Unistar Nuclear Energy ties Electricite de France to North America

23 July 2007

Constellation Energy has agreed with Electricite de France to form a 'strategic joint venture' to operate new nuclear power plants in both the USA and Canada.

Dubbed Unistar Nuclear Energy (UNE), it would 'develop, own and operate' a possible standardised fleet of reactors envisaged by the Unistar scheme, itself a joint venture between Constellation and France's national nuclear technology company Areva.

The companies' 20 July announcement was the first time Unistar efforts have been linked to Canada.

Overall, Unistar would see astandardised US-specific version of Areva's Evolutionary PressurizedWater Reactor (USEPR) licensed for build in that country. According to current plans the first could be built at Calvert Cliffs, and one more each at Nine Mile Point and Amarillo.

Mayo Shattuck, President, chair and CEOof Constellation, said: "Many milestones lie ahead since we've yet tomake a commitment to build. But this alliance is a majoraccomplishment." His company would contribute 'subsidiary companies and interests that it has independently created and owns as part of Unistar.'

A joint statement by EdF and Constellation said that EdF would invest up to $625 million in UNE, starting with $325 million in cash. Subsequent EdF investment in UNE would dep end on Unistar's progress: $175 million is conditional on the filing of an application for a combined construction and operating licence, the first one being slated for Calvert Cliffs in March 2008.

The two companies would each own 50% of UNE. It has been agreed that EdF may purchase up to 9.9% of Constellation's outstanding common shares in the next five years - limited to 5% in the first year - and place an observer on its board. The two have also concluded a cooperation agreement 'to review potential joint development in the USA.'

After receipt of design certification, an electricity utilitycould approach the Unistar venture for an integrated construction andoperation package based on USEPR.

Since the 1970s, EdF has been Areva's main customer as the operator of France's national fleet of 58 Areva-designed reactors, forerunners of EPR. EdF is currently beginning to construct an EPR at Flamanville in northern France. It is intended to be the pilot plant of the design, which is expected to replace France's current fleet in coming decades.

An EPR is also under construction at Olkiluoto in Finland; two are planned for Jangjiang in China; and Areva and EdF are displaying great confidence with respect to the re-emerging UK market. EdF also signed an agreement in February to assist
China Guangdong Nuclear Power Company with the Jangjiang units.

The standardisation of reactor designs and the exchange of operating experience are both seen as essential to good economics and operating performance in the modern nuclear industry.

Further information

Electricite de France
Unistar Nuclear

WNA's US Nuclear Power Industry information paper