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Tuesday 13 December 2011

Info Post

Areva FunkytownToday, French nuclear company AREVA said it expected to post operating losses of about 1.4 to 1.6 billion euros in its 2011 year-end financial report, including a cash flow loss, before tax, of about 1.8 billion euros.

This story from AOL Energy News is rather bare on facts, substituting something very close to a bald assertion:

Only last week Washington DC-based think tank Worldwatch Institute released its Vital Signs Online (VSO) report noting that the world's nuclear power portfolio was quickly shrinking. Now nuclear power companies worldwide are posting numbers that reflect the trend.

Well, it’s one nuclear energy company and it wouldn’t seem to be reflecting this particular trend, if trend there be. (I haven’t looked at the VSO report – yet – and must admit I’ve never run into the Worldwatch Institute.)

This story, from the rather unbalanced Business Green, at least gets the details about this right:

The company announced yesterday that operating losses for this year could reach €1.6bn, primarily as a result of the Fukushima disaster on the value of its uranium mining operations.

But what does AREVA have to say about this? Let’s look:

In this context [the global demand for more electricity], the German decision [to close its nuclear facilities] remains an isolated case and the great majority of nuclear programs around the world have been confirmed. More conservative in its projections than the International Energy Agency, the group expects growth of 2.2% annually, reaching 583 GW of installed nuclear capacity by 2030, against 378 GW today. However, the Fukushima accident will lead to delays in launching new programs.

A little more:

The news was followed today by confirmation that Areva will suspend planned "capacity extensions" at four nuclear sites in France, halt work to extend its Eagle Rock enrichment plant near Idaho Falls in the US, and scale back planned investment at uranium mines in the Central African Republic, Namibia and South Africa.

Uranium again. I guess you could look for corporate spin there, but it’s generally transparent. in any event, AREVA has created a plan called Action 2016 to help it refocus the company:

"Action 2016" [will] consolidate AREVA's leadership in nuclear energy and become a leading player in renewable energy.

You can read more about Action 2016 at AREVA’s site. Here’s what AREVA says about Fukushima and its role in the nuclear energy industry in general:

Faced, like all its competitors, with the period of uncertainty in the wake of the Fukushima accident, AREVA can rely on the strength of its integrated business model, which makes it possible to take advantage of opportunities in each segment of the nuclear market.

Which means the company can manage a facility top to bottom or just some aspects of an operation – and ride out the bumps if countries delay nuclear energy projects. 

None of this is to say that AREVA hasn’t hit difficulties or that the accident at Fukushima Daiichi hasn’t contributed to those difficulties. (Curiously, the global slowdown in electricity consumption and the continuing economic environment aren’t even mentioned. I’d hate to think we’re so used to them that we consider them a given.)

But it’s a little too easy to jump to the conclusion that the nuclear energy industry has entered a death spiral or even “reflects a trend',” even if one shy of evidence. A rough patch for one company doesn’t set the entire industry out on a plate for vultures. It’s lazy and dishonest to imagine it does.

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For example:

China, the world’s biggest energy user, may resume approving new nuclear projects after the cabinet endorses draft safety rules prepared by the Ministry of Environmental Protection, an industry association official said.

Perhaps not fertile territory for AREVA, but this is the kind of thing it says it is waiting for. And it is happening.

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I’m purposely ignoring the stories about the NRC currently making the rounds of news outlets. There’s a hearing of the House Oversight and Government Reform committee tomorrow at 10:00 am (EST) (you can watch the webcast here) at which the five commissioners will offer testimony and answer questions about possible discord at the agency. Let’s watch that first and then return to the subject. Until then, what you may read will remain a heap of gossip.

From USA Today:

Q: I never heard of Areva until I saw a TV ad recently and don't think I got the message. Just who is Areva and how are they going to influence my future? The commercial is catchy, and the little tune stays running around in your mind, but if people can't understand it, I don't think Areva is getting their money's worth.

A: Areva wants to power your future. It's a Paris-based industrial giant whose businesses include nuclear power and energy alternatives. It has U.S. operations in 45 locations in 20 states. The ad, which has aired previously, is part of a campaign started in May to make its name better known in the U.S. The animated TV ad, which you can see here, uses the 1980 Lipps Inc. classic Funkytown, a song that's also been in ads for FedEx, Ore-Ida's Funky Fries, Nissan and Volkswagen. Areva uses the opening lyrics for the song, which have a distorted sound through use of a voice box. They speak about moving to a town that's "groovin' with some energy." Areva marketers most care that you get the last few words: "Talk about it, talk about it, talk about it" (which is what they want you to do about them).

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