs) in Finland (Olkiluoto 3) (see below), France (Flamanville 3) and China (Taishan 1 &2). The Olkiluoto-3 project is now five years behind schedule and the original 3.3 billion projected cost has more or less doubled. Since construction started in Finland in 2005 new defects in design and construction have emerged every year, leading to accusations of a willingness to cut corners under cost pressure as well as a lack of quality control. Rather than learning from the mistakes made in this first EPR project, these appear to have been repeated in France and China.

Flamanville in northern France was supposed to be up and running by 2012, with construction costs of €3.3bn. The plant is now not expected to open until 2016 and cost €6bn. Information on EPR construction in Taishan, China is almost nonexistent. However, documents describing a set of inspections in 2009 and 2010 by Chinese officials identify a set of problems similar to those in Europe ).These included insufficient supervision, insufficient testing of concrete composition, hiring of inexperienced subcontractors, as well as recurring problems with storage and labelling of components.

Originally the EPR was to be developed and marketed by a joint venture set up in 1989 between German reactor builder Siemens and Framatome (which became part of Areva), but Siemens quit the consortium in March 2011 and announced in September 2011 it was to abandon the nuclear sector entirely.

Areva is now working on a smaller 1,100MW PWR reactor jointly with Mitsubishi Heavy Industries of Japan known as the ATMEA reactor. This has yet to find any buyers but both Argentina and Jordan are considering this type of reactor.

Areva’s Back-end Business Group

Areva operates the La Hague reprocessing plant in northern France. Reprocessing involves dissolving spent nuclear waste fuel in nitric acid to separate out plutonium and unused uranium and leaving behind a highly radioactive liquid waste which generates its own heat and has to be constantly cooled. This liquid waste is eventually solidified into glass blocks. After the Sellafield reprocessing plant in Northern England, La Hague discharges the largest amount of liquid radioactive waste into the North East Atlantic. The French courts found Areva guilty of illegally importing and storing Australian and other countries’ nuclear waste at La Hague in 2005.

Areva is also the world’s largest producer of weapons-useable plutonium (MoX) fuel. To do this the company relies mainly on the Melox plant, located on the Marcoule nuclear site, in the Gard region of France. This trade in plutonium fuel involves transporting plutonium around the globe. The plutonium, although not “weapons grade”, could still be used to make nuclear weapons, so this is highly risky.

Forty one reactors worldwide have been loaded with MOX fuel assemblies since the beginning of the 1970s: 36 of these are in Europe (21 in France, 10 in Germany, three in Switzerland and two in Belgium), one is in the United States and four are in Japan. Thus Areva is transporting plutonium that could be used in weapons around the globe. Plutonium can be separated from MoX fuel relatively easily.

Areva’s Logistics division carries out the packaging and transport of nuclear materials. Areva owns 12.5 per cent of Pacific Nuclear Transport Ltd with the rest being owned by International Nuclear Services, a subsidiary of the UK Nuclear Decommissioning Authority and Japanese nuclear companies. Its fleet of nuclear transport ships is managed by Serco Group.

The Back-End Business Group also carries out decommissioning and clean-up work.

Areva’s Renewable Energy Business Group.

AREVA is developing a portfolio of activities based on four renewable energies: wind energy, bioenergy, solar power and hydrogen power, as well as energy storage.

Areva in the UK

Areva is part of Nuclear Management Partners (NMP), a consortium of the American company URS, the British company AMEC and Areva. The NMP consortium is managing and operating the Sellafield site in Cumbria, as well as Capenhurst in Cheshire and the engineering design capability based at Risley in Warrington on behalf of the UK’s Nuclear Decommissioning Authority (NDA). Under the ownership of Nuclear Management Partners, Sellafield Ltd is responsible for delivering decommissioning, reprocessing and nuclear waste management activities on behalf of the NDA at Sellafield and Capenhurst.

Areva has also submitted a proposal to the British government to build a new plutonium MoX fuel fabrication plant at Sellafield. Currently the UK’s stockpile of 100 tonnes of plutonium, which could be used to make nuclear weapons, is stored at Sellafield. The government has been consulting on what to do with it. The preliminary view is that it should be converted to MoX and used as a fuel for reactors despite the nuclear proliferation worries of many. Areva has pointed to its track record of operating the Melox plant in France.

Areva is also part of the UK Nuclear Waste Management Ltd (UKNWM) consortium, along with URS, Studsvik UK and Serco Assurance. This runs LLW Repository Ltd on behalf of the Nuclear Decommissioning Authority (NDA), which manages the national Low Level Waste Repository near Drigg in West Cumbria and oversees the national Low Level Waste programme. UKNWM has held the contract to run LLW Repository Ltd since 1st April 2008. The current contract with the NDA runs until 31st March 2013.

