The French state energy group building Britain’s new £19.5 billion nuclear plant faces being split up amid fears that it is facing financial disaster. The French economy ministry is considering a proposal to restructure EDF into two units, one of which would handle its nuclear activities, the other its renewable energy and electricity distribution businesses. Officials insist that no decisions have been taken, but the proposals reinforce concerns that EDF will be unable to meet its financial commitments. The group, which reported a debt of €37.4 billion in its 2016 annual results, is shouldering two thirds of the £19.5 billion cost of building two new-generation European pressurised reactors at Hinkley Point in Somerset, which are due to come on stream in 2025. The state-owned China Nuclear General has a one-third stake in the scheme. EDF also needs to find at least €40 billion to renovate its 58-strong chain of reactors in France, which produce 75 per cent of the country’s electricity. The state, which owns 83.4 per cent of EDF, injected €3 billion into the business as part of a €4 billion recapitalisation this year, but officials are still worried about its financial outlook. However, the scenario under consideration would involve creating an EDF subsidiary containing its nuclear activities in France, Britain and elsewhere, which would be taken off the stock market. It would sell electricity in France at a price fixed by a regