Commentary on the news from France

News: 

The European Commission has opened an in-depth investigation into the French state support plan for the construction of six new EPR2 reactors. Brussels is examining whether the €73 billion aid package will violate market competition and place too much risk on taxpayers.

Commentary:

France's ambitious plans to build a new generation of reactors (EPR2) create critical risks and direct obstacles for Serbia's plans to construct a nuclear power plant by ~2040, especially if Serbia chooses EDF as the vendor.

The promised state funding in France makes domestic projects an unconditional priority, which will inevitably lead to a “drain” of resources from export directions.

1. French state funding as an unconditional prioritization tool

• The essence of the problem: The Élysée Palace plan provides for subsidizing loans to cover about 60% of the costs of constructing 6 new EPR2 reactors (a program of ~10,000 MW). The European Commission (EC) is beginning an investigation into this aid, wary of its “necessity and proportionality.”

• The mechanism of obstruction for Serbia: If the EC approves this aid scheme (even with adjustments), it will create for EDF legal and financial obligations to strictly adhere to schedules within France. The government plans to guarantee EDF a “stable income” through 40-year contracts, but also establish a risk-sharing mechanism. Under these conditions, EDF cannot afford to jeopardize domestic projects (e.g., Penly 1&2, whose start is critical for the chain) for an export project in Serbia that will yield a lower margin and involves higher geopolitical risks of a “newcomer country.”

• Conclusion: Serbia automatically falls into the “secondary market” category, with resources allocated only after fulfilling the needs of the French EPR2 program. Any delays within France will be compensated by resources designated for export.

2. Manufacturing capacities: Supply chain monopolization (LLIs)

• The essence of the problem: The total capacity of the French program is 10,000 MW, with grid connection planned for 2038-2044.

• The mechanism of obstruction for Serbia: This means that the entire French nuclear industry, especially long-lead equipment manufacturers (LLIs) (such as Framatome for reactor vessels and steam generators), will be fully loaded with orders for the domestic EPR2 fleet for the next 10-15 years.

  • The “First Concrete” timeline in Serbia (2031-2032): To start within this timeframe, Serbia must order LLIs in the late 2020s. At that same time, Framatome will be obligated to produce LLIs for a third pair of reactors (Bugey) and possibly for a second pair (Gravelines).

  • Queue at factories: Framatome's factories (e.g., in Le Creusot for forgings) have limited capacity. Serbia will be in this queue behind 6 French reactors.

• Conclusion: The risk that Serbia will receive a reactor vessel for AP1000 or EPR from EDF with a delay of 3-5 years becomes nearly 100 percent. This makes achieving the grid connection goal by ~2040 impossible.

3. Engineering workforce: Global talent shortage and "brain drain"

This is the most critical point, confirmed by the Detailed Training Matrices from the CONSILIO report.

• The essence of the problem: The French EPR2 program will require the mobilization of tens of thousands of engineers, technologists, QA/QC specialists, and precision geodesists.

• The mechanism of obstruction for Serbia: EDF/Framatome are already experiencing a labor shortage due to delays in the Flamanville-3 (France), OL3 (Finland), and Hinkley Point C (United Kingdom) projects. The EPR2 program will siphon all available skilled personnel to the domestic market.

  • Training Time (8-9 years): According to the CONSILIO matrix, training Nuclear-Grade Skilled Craft or Field Engineering Staff for independent work takes 8-9 years. France will not have enough time to prepare sufficient new specialists by the peak construction of EPR2 (in the 2030s) and will therefore be forced to use existing experienced engineers.

  • Where will experienced engineers go? They will go to Penly and Gravelines to ensure compliance with 40-year contracts. For the project in Serbia (a newcomer country requiring maximum engineering support and on-the-job training), France will only be able to allocate inexperienced junior engineers, leading to mistakes, reworks, and delays (again confirming the Detailed Risk Matrix).

  • Regulatory body: The French regulator ASN will be fully loaded with licensing 6 EPR2 reactors and extending existing nuclear plants’ timelines, which will reduce its capacity to support Serbia in creating its Regulatory Body.

• Conclusion: France will face a severe shortage of experienced engineering personnel to implement its program. Under these circumstances, it will not be able to provide Serbia with the necessary volume of “high-skilled field engineering” (Category VK-1 and VK-2), which is critically important for a newcomer.

How Serbia’s position is projected under these conditions

Based on the data from the CONSILIO report and new information about the EPR2 program, Serbia's place in France's nuclear strategy is projected as follows:

1. EDF (France) as a High-Risk Vendor for a Newcomer: Choosing EPR technology from EDF for a target of ~2040 is an extremely risky step. EDF will not be able to guarantee Serbia priority for either LLIs or skilled personnel.

2. Inevitable Delays: The schedule for connecting the first nuclear power plant to the grid in Serbia by ~2040 (which requires construction to start in 2031-2032) becomes absolutely unrealistic if France is chosen as the vendor. The connection delay will shift to the late 2040s or early 2050s.

3. The Only “Fast” Path with France (By Violating Its Own Commitments): Serbia could only gain priority if France politically decides to slow its EPR2 program for Serbia, which seems fantastical given Macron's stated “energy sovereignty” and the EC investigation.

4. Alternatives: To meet the stated schedule (~2040), Serbia will have to seek vendors with less loaded domestic order books (especially for LLIs and personnel) or switch to MMR technology, but the CONSILIO report also states that MMRs may be in the "first-of-a-kind" (FOAK) licensing stage.