Enel-EDF nuclear deal signals Italian renaissance

5 March 2009


Italy looks set to revive its nuclear power industry following an agreement with France on the construction of new generating capacity.

Italian prime minister Silvio Berlusconi and French President Nicolas Sarkozy have signed an accord on civilian nuclear co-operation, a deal that is mirrored by a memorandum of understanding (MoU) between EDF and Enel that sets the basis for the construction of at least four EPR reactors in Italy.

The two agreements represent the start of a new era for nuclear energy in Italy, which voted in a 1987 referendum to close all of its nuclear power plants. Enel could also boost its position in France’s electricity market by extending an existing agreement with EDF on the construction of nuclear capacity in France.

The two companies say they will develop, build and operate EPR-based power plants in Italy once the legislative and technical processes enabling a return to nuclear power in the country are complete. Enel will have a majority stake in the plants’ ownership and will also take a leadership role in plant operation.

The goal is for the first Italian unit to enter commercial service no later than 2020. Ownership of the plants could be shared with other partners, according to Enel.

“Enel is pleased to have an industrial partner with the experience and internationally-recognised reputation of EDF for the re-launching of nuclear power in Italy,” said Enel CEO Fulvio Conti. “The agreements signed today contribute to strengthening the Italian and French economies in the strategic energy sector and to developing further reciprocity in our respective markets.”

Enel is already active in the French nuclear sector with a 12.5 per cent share in the EPR power plant under construction at Flamanville. A second MoU between the two firms lays the foundation for joint development of a further five EPR projects in France.

While the construction of more nuclear plants in Europe is positive news for the nuclear industry, it raises the question of whether the engineering sector will have the capacity to meet demand. The UK is working towards the development of several new nuclear plants, including four EPR reactors by EDF.

Sweden has announced plans to abandon its ban on new nuclear construction, while Germany could also reverse its nuclear phase-out policy in the face of greenhouse gas emission targets and energy security concerns. Italy relies heavily on imports of energy its energy prices are among the highest in the EU.

Under their MoU, Enel and EDF will form a 50-50 joint venture to undertake feasibility studies into the construction of EPR units. When the studies have been completed and investment decisions have been taken, individual companies will be formed to build, own and operate each of the projects.




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