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August 19, 2008

Can the French be right from time to time?

This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Louis Buchman, PartnerLouis Buchman
Partner, FIELD FISHER WATERHOUSE
Implications: Reliance on nuclear-produced electricity is a strategic decision reached decades ago. This decision stirred surprisingly little opposition domestically. The validity of the decision is upheld in tems of CO² credits.

Analysis: When De Gaulle was about to release control of the Algerian oil fields to the Algerian insurgency in the early '60s, France looked for an alternative to achieve energy independence and found it in a by-product of its military research for developing an independent nuclear submarine force, i.e. nuclear-powered steam turbines. The military was also interested in operational safety procedures and issues, including human health monitoring. This wealth of knowledge was passed on to the then stated-owned electricity utility with the brief to operate a large number of nuclear-powered plants, thus decreasing France's dependency on Middle Eastern oil imports. The feeling at the time was that coal-fueled plants were fast becoming a thing of the past and that hydro-electric plants had already been built wherever they could.
The windfall of the decision is that France is alone in all major powers to rely for 78% of its electicity consumption on nuclear energy, and has gained unique experience along the way on disposing of or reprocessing spent nuclear fuel.
The greens have historically been a minor and fairly recent phenomenon in French politics and despite many efforts have never succeeded in mobilising the general public against nuclear energy. The government has been able to demonstrate the savings induced by the all-out reliance on nuclear-powered electricty plants and there have been no Three-mile Island incidents or Chernobyl accidents to turn the public mood against that strategic choice.
Today, with public anxiety high about climate change, global warming and CO² releases in the atmosphere, especially by burning fossil fuels, Nuclear energy appears as the cleanest solution of all available today, as long as other alternatives are not commercially viable.
It remains to be seen whether the third generation of French nuclear power plants will be operationally successful (the first one to roll out should be in Finland) and whether the French shall be able to dismantle their old plants (plus some outside France) to replace them with modern ones, at an acceptable cost. Nevertheless, the French expertise is second to none and is currently in high demand internationally. As a young lawyer in the mid '70s, I was involved in the joint R&D agreement negotiation between EDF, Framatome and Westinghouse which paved the way to today's reality, and with the benefit of hindsight, I can say without hesitation that the few believers of that time in the future of nuclear power have been vindicated in their expectations.

Other Analyses of the Same Source Article:
EDF sees the future of electricity and it is nuclear powered
August 19, 2008, Author: Michael Lynch, Consultant, Michael E. Lynch

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