Areva Japan
You might say that France and Japan go together like electron and proton when it comes to nuclear power or, as the industry calls it in these days of climate change concern, “non-CO2 electric power generation”. The two nuclear energy super-powers are committed to fully exploiting the potential of nuclear from “front end” to “back end” – and at the nucleus of this collaboration is France’s Areva Japan.
In the nuclear power business the front-end refers to activities that follow mining uranium: refining it, enriching it and fabricating it into fuel assemblies that can be inserted into a nuclear reactor. The back-end refers to reprocessing the nuclear fuel used in the reactor to reclaim unburned uranium and newly created plutonium, which can then be recycled into new fuel and put back into reactors to generate more power.
For some 40 years Areva (a 92% state-owned concern formed in 2001 with the merger of the French nuclear fuel company Cogema and reactor manufacturer Framatome) has been intimately involved in all aspects of front- and back-end fuel production in Japan. As far back as the 1970s, Japanese nuclear power utilities began shipping their spent fuel to France, to be reprocessed at Areva’s plant in La Hague. (Some of the fuel has also gone to Great Britain, but mostly to France.)
The main back-end activity of Areva has been directed at the Rokkasho reprocessing plant on the northern tip of Honshu. The plant was built almost entirely with French technology and help. It has been completed for several years, tested and is awaiting the first shipments of spent fuel. But operations have been held up by persistent problems in the last stage of the process, which happens to use Japanese technology. Rémy Autebert, president of Areva Japan, says, “We’re ready to help JNFL [Japan Nuclear Fuel, operator of the plant] surmount its difficulties.”
More successful, to date, has been Areva’s participation in Japan’s “pluthermal” programme. This project recovers plutonium from Japanese spent fuel in France, combines it with uranium at Areva’s MELOX plant as “mixed oxide” (MOX) fuel, and ships it back to Japan.
After delays of several years, the programme got underway this year when Kansai Electric Power and Shikoku Electric Power each loaded MOX fuel into one of their reactors.
The MOX programme has proven to be more controversial in Japan than it is in France, with residents near some of the targeted reactors voting not to allow the use of MOX fuel in their plants. “The local people are being very cautious, but we believe that MOX provides no extra risk and that one by one other utilities will follow. At this moment in Japan there is electricity being produced from recycled fuel, which would otherwise be wasted,” Autebert said.
Long-term relationships
Three huge Japanese companies – Toshiba, Hitachi and Mitsubishi Heavy Industries (MHI) – build nuclear power plants, so there is little opportunity for Areva in this field locally. But, for its worldwide reactor construction projects, the French company sources many components from Japanese suppliers. “We have our own facilities, but we like Japanese quality and it always helps to diversify sources,” he said. Areva buys a lot of materials from MHI, which is currently supplying from its plant in Kobe a large component for the reactor that Areva is building in Taishan, China.
Areva also has a long and close relationship with Japan Steel Works (JSW) in Hokkaido, which has a near worldwide monopoly on the forging of very large reactor components. In 2008 Areva signed a long-term contract with JSW, which enabled it to greatly expand its forging capacity. Meanwhile, it has a 50-50 partnership with MHI to develop a new kind of reactor called the ATMEA. It is essentially a smaller version of Areva’s flagship reactor type, the European Pressurized Water Reactor (EPR). While the typical EPR puts out 1,600MW of electricity, the newer model generates about 1,100MW.
Autebert said the new model is aimed at markets – usually countries – that prefer a smaller version, possibly because they are newcomers to nuclear energy. “Some people prefer big cars; others prefer smaller cars,” is how he describes the marketing strategy. The reactor design is complete and marketing has begun. Only a few weeks ago Jordan put the ATMEA on the shortlist for its first nuclear power plant, the other two prospects being models from Canada and Russia.
Anticipating a worldwide expansion of the nuclear power industry, Areva is rapidly enlarging its global operations, investing heavily in uranium mines and building more front-end operations in France, the United States and elsewhere. “We’re spending a lot of money,” Autebert says. Another company might raise new capital from a fresh public offering, but Areva is constrained by its being a state-owned enterprise and thus is not listed on the stock exchange. What to do?
To raise capital, Areva recently sold its worldwide transmission and distribution network, which brought in about €4bn (Toshiba was an unsuccessful bidder). It is selling other assets, too, but is putting a lot of confidence in a recent decision, by the French government, in principle to open Areva to outside, private investment of up to 15% of total equity. Areva expects to invite investments from concerns with which it has had a long-term relationship, and that certainly includes many Japanese companies.