CONSULTING

Credit agency Standard & Poor’s (S&P) downgraded AREVA to “junk” (BB+) in November 2014 761 ,
and by another two notches to BB-, deep into the speculative domain in March 2015. 762 Then, in
December 2015, following further revelations on the extent of its financial problems, S&P’s
downgraded the stock further to B+, an investment class described as “highly speculative”. 763 By
the end of-June 2016, AREVA’s share price had plunged to below €3.30 (US$3.75) and had lost
95 percent of its peak 2007 value.
Beyond the capital injection, AREVA will have some income, estimated at €2.5 billion
(US$2.8 billion), from the sale of its reactor division AREVA NP to a holding that would be
majority-owned by EDF. The scenario is not without risks as the takeover could turn out to
exacerbate EDF’s own difficulties: the two largely state-owned firms have long been intimately
linked by transactions and dependencies, and the French state itself does not have infinite
capacity to support long-term losses.
ASN Chief Pierre-Franck Chevet, in his presentation of the Annual Report 2015 to the media,
stated that “the nuclear safety and radiation protection situation is of major concern” and
requested “a significant increase in its resources”. 764 A call that, as of mid-2016, has not yet been
heard. ASN wishes to increase the combined workforce of ASN and its technical backup, the
Institute for Radiological Protection and Nuclear Safety (IRSN), by 140 to 150 people, while the
government granted only an increase of 30 staff over the coming three years.
Renewable energy development has been slow in France and the biggest share remains large
hydropower, but for the first time in 2014, new renewables (other than hydropower) generated
more power than fossil fuels. Wind power capacity additions have accelerated with another GW
in 2015 after 1.1 GW in 2014, to reach a total of 10.3 GW. Less than 1 GW of solar was installed in
2014 and 2015, and cumulated capacity reached 6.2 GW at the end of 2015. Over the past year,
wind covered 4.5 percent of national electricity consumption versus a 1.6 percent contribution of
solar photovoltaics. 765
Germany’s post-3/11 decision to shut down immediately eight of its 17 operating reactors
and phase out the remaining nine until 2022 triggered comments around the world, from disbelief
to certitude of failure. That this choice was led by a conservative, pro-business, and, until the
Fukushima disaster, very pro-nuclear Government, led by physicist Chancellor Angela Merkel,
with no political party dissenting, makes it virtually irreversible under any political constellation.
This decision was based on a decades-long debate in German society with nuclear phase-out
legislation in place since 2001, that had been amended only in September 2010 in order to allow
761 S&P, “French Nuclear Group AREVA Downgraded To ‘BB+/B’ On Expected More Negative Cash Flows;
Outlook Negative”, 20 November 2014.
762 S&P, “French Nuclear Group AREVA Downgraded to ‘BB-’ on Further Profit Challenges and Cash Burn;
Outlook Developing”, 5 March 2015.
763 Reuters, “S&P says Areva downgraded to 'B+' – RTRS”, 22 December 2015, see
http://www.reuters.com/finance/stocks/AREVA.PAp/key-developments/article/3314652, accessed
26 May 2016.
764 ASN, “The nuclear safety and radiation protection situation is of major concern. ASN is remaining
vigilant”, Press Release, 22 January 2016, see http://www.french-nuclear-safety.fr/Information/Newsreleases/The-nuclear-safety-and-radiation-protection-situation-is-of-major-concern,
accessed 11 June 2016.
765 RTE, “2015 Annual Electricity Report”, March 2016.
Mycle Schneider, Antony Froggatt et al. 185 World Nuclear Industry Status Report 2016