Areva is working with other French nuclear companies too. EDF is hoping to build 4 EPR reactors at Hinkley Point and Sizewell. Consequently Areva and EDF launched a joint application for a Generic Assessment Design (GDA) in the UK, a process to evaluate the design of reactors being considered for construction in the UK.

At the same time, Areva has also been in discussions with other European utilities that are considering building new reactors in the UK, but have yet to decide which reactor type to build. This includes NuGen - a joint venture between GDF Suez, and Iberdrola - which is considering building new reactors at the Moorside site next to Sellafield. NuGen expects to decide in 2015 whether to go ahead or not.

Areva also has been talking to Horizon Nuclear Power, which was originally a joint venture between E.ON and RWE. Although Horizon has yet to agree which reactor-type to deploy, Areva has undertaken studies to support the deployment of two EPR reactors on Horizon’s Wylfa site on the Isle of Anglesey in Wales. Horizon’s German owners, RWE and E.ON, announced in March 2012 that they would abandon their plans to build new nuclear capacity at Wylfa and at Oldbury in Gloucestershire, and put up Horizon Nuclear Power for sale. An Areva spokesman confirmed in July that it would bid for Horizon “with Chinese utilities, probably CGNPC China Guangdong Nuclear Power Corp., and other players.”

Other Countries

Areva operates around the globe including in the following countries.

China

Areva has been seeking nuclear cooperation with the Chinese encompassing the entire nuclear fuel cycle, including reactor construction. It is competing with Westinghouse for Generation III reactor orders. AREVA has been present in China for more than 20 years, and has 30 local offices and production sites. The group employs 3400 people in the country, and has participated in building 11 of China’s 17 nuclear plants.

On 26 November 2007, Areva and the China Guangdong Nuclear Power Company (CGNPC) signed a series of agreements worth an overall €8 billion to build two EPR reactors, supply all necessary equipment and services, and create an engineering joint venture. Excavation started in August 2008 and the first concrete was poured in September 2009.

The two reactors are expected to be commissioned in late 2013 and 2014, respectively. This means Taishan 1 and 2 could actually be the first EPR reactors to begin operation, because Olkiluoto 3 in Finland and Flamanville-3 in France are both behind schedule.

The project is being managed by the Taishan Nuclear Power Joint Venture Company (TNPJVC: a joint venture owned 70% by CGNPC and 30 % by EDF), with technical support provided by local Areva teams.

In June 2012 Areva also teamed up with CGNPC in a potential bid for the UK-based Horizon nuclear project, which was put up for sale in March by German utilities RWE and E.ON in the wake of Germany's decision to phase out all nuclear power after the Fukushima accident. "The Chinese may see Horizon as a way of acquiring a relatively cheap option on developing nuclear capacity and expertise in Europe if the conditions are favourable," said David Stokes, a director at consultancy Timera Energy told Reuters news agency. "The (UK) government is likely to welcome new interest from well capitalised Chinese utilities, particularly given an absence of other obvious strategic bidders."

Finland

In April 2005 construction work began on Olkiluoto-3 in Finland - the first EPR to start construction anywhere in the world. The EPR design is the world’s largest nuclear reactor, and one of the most complex.

According to Greenpeace the complexity of the reactor and the constant pressure to reduce costs have led to systematic cutting of corners and to cover-ups of defects including: substandard concrete quality and quality monitoring; hiring inexperienced and incompetent subcontractors; working without approved blueprints and guidelines; substandard quality of welding work, due to a lack of training and oversight, as well as a lack of mandatory specifications for welding procedures, skipping mandatory quality controls and tests; and deliberately covering up structural defects.

In virtually all cases of quality problems, Areva’s own inspectors have failed to detect violations or have tried to cover them up. As far back as 2006, the Finnish nuclear regulator said that the number of problems was so high that it is possible that not all of them have been detected. Defects left in the final structures can either initiate a nuclear accident, or fail under accident conditions, making matters worse.

In October 2011, after six years of construction, the owner of the Olkiluoto 3 in Finland announced that the project would be five years late. An estimate commissioned by the French parliament put the current cost of Olkiluoto 3 at €6.6 m, €3.6 m more than originally estimated. The investors of the first EPR project in Finland were supposed to be shielded from cost overruns. Regardless, Areva has taken the Finnish investors to court to get them to cover the ballooning costs.

In July 2012 the Areva-Siemens consortium which is building Olkiluoto-3 won a partial judgment for €125 million from Finnish utility Teollisuuden Voima Oyj (TVO) in July 2012. The judgment came from the Court of Arbitration of the International Chamber of Commerce and requires TVO to release €100 million owed to the consortium, but withheld over contract disputes. Areva said the money was withheld “in contravention of contractual provisions.” With accrued interest, TVO has to pay €125 million, plus unspecified legal expenses incurred by the consortium.

TVO now says the reactor won’t be ready to produce electricity in 2014 (it should have opened in 2009). Areva has taken at least €2.7 billion in write-downs on the project. In June 2011 these problems resulted in the dismissal of the long-time CEO of Areva, Anne Lauvergeon.

Areva is also pursuing mining exploration and development programmes in Finland.

United States

EPR Reactors

Areva says it is leading the U.S. nuclear renaissance –investing $250 million in research and development of the U.S. EPR reactor. Almost 5000 US employees work at 34 sites across the country. Areva is number one supplier of nuclear energy products and services in the US; its sales revenue there for 2010 was US $2.2 Billion.

In 2005 Areva launched UniStar Nuclear LLC with US utility Constellation Energy to plan new reactors using the EPR design. In August 2007, EDF , took over the baton from Areva and joined Constellation in forming UniStar Nuclear Energy by acquiring a half-interest in the business. In October 2010 Constellation pulled out of negotiations for a US government loan guarantee to build an EPR at Calvert Cliffs in Maryland because the costs were too high, creating too much risk for the Baltimore-based utility. In November 2010, EDF became the sole owner of UniStar Nuclear Energy after acquiring Constellation's 50 percent interest in the business.

Although Areva and its U.S. consortium partner Bechtel Power Corporation have agreed terms and conditions for an engineering, procurement and construction (EPC) contract for UniStar’s proposed Calvert Cliffs 3 reactor Unistar's application to build Calvert Cliffs still does not meet federal laws on foreign ownership, according to the US Nuclear Regulatory Commission (NRC), because it is still 100% owned by EDF.

Areva's EPR reactor is unlikely to receive design certification by the US NRC before the end of 2014.

Bellefonte Nuclear Plant, Alabama

The construction on Plant Unit 1 of Bellefonte began in 1974, but was halted in 1988 due to decreased demand for electricity and cost overrun issues. The plant was almost complete when work stopped. In 2011, Areva was selected by the Tennessee Valley Authority (TVA) as a key member of the team of contractors helping TVA complete the partially finished unit. But the ultimate cost and timing for Bellefonte 1 will depend on work at another reactor TVA is completing - Watts Bar 2 in Tennessee. TVA doesn’t want to start a second nuclear project until fuel has been loaded at Watts Bar-2. In February 2012, TVA said the Watts Bar 2 project was running over budget and behind schedule.

If the Bellefonte plant is completed, it might be expected to open around 2018, by which time it will be 50 years since construction started. If it runs for 60 years, some of the components will be 110 years old before it shuts down raising some grave concerns.

Refurbishing Reactors

Areva jointly owns SGT LLC (Steam Generating Team), with URS, which provides highly specialised heavy component replacement services to the nuclear industry. URS is a nuclear construction contractor, and Areva supplies engineering and heavy components for nuclear power plants. Since 1984, SGT and its parent companies have performed more than 20 steam generator (SG) or reactor vessel closure head (RVCH) replacement projects in the U.S.

Uranium Enrichment

AREVA is planning to build a uranium enrichment plant - the Eagle Rock Enrichment Facility (EREF), in Bonneville County, Idaho. It will use the same ultracentrifuge technology as the Georges Besse II plant at Tricastin in France (see above). The project is intended to provide US utilities with US based enrichment services.

In December 2011 Areva postponed the $3 billion project because of deep losses and started searching for a partner. By July 2012 Areva still had not announced a partner. If it cannot find an investor, construction of the project will probably be delayed until at least 2014. By then, the company says it will have restored its balance sheet sufficiently to build it independently.

MoX Fuel Fabrication Facility (MFFF)

This project falls under the non-proliferation agreement between the United States and Russia, which agreed to a 34-ton reduction each in surplus weapons grade plutonium. Originally the US decided to pursue two routes – converting plutonium into MOX fuel for use in civilian reactors and immobilizing it as a waste.

In 1999 it was estimated that it would cost the US about $4 billion to dispose of 34 tonnes of its 85-tonne stockpile of weapons-grade pluto¬nium. But Russia, which had also committed to disposing 34 tonnes of its own weapons plutonium, objected to immobilization because it said the plutonium could be made into weapons if it were recovered. This, along with the cost of paying for two different programmes, led the United States to abandon the immobilization track. Instead, it commis¬sioned an Areva-designed MOX plant. The cost of disposing of its 34 tonnes of plutonium has since soared to more than $13 billion, with the value of fuel produced likely to offset costs by only $1 billion to $2 billion.

The facility uses technology-transfer from La Hague and Melox. In 2008, the Department of Energy made an agreement with a joint venture created by the AREVA and SHAW groups for the construction of a MOX fuel production plant.

Friends of the Earth USA argues that this programme must be stopped for two reasons. First, mixed oxide plutonium fuel, called MOX, is more dangerous than conventional nuclear fuel because it can burn hotter and also because it has the potential to cause more cancers in the event of a severe accident resulting in radiation release. Second, there are serious questions about the economic and technical feasibility of the MOX program, especially after a MOX test was prematurely halted in 2008. This means that when the project fails, taxpayers will be stuck with a multibillion dollar bill in return for little or no electricity generation. The MOX plant at the Savannah River Site was only about 41 per cent complete by June 2011 and its $4.9 billion cost was three times the $1.6 billion estimate from 2004. The project is already 9-10 years behind schedule.

Cancelling the MOX plant could save an estimated $2 billion over the next 10 years, plus significant additional operating costs, while reducing the chances that weapons-usable nuclear material could fall into the wrong hands, according to a fact sheet by the Union of Concerned Scientists and Alliance for Nuclear Accountability.

Expand Nuclear Power Globally

Areva is part of the International Nuclear Recycling Alliance (INRA), which includes Mitsubishi Heavy Industries (MHI), Japan Nuclear Fuel Ltd (JNFL), Battelle, BWX Technologies and Washington Group International. In October 2007 INRA signed a contract with the US Department of Energy (DOE) to evaluate closing the nuclear fuel cycle in the U.S., through the development of a nuclear fuel recycling center and an advanced recycling reactor.

The Consolidated Fuel Treatment Center would basically be a reprocessing plant and the Advanced Burner Reactor is intended to consume the products. GNEP is supposed to somehow overcome the proliferation concerns associated with reprocessing and fast reactors by developing, so-called proliferation resistant technology. The proposal is to leave additional fission products mixed with the plutonium separated from the spent nuclear waste fuel. This may have some small proliferation benefits compared with existing technology, but it would still pose a significant risk if deployed on a large scale.

The US Department of Energy announced in June 2009 that it had cancelled the environmental impact statement of the domestic Global Nuclear Energy Partnership programme, effectively halting the programme which has reprocessing as its primary focus. It said it was no longer pursuing domestic commercial reprocessing. However it continued to fund research and development (R&D) on so-called proliferation-resistant fuel cycles and waste management strategies.

The Global Nuclear Energy Partnership has now mutated into the International Framework for Nuclear Energy Cooperation with a new Statement of Mission. It still explores mutually beneficial approaches to ensure the use of nuclear energy for peaceful purposes.

Historical Lobbying Effort

In January 2007, MSNBC.com undertook a series of articles on nuclear power in the US. One article looked at the growing influence of Areva on the US Energy debate. An examination of Senate lobbying disclosure forms showed that Areva used no fewer than eight Washington lobbying firms to push its interests from 1998 through 2005.

In total at least 24 men and women were registered to lobby on Areva's behalf from 1998 through 2005 at a cost of more than $4.5 million, according to Senate records. Among them were former Senators J. Bennett Johnston and Alan Simpson.

The company's lobbying expenses topped $1 million in 2005. "They spent twice as much lobbying in 2005 as in 2004 and the reason for that is because of this interest in starting reprocessing," argued Michelle Boyd from Public Citizen at the time. "They looked across the pond and saw ... tons of spent nuclear fuel and wanted a piece of that action."

Areva employees and its political action committee gave over four times as much to federal candidates in the 2006 election cycle - $116,227 - as they had done in 2004. According to MSNBC.com "Among the beneficiaries of its largesse were lawmakers who were instrumental in the energy bill's passage.

The Revolving Door

Areva’s greatest coup was attracting a troika of Washington’s most influential energy policy players to help with its lobbying effort:

• Spencer Abraham - Former Secretary of State for Energy, now Chairman of Areva, Inc.

• Andrew Lundquist - served as the Executive Director of Cheney's task force on energy. Left the White House in 2002, and served on Areva's US's board for a time afterwards but has since left.

• Alex Flint called a protégé of Congress' nuclear cheerleader, Senator Pete Domenici. Flint has also represented Areva predecessor, Cogema, among other clients. He then worked as Domenici's staff director on the Energy Committee in 2003. In 2006, he took a job as the top lobbyist with the Nuclear Energy Institute, which counts Areva as a prominent member.

Flint was a member of the Bush-Cheney energy transition advisory team along with fellow Areva lobbyist J. Bennet Johnston, Areva lobbyist-to-be William Martin and Areva executive Steve Kadner.

People

• Luc Oursel President and Chief Executive Officer, Chairman of the Executive Board
• Philippe Knoche Chief Operating Officer, Member of the Executive Board
• Pierre Aubouin Chief Financial Officer, Member of the Executive Board
• Olivier Wantz Senior Executive Vice President, Mining Business Group, Member of the Executive Board
• Jean-Cyril Spinetta Chairman of the Supervisory Board 2011-2016

Affiliations

• NIA Programme Management Board in the UK