Nuclear bomb hits Areva’s flow battery programme

The Areva energy storage programme, including the Areva Schneider Electric flow battery project, is in doubt following the company's profit warning and share price meltdown. Photo credit: FlowBox, KIC-InnoEnergy

The Areva energy storage programme, including the Areva Schneider Electric flow battery project, is in doubt following a profit warning and share price meltdown. Photo credit: FlowBox, KIC-InnoEnergy

The future of a major flow battery initiative appears in doubt after news emerged yesterday of financial troubles at Areva, the French energy giant.

The company, which in October signed an energy storage cooperation agreement with Schneider Electric, announced yesterday afternoon it was suspending its financial outlook for 2015 and 2016 because of problems with its nuclear reactor business.

Areva is currently in a legal wrangle with Teollisuuden Voima Oyj (TVO), a Finnish nuclear power company, over the construction of a new European Pressurized Reactor (EPR) at Olkiluoto in Western Finland.

The project has been subject to major cost and schedule over-runs, with both parties blaming the other for causing the problems. Yesterday Areva and its Olkiluoto consortium partner Siemens updated an ongoing claim against TVO, to €3.4bn.

Until the matter is resolved there can be little certainty over when Areva will be paid.

Meanwhile the company is also awaiting the renewal of nuclear operations in Japan, other new reactor projects, recycling export contracts and an uptick in “the still lacklustre market for installed base services,” according to yesterday’s press release.

Adapting to market conditions

“In the framework of the ongoing budget process, Areva is currently working on an enhancement of its performance plan to adapt to market conditions which remain unfavourable,” said the company.

“Areva is undertaking a review of its strategic outlook and mid-term funding plan, which will be examined in the framework of its governance.”

Yesterday’s announcement marks the latest in a series of setbacks for the company. “Areva has published a series of warnings in the past months,” reported Reuters yesterday.

“It posted a €694m first-half loss in August and dropped a long-held forecast to sell 10 of its EPR reactors by 2016, warning 2014 revenue would fall 10%, more than the 2-5% decline forecast in February.”

Reuters also said Areva had announced capital spending cuts and asset sales after a move to slash its debt rating to non-investment grade by the ratings agency Standard & Poor’s.

While it is unlikely that its latest setback will spell the end of Areva, given the fact that it is more than 86% owned by the French government, yesterday’s announcement clearly puts the future of current research and development (R&D) activities in doubt.

Cooperation agreement with Schneider

Among these is a cooperation agreement inked in October with Schneider Electric, the energy and automation multinational.

The project, backed with European funds through KIC InnoEnergy, “aims to optimise the existing 50kW flow battery prototype designed by EnStorage to a 150kW demonstration module,” according to an October press statement.

In comments made to Energy Storage Report before yesterday’s Areva announcement, Schneider Electric corporate press and public relations officer Sophie Souquet said the two companies were hoping to beat vanadium redox flow technologies.

“The FlowBox technology delivers a better performance compared to standard flow batteries,” she said. “Currents are three times higher than traditional vanadium technology.

“So for the same size battery the FlowBox provides three times more power.”

The consortium partners were aiming to install the 150kW prototype at Schneider Electric’s Cadarache research site before end 2015, and test it throughout 2016, Souquet confirmed.

As previously reported in Energy Storage Report, there has recently been a surge of interest in redox flow batteries, with companies such as ViZn Energy and EnerVault commercialising a host of promising technologies.

A surge of interest

And last week it emerged that the Hawaiian renewable energy firm Energy Research Systems had purchased four vanadium flow batteries from Imergy Power Systems.

Areva, meanwhile, had been hoping to expand its share of the energy storage market not just with flow batteries but also hydrogen and potentially flywheels.

It remains to be seen how much of this activity will continue as the company struggles to fix its finances.

Areva has already ditched its concentrated solar power business, where it had recently achieved a breakthrough by adding molten salt thermal energy storage to a linear Fresnel plant design. The same could easily now happen to its storage operations.

It is also as yet unclear whether Schneider Electric would continue to push on with energy storage research if Areva were to abandon the market.

But speaking before yesterday’s announcement, Souquet said: “Schneider is committed to testing and improving storage use cases to develop and improve bankable solutions to solve the operational challenges which our end-user customers face.

“We know utilities have increasing difficulties in balancing their networks as renewable targets increase. Storage can be the game-changing enabler in smoothing out the issues coming from renewable integration.”

Written by Jason Deign

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