London (Platts)--14Sep2012/1010 am EDT/1410 GMT

French President Francois Hollande pledged Friday to close France's two oldest operational nuclear reactors at Fessenheim near Germany "at the end of 2016" under the condition of "a guaranteed security of supply in the region." Hollande had previously pledged to close the two 900 MW reactors in 2017 at the latest as the start of a long-term plan to cut France's reliance on nuclear energy from more than 75% to 50 % by 2025.

The fresh commitment to shutting the plant by the end of 2016 shows the Socialist government's confidence that France's power system margin will be sufficient going into the winter 2016-17, when electricity demand is highest.

State-controlled EDF controls all 58 of France's nuclear reactors and earlier this month, grid operator RTE warned the closure of the two Fessenheim units in 2017 would help push up the national supply deficit from 1.2 GW in 2016 to 2.1 GW in 2017. RTE's prediction factored in the successful completion by 2016 of EDF's third-generation 1.6 GW Flamanville 3 nuclear reactor, which will be crucial for Fessenheim to stop production.

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The Fessenheim reactors were commissioned in 1977 and are situated in eastern France near the border with Germany, which last year instigated a phase-out of nuclear power following the Fukushima disaster in Japan.

Speaking Friday at the opening of a national energy conference in Paris, Hollande said no jobs at the plant would be lost.

He also reiterated his opposition to shale gas drilling using current fracking techniques.

"According to current knowledge nobody can affirm that the exploration of oil and shale gas using hydraulic fracturing, the only known technique today, is exempt from serious risks on health and the environment," Hollande said, adding that the government had rejected seven permit applications in mainland France.

Last year the previous center-right government of Nicolas Sarkozy enforced a ban on shale oil and gas exploration, but a report released by a government advisory group earlier this week said the development of non-conventional fossil fuels could improve the nation's energy independence.

The Centre d'analyste strategique said France should protect itself from any possible future oil price shock and domestic non-conventional fossil fuel resources could help respond to demand "on the condition however that their development be fast enough and under exploration conditions which respect the environment."

--Robin Sayles, newsdesk@platts.com
--Edited by Maurice Geller, maurice_geller@platts.com

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