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European energy giant EDF’s stock has fallen sharply after reporting problems with its nuclear reactor components.

The French power provider flagged issues with steam generator welds and other components used in nuclear reactors.

The back story.

The state-controlled Électricité de France (EDF) manages the country’s 58 nuclear power reactors, which make up the largest source of electricity in France.

No country is more reliant on nuclear power for electricity than France.

EDF’s flagship new nuclear project at Flamanville faces delays of up to three years after the French nuclear watchdog ordered repairs to eight faulty weldings.

Construction began in 2007 and was originally expected to be completed by 2012.

In July last year EDF said the welding problems would cost a further €400 million - taking the total cost up to €10.9 billion.

What’s new.

Nuclear reactor business Framatome, owned by EDF, discovered a “deviation” from technical standards governing the manufacture of nuclear reactor components.

The problem particularly concerned steam generator welds, it said.

EDF said it has launched in-depth investigations to identify all affected components and reactors to ensure they were fit for service.

The company did not say whether any sites would be temporarily shut down but said the issue concerned in-service components as well components yet to be installed.

The French nuclear regulatory authority has also been informed.

EDF shares slumped 7.6% in early trading.

Moving forward.

Investors reacted badly as the company’s share price suffered its sharpest drop in almost two years.

The lack of information from EDF and vagueness over the scale of the problem may also be fueling investor concerns.

Further updates will be crucial but any indication that reactors may be shut down, or that the issues could be widespread, could send the stock even lower.