Institutional Competition and Evolution
Institutional Competition and Evolution
Or; how France went from destitution to the global leader in nuclear energy, Part II
This is the second part of a three-part series on the French nuclear industry. In Part I, released last week, we looked at ideas and people: how the foundational technologies for the nuclear industry were transmitted to France following the Manhattan Project, and then how those technologies were put to good use by a cohort of engineers trained in the holistic methods of the Polytechnique, blending science and management. This week, in Part II, we will turn to look at the role of institutions in the industry.better to have an imperfect system that keeps its inventors busy, rather than a perfect system that only requires obedience. - Marcel Boiteux
France had an early start in the race to develop a home-grown nuclear industry. But this advantage didn’t easily convert into rapid advances in nuclear power production. As the network of scientists and polytechniciens tried to scale their model reactors into a functioning nuclear power system, they encountered new challenges, but also new opportunities. The way that these issues were resolved would end up laying the foundations for the country's success in scaling the system in the 1980s and ‘90s.
As Gabrielle Hecht documented in her book The Radiance of France, the French nuclear industry was shaped by the political and economic struggles of two competing institutions: the Commissariat a l’Energie Atomique (CEA) and Électricité de France. Both groups were highly involved in the development of nuclear power, but their aims and organizational structures were orthogonal. And, their initial forced collaboration led to competition and compromises that were counterproductive for the industry.
The CEA was set up in 1945 by Charles de Gaulle as one of his first major acts of reconstruction. The post-war government saw technological progress as an antidote to geopolitical decline and a way to reclaim France's “civilizing” mission. The CEA was developed as part of this vision to lead the primary efforts of the French state in developing nuclear capabilities. It would report directly to the prime minister’s office, to ensure independence from other bureaucratic and political concerns and to keep the institution “on mission.”
However, from the beginning, the nature of that mission was not perfectly clear. The CEA had multiple mandates: "ensuring French grandeur, the significance of independent energy sources for national autonomy, and the primacy of nuclear expertise." In practice, this meant that while they were meant to develop nuclear technology on all fronts, they were most responsible for France’s nuclear weapons program.
At first, this goal was implicit. At the beginning of the Cold War France outwardly pursued a policy of peaceful nuclear energy development. However, with the beginning of the Fifth Republic in 1958, the development of nuclear weapons became an official aim for the group. And not long after, in 1960, the first French nuclear bomb was detonated, making it the fourth country—after the US, Russia, and the UK—to test an independently developed nuclear weapon.
The Électricité de France (EDF) was formed shortly after the CEA in 1946 for more prosaic reasons. After the war, the electricity system in France was highly fragmented with over 1000 local utilities. It was also suffering from serious degradation as a result of the conflict and it was unclear how it would find the resources to effectively rebuild the country’s industrial base. To address this, the government undertook a process of nationalizing and centralizing the various entities that had previously been responsible for electricity generation and operations in France to "unify the production, transmission and distribution of electricity in a single enormous utility.” EDF was the result. The final group reported to both the Ministry of Finance and the Ministry of Industry, and was ultimately seen as one of their tools for economic development.
In other words, while the CEA was created to achieve a broader cultural dream of French “grandeur” through a particular national technological ambition—nuclear weapons—the EDF was created simply to produce the most energy at the lowest cost.
Because of their overlapping areas of responsibility—the development of nuclear technology, and the management of the electrical grid that any nuclear power would be connected to—the CEA and the EDF worked closely together. However, their competing aims quickly came into conflict.
While the CEA focussed on technical nuclear capabilities with an implicit goal of creating a nuclear weapons program, the EDF was centered on more practical concerns around developing an "economically viable nuclear energy program." These disagreements played out in competing designs for reactors: the EDF looked to prioritize the maximum energy production at the lowest possible cost, while the CEA focussed on the creation of plutonium as a precursor to nuclear weapons and as a way to rapidly increase technical know-how amongst French scientists.
The conflict was eventually resolved in the 1970s, when France moved to base the future development of the nuclear system on the American-designed Light Water Reactors (LWR) as the primary form of nuclear power in the country. This design prioritized electricity generation at the expense of plutonium creation and favored the institutional structure and priorities of the EDF. There was significant pushback at the time, but once this decision was made, the CEA was sidelined to focussing primarily on nuclear weapons production, leaving the EDF free to chart French nuclear policy moving forward.
The EDFs Competitive Advantage
Two factors helped the EDF to emerge victorious and proved instrumental in the success of France’s nuclear power in the latter half of the 1900s and early 2000s: the cultivation of a new capability in economic modeling, and an institutional imperative to maintain ownership over the full technical designs for new reactors.
Because of the EDF’s mandate to maximize electricity generation at the lowest possible cost, economic considerations were always paramount in the institution’s decision-making process. During the 1960s, as computers became increasingly available and economic modeling was in vogue, this emphasis on economics led them to develop a new department: the Services de Etudes, Économiques Générales (SEEG), run by Marcel Boiteux. This group was responsible for developing economic forecasts to predict the price of electricity under varying conditions, the cost of creating new power plants, and everything in between. Their abilities in this domain quickly became some of the best in the country, and the calculations that the SEEG put out would become the primary facts used by both the EDF and the CEA in arguing for their respective policy positions.
This positioning gave the EDF significant leverage when making the economic arguments for adopting the LWR systems. It also meant that once they were more in control of the system’s future, the EDF had an ability (or at least a perceived ability) to make accurate projections and thereby ensure the “profitability” of their system. With such an ability, they could drive policy decision-making effectively in favor of additional nuclear power capacity.
The second factor in the EDF’s success was an institutional imperative to maintain control over the design and management of their reactors. Early on, the CEA had adopted a “policy of champions,” according to which the CEA would identify French contractors as potential national “champions.” They would then give them authority over developing the various parts of the nuclear reactor facilities, usually under a lead project management firm that was similarly selected. The belief was that this approach was important for the mandate of “ensuring French grandeur.” These contractors would be able to develop technical know-how and become global leaders in their respective industries. In theory, this also fit with the CEA’s vision of a more autarkic industry that could be of greater value for military purposes.
By contrast, the EDF believed that to achieve their targets for electricity generation and cost management, they would need to develop the skills to create and manage nuclear power facilities in-house. Under the “policy of champions,” the various contractors would naturally attempt to bid up their various parts of the construction. There would also be a constant incentive to obfuscate the real work needed to develop the plants, as one-sided knowledge would leave more negotiating power in the hands of the contractors. As the EDF was ultimately responsible for maintaining cost and efficiency, they wanted to avoid this situation and ensure that they had the know-how and technical expertise to build efficiently themselves, with private industry acting simply as suppliers.
This in-housing of technical and managerial competence allowed the EDF to both mount more compelling arguments in favor of the LWR system and ensure that such a system, once selected, could be effectively operated, expanded, and even exported by the French state. It also meant that the EDF was positioned well to continue to innovate and expand their production of the LWR system, even though the designs and licensing had originally come from the US. As the LWR system gained in global prominence, this meant that France could continue to build out its nuclear power system to take advantage of a larger potential market for their products based on a shared platform. Ironically, pursuing a policy that explicitly aimed to develop French champions backfired, and it was the policy aimed at producing the best possible solution that allowed such a champion to emerge.
By the mid 1970s, the EDF had emerged as a competent and well-organized steward of France’s nuclear power system. In the last part of this series next week, we will look at the final ingredient that led to that system’s continued growth through the 1970s and ‘80s, precisely as other countries were scaling back their nuclear programs: the role of national identity.
Acknowledgements
Thank you to Robert Bellafiore for reviewing an earlier version this essay and providing edits and comments.
This article could not have been written without Gabrielle Hecht’s book The Radiance of France. It is an incredible case study not only of how nuclear power developed in France between 1945 and the early 1970s but more importantly a powerful account of how ideology, politics, and technology are always interleaved in the deployment of any industrial concern.