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. The group holds a broad portfolio of mines in operation (Canada, Kazakhstan and Niger), as well as projects under development in Africa. The Mining Business 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 to come. 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 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.

In order 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 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 been in operation 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 hypocracy, 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 Presssurised 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, they 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.

Weapons-Grade Plutonium

Areva NC is 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 weapons-useable material around the globe, a highly risky strategy. To make matters worse Areva was chosen by the US in 2003 to manufacture 4 MOX fuel assemblies using American military plutonium. This involved transporting surplus weapons-grade plutonium from the US to France. The manufacture of fuel pellets and fuel rods was carried out at the Areva NC Cadarache plant in autumn 2004, prior to the fuel assembly operations, carried out in 2005 at the Melox plant. The four manufactured assemblies were then transported back to the US where they were inserted into the Catawba nuclear power station, owned Duke Power, in June 2005.

Logistics

Areva NC’s Logistics division carries out the packaging and transport of nuclear materials. Areva were founder members of the World Nuclear Transport Institute. Areva NC also owns 12.5% of Pacific Nuclear Transport Ltd (PNTL), which operates as a subsidiary of British Nuclear Group. PNTL operates a fleet of three ships for transporting nuclear material such as MOX and vitrified high-level radioactive waste between Europe and Japan.

People

• Anne Lauvergeon | Euan Baird | Spencer Abraham | Armand Laferrère

Main 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 recently extended its bid to build four EPR units until the end of 2006. Areva disputed reports in the French media at the end of October 2006 that it had abandoned hope of being chosen over Westinghouse to supply four third-generation PWRs for construction at Sanmen and Yangjiang, however it subsequently lost the bid.

In February 2007, however, Areva admitted it was in "advanced discussions" with the China Guangdong Nuclear Power Corporation (CGNPC), its Chinese partner, on the sale of two third generation nuclear reactors. The French press reported that the deal between Areva and CGNPC called for the establishment of a global partnership that would include the supply of uranium.

CGNPC chose Areva's EPR design for its Taishan nuclear power plant in China, and the two companies have founded an engineering joint venture in China.

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

Problems With Quality Control

Olkiluoto-3 is the world’s only one of Areva’s EPR reactor design which is currently under construction, although another one is planed at Flamanville in Northern France. Areva has admitted that the project is now a year behind schedule, only one year after the start of construction, and is now not expected to come on stream until 2010. Philippe Knoche was appointed to manage the construction project in October 2006 having previously been manager of the reprocessing plant at La Hague. On top of this, the Finnish regulator has admitted major problems in quality control, raising safety concerns.

"Incapable of Delivering Its Promises"

Areva announced a massive loss in their profits for the first half of 2006 with income from nuclear operations falling from 373 million Euros to 73 million Euros, due to the contract for the Finnish reactor. Nuclear opponents claim that the Finish reactor illustrates that “nuclear power is incapable of delivering its promises to the energy market. It is however the champion in sucking up vast financial resources, which would be better used if invested in renewable energy and energy efficiency".

Analysts have speculated that Areva's financial trials in Finland are not over and that the Company could lose over Eur1 billion in Finland because it has botched negotiation of the contract.

On 10th October 2006 the Finnish Trade and Industry Ministry granted Areva NC a uranium prospecting license for Finland's North Karelia region. However, property owners in the region have threatened "years of legal battles".

Asia

Areva has now teamed up with Mitsubishi Heavy Industries (MHI) Ltd to jointly develop another third generation 1,000 megawatt nuclear power plant and other new types of reactors. The two companies say they are expected strong demand for the mid-sized power plant in regions like Southeast Asia and Eastern Europe.

The companies may also cooperate in procurement, services, the fuel cycle and other fields. MHI Japan's largest machinery maker, lost out to Toshiba to buy U.S. nuclear plant maker Westinghouse, which was recently sold by British Nuclear Fuels Ltd (BNFL).

United States

Areva is the largest nuclear energy vendor in America with 5,000 employees at 40 locations across the country. By forming various joint enterprises and partnerships, the mainly French government-owned company, has become a major force in the US nuclear industry.

Pioneering a New Path

It has teamed up with Constellation Energy – one of America’s largest utilities with 12,000 MW of generating capacity – to form UniStar Nuclear which will “pioneer a new path towards making a new fleet of advanced design nuclear power plants a reality” – in other words, build EPR reactors in the US. UniStar plans to design, license, develop, construct and deploy at least 4 U.S. EPRs in North America.

In the US the EPR is known as the Evolutionary Power Reactor, and Areva NP said at the beginning of 2006 that it was ready to ask the Nuclear Regulatory Commission to proceed to the second phase of a pre-application review of the design with a view to submitting a design certification application in December 2007.

Expand Nuclear Power Globally

Together with Washington Group International and BWX Technologies Inc., Areva has submitted an Expression of Interest (EOI) to the U.S. Department of Energy (DOE) for both the development and deployment of a Consolidated Fuel Treatment Center (CFTC) and an Advanced Burner Reactor (ABR) - part of the DOE's Global Nuclear Energy Partnership (GNEP) initiative, which aims to expand the use of nuclear power globally.

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.

Re-fitting

Areva NP also carries out various re-fit contracts for nuclear utilities in the US. Recent contracts have included:-

• A contract from Pacific Gas & Electric Company for two replacement reactor vessel heads at the Diablo Canyon Power Plant Units One and Two. [Having already supplied and installed 15 reactor vessel heads in the US].
• A contract to supply two replacement steam generators for Unit 2 of Xcel Energy's Prairie Island Nuclear Generating Plant located in Minnesota and operated by Nuclear Management Company.

Three Mile Island

Areva also has a joint venture with Washington Group International called SGT LLC. This is one of only two firms providing services for large component replacement projects for nuclear power clients in the United States. It has completed or is under contract for steam generator or reactor vessel head replacements at nuclear power plants in Arkansas, California, Florida, Maryland, Minnesota, New York, North Carolina, South Carolina, and Wisconsin. Most recently SGT LLC was selected to provide engineering and construction services for the steam generator replacement at Exelon Corporation's Three Mile Island nuclear power station.

Mox Fuel

Areva is also part of the Duke Cogema Stone and Webster (DCS) consortium which is constructing and plans to operate a MoX fuel fabrication facility under contract with the Department of Energy at DOE's Savannah River Site in South Carolina. On September 27th 2006 DCS submitted an operating license application for the facility to the NRC. The license application review is scheduled to be completed in three years, plus another year for hearings if they are held. DCS is to fabricate MOX fuel for US power reactors using 34 metric tons of former weapons plutonium. The NRC issued a construction authorization for the facility in March 2005.

Increased 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 for the articles 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," argues Michelle Boyd from Public Citizen. "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

• 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.

Japan

Areva NC also owns 60% of Commox – a joint venture created with Belgonucléaire to market MOX fuel, particularly to Japan. During 2006 Areva signed agreements to supply MOX fuel to:-

• The Hamaoka nuclear power plant operated by Chubu.
• The Genkai nuclear power plant operated by Kyushu.

Areva is also cooperating with JNFL to start up the Rokkasho-Mura reprocessing plant. Areva will support JNFL until commercial operations get underway at the facility, scheduled for mid-2007. The two companies have a technology transfer agreement which has involved training around one hundred Japanese people at La Hague and the secondment of around forty French operatives to work on the Rokkasho-Mura site, where they will remain until 2007. There is also a large technical support team at La Hague.

Affiliations

• NIA Programme Management Board in the UK