Re-Energized

If Anne Lauvergeon had been given the choice, the French nuclear-energy company she heads would have been the next state-owned firm slated for partial privatization. Earlier this year, she and her colleagues at Paris-based Areva jumped the gun by preparing all the official paperwork for a public offering, and lobbied the government hard to be next in line. Her insistence ruffled some feathers, especially in the Finance Ministry, according to people familiar with the behind-the-scenes maneuvering. And late last month, she officially lost her battle when Prime Minister Dominique de Villepin and Finance Minister Thierry Breton announced that Electricité de France (edf), the huge state electricity supplier, would be next.

Lauvergeon will no doubt get over her disappointment soon, since Areva emerges as a big winner even if its privatization is pushed back. That's because, as the price of selling 15% of its equity to the public, edf has agreed to invest as much as €40 billion over the next five years, mostly in France. Since nuclear power accounts for more than 75% of French electricity, a good chunk of that money is likely to go toward upgrading existing plants or building new ones. edf's dominant supplier: Areva, which has already picked up an order for a new-generation pressurized-water reactor to be built in the Normandy town of Flamanville from 2007.

Lauvergeon and Areva are on a roll these days. Nuclear power, written off as dead throughout Europe and much of the rest of the world over the past two decades, is suddenly back in fashion. The public still shudders when recalling the accident at Pennsylvania's Three Mile Island plant in 1979 and the disaster at Chernobyl seven years later, but these days, with worldwide demand for energy rising sharply, oil prices spiking at over $60 per bbl., and fears growing among the public at large about the lasting impact of greenhouse gases, the outlook for nuclear today is, well, quite radiant.

This September, some 300 executives from the world of energy and politics clambered into a huge hole in the Finnish town of Olkiluoto to watch a laser light show as the climax to the ground breaking for the first nuclear plant to be built in Europe in 14 years. The winner of the €3 billion plant contract was Areva, in a joint subsidiary with Germany's Siemens. China currently has nine nuclear reactors in operation and says it will increase its nuclear capacity fivefold by 2020. The Chinese are expected to select a Western contractor for two new plants this year. The race is between Areva, Westinghouse and Russia's AtomStroyExport.

Areva is well placed in the U.S., too. In September, it announced a joint venture with Baltimore, Maryland-based Constellation Energy to promote its new generation of nuclear plant, and expects orders for four reactors once the technology is approved by the Nuclear Regulatory Commission. Even in nuclear-resistant Europe, official attitudes are shifting. Bulgaria is currently holding a tender for two new reactors; British Prime Minister Tony Blair, who last week hosted an international conference on climate change, has called for a debate about the future of nuclear power amid signs that the government may order several new plants; and in both Germany and Sweden, public debates are raging as to whether to reverse a previous commitment to shut down existing reactors. It's no surprise that Lauvergeon talks about a "nuclear renaissance."