A Major Setback for EDF
EDF was competing for a contract to construct two nuclear units at Dukovany in the Czech Republic’s center. After eliminating American Westinghouse, Russian Rosatom, and Chinese CGN, EDF reached the final round. Despite French President Emmanuel Macron personally promoting EDF’s bid in Prague last March, the French company lost to KHNP. « The Korean offer was superior on all evaluated criteria, » Czech Prime Minister Petr Fiala stated in a press conference on Wednesday, July 17. KHNP’s bid was around 200 billion Czech crowns per unit, totaling approximately $8.65 billion.
Cost Overruns
This loss is a significant blow for EDF, which is preparing to launch the Flamanville EPR « by the end of summer » after numerous issues, including cost overruns and delays. Winning the Czech contract would have bolstered EDF’s international legitimacy. Two years ago, EDF lost the Polish contract to Westinghouse. The company still hopes to secure a massive contract for six EPRs in India, though discussions have been protracted for over a decade. EDF is currently constructing two EPRs at Hinkley Point in the UK, but costs have surged from an initial estimate of €21 billion to between €36 and €40 billion.
The Abu Dhabi Nightmare
Cost overruns contributed to EDF’s defeat in the Czech Republic. The victory of its Korean competitor recalls a painful memory for EDF. Fifteen years ago, with a supposed dream team (Total, GDF Suez, Areva), EDF lost the « contract of the century » for Barakah in Abu Dhabi to KHNP. At the time, KHNP was a newcomer in the nuclear industry but successfully built four reactors for $24 billion, respecting both the budget and schedule.
Looking Ahead
The need to decarbonize has led many countries (Sweden, Finland, the Netherlands, Italy, Slovenia, Slovakia, etc.) to reconsider nuclear energy, presenting opportunities for EDF. To win future bids, EDF must improve contract execution, potentially taking cues from the Korean approach.
