(Updates with comment from minister in seventh paragraph.)
Feb. 19 (Bloomberg) -- Electricite de France SA, Europe’s biggest power producer, contracted Doosan Babcock to service and help extend the life of seven of its eight U.K. nuclear plants.
The agreement is valued at about 70 million pounds ($117 million) a year, Cameron Gilmour, nuclear service director at Doosan Babcock, said by telephone. While there’s no fixed duration, the contract may last as long as 20 years, he said. That would value the deal at as much as 1.4 billion pounds.
The contract is the clearest sign yet that EDF will run all its reactors longer than initially planned. A commitment to keep British generators running may also be a boon to the government, which has been warned by regulators that the U.K. faces possible blackouts if it doesn’t hasten the replacement of aging plants.
“Technically there’s no reason why these plants can’t run for much longer than was originally envisaged,” Gilmour said from Renfrew, Scotland. “This gives us much longer-term sustainability in the business,” allowing Doosan to train apprentices and graduates.
At present all U.K. atomic-power stations, except for Sizewell B, are due to close by 2023, which is also the year EDF plans to bring a new plant at Hinkley Point online. While the decision to extend the life of reactors rests with EDF’s board, their operation is subject to safety reviews by the U.K. Office for Nuclear Regulation.
An EDF official, who asked not to be named citing company policy, confirmed the agreement with Doosan Babcock, a unit of Changwon, South Korea-based Doosan Heavy Industries & Construction Co.
“This shows that nuclear presents big opportunities for highly skilled jobs, sustainable growth, and the lasting legacy of a U.K. supply chain,” Energy Minister Michael Fallon said in an e-mailed statement. “I want to make sure that the U.K. is at the forefront of this growing industry.”
EDF said last week it plans to extend the life of its Dungeness station by 10 years to 2028 and will make a final decision by year-end. In 2012, the utility said it would prolong the lives of Hunterston B and Hinkley B by seven years to 2023.
EDF may also seek extensions for Hartlepool and Heysham 1, which are currently due to operate until 2019, and for Torness and Heysham 2, due to run until 2023, the EDF official said. No official decisions have yet been made, she said.
In the past, the Paris-based company has said it wants to extend the life of Sizewell B, which has a pressurized water reactor, by 20 years to 2055. That’s the one plant not covered by EDF’s deal with Doosan Babcock.
The Doosan contract will include servicing the plants, inspecting components such as pipes and installing new parts when needed in all of EDF’s Advanced Gas Cooled Reactors in the U.K., Gilmour said. The accord will support 500 to 1,000 jobs.
--Editors: Amanda Jordan, John Viljoen