Pay Baby Pay or the Costly Competition for Nuclear Domination

Hello everyone,

It’s with great pleasure that we are coming back to you for the third part of our three-part dossier on the challenges of nuclear energy for 2025… And beyond (read part one and two here and here)! In this part, we’re going to ask ourselves a question: what kind of firm could be crazy enough to try and take on a business where, to quote someone I can’t very well remember, you can become millionaire very quickly, provided you have a few billion to start with.

Who among you would like to invest fifteen billion dollars on a decade-long project that has a good chance to go off tracks a few times, will most likely go over budget and over delay and leave your company the perfect scapegoat for the opposition to accuse of being the source of all the country’s financial problems?

When you put it like that, it doesn’t sound very enticing, does it? This is the plight of the West’s new build projects. They cost money. A lot of it. And they last far longer than anticipated!

Let’s face it, we don’t make it like we used to in the past. Now, far from us to wallow in nostalgia. But the truth is, much of our know-how on the construction of a nuclear power plant has been lost, thanks to decades of minimal activity.

China and Russia you don’t count. Being an authoritarian state-driven economy sometimes has its perks…

In the US, the last big NPP project were Vogtle 3 and 4 and V.C. Summers 2 and 3, launched in 2013, after a three decades hiatus for the American new build – most of its 92 reactors were built in the 60’s and 70’s. These projects were supposed to be the renewal of the US nuclear adventure, with Westinghouse at the wheel. Five years and a little over 9 billion in losses later, Westinghouse went bankrupt, claiming chapter 11 bankruptcy in March 2017. V.C. Summers was scrapped. Vogtle just went online, seven years after its initial deadline, and twice over-budget (15 billion dollars more).

In France, like in the US, the industry went through a dry spell after a 54-reactor building craze. That ended in 2005, when Finland decided to build a new type of reactor, followed by France, China and the UK (with two reactors each).

They were called EPRs standing for "European pressurized reactors" turned "Evolutionary pressurized reactors".

Six reactors, four countries. A colossal undertaking.

Finland’s Olkiluoto 3, poured first concrete in 2005. France’s Flamanville 3, poured first concrete in 2007. China’s Taishan 1 and 2, poured first concrete in 2009. Britain’s Hinckley Point C, poured first concrete in 2017.

OL3 started in 2022, twelve years behind schedule and 8 billion euros over an initial 3 billion budget. FLA 3 started in 2024, thirteen years behind schedule and 10 billion euros over an initial 3.3 billion budget. Taishan 1 & 2 started in 2018-2019, three and a half years behind schedule and approximately twice over an initial 3.5 billion euros budget.

HPC is still under construction, three years behind schedule (so far) and 8 billion pounds over budget. EDF has yet not declared bankruptcy. Being a state-backed company does that. As well as being a net power exporter.

What about the Koreans?

Contrary to the US – but a bit like France – they started with buying their reactors as turnkey projects from Westinghouse and Framatome. Ten reactors were built in the 80’s, before they began to create their almost-own design. In 2012 - and 23 built reactors later - KEPCO turned its gaze overseas. The Barakah project, in which four APR1400 were built, is flaunted by KEPCO as a resounding success. Despite being a tad more over schedule as officially claimed, one has to admit that the feat is rather impressive, OSHA and localization percentages put aside. The costs overrun, however, are not officially mentioned – contrary to EDF’s and WEC’s, which are plastered all over Wikipedia.

Relying on available and local sources of information, one can only notice that KEPCO, KHNP’s parent company, is 180 billion dollars in debt. And is currently suing its subsidiary over Barakah’s construction costs settlement.

Pretty grim overall, right?

Now, here’s a question for you. How do you cope with this as a company? As a rule of thumb, checking a company Glassdoor’s profile is extremely instructive…and helps understand a few things. If you’re state-owned (or if your parent company is, and takes your losses and slides cash your way on the sly - looking at you, KHNP), the target is breaking even on the project. Unauthorized state subsidies being the cardinal sin in a free market, you have to prove that you can keep it above the waterline. Of course, it helps when you can count on steady streams of revenue such as selling electricity and fuel like EDF and its Framatome subsidiary. The downside is that, being more of a utility than a company, you become complacent, slow and ponderous. Ask a French chargé d’affaire what they think of EDF: the word “arrogant” comes up pretty quickly. And that’s not only because they are French.

When you are private, it’s another thing altogether. Profit is more than expected…it is due. Having been bought by a shady Canadian trust fund named Brookfield after its 2017 bankruptcy Westinghouse is now heavily pressured to generate cash. EBITDA has become a much-dreaded word, especially when the company’s main source of revenue, fuel, is at maximum capacity and leaking from every crack. A s they were summoned to turn up a profit after their buyout, WEC took up every fuel contract they could, to the point where its manufacturing lines and teams approach a breaking point. On the other hand, being kept on their toes by a very business-oriented owner, has its perks. No ponderousness there: WEC is as efficient as a company in its sector could hope to be.

Now, who will outlast the other?

EDF? Hounded by its government to prove it’s not going to sink France’s budget, and hard pressed to demonstrate its EPR2 design is more than an engineer’s wet dream.

WEC? Hounded by its shareholders for cash and risk-mitigation. Look at Poland, where the Polish government ended up taking the project’s risk after neither Bechtel nor WEC accepted the burden.

KHNP? Parallel to the above mentioned beef with KEPCO, its shady Czech deal has triggered a parliamentary inquiry by the Korean opposition to sort out whether Team Korea’s magic willingness to offer fixed prices – seriously, who offers fixed prices given the industry track record – is not ultimately supported by the Korean’s taxpayer. Moreover, President Yoon, which championed the deal, is most likely going to see an early retirement after his little tantrum. His likely successor is not as nuclear friendly as he was!

All in all, an interesting line-up. We at Atom News will sure keep an eye on this fierce competition.

Can’t wait to see who will come up on top! ⚛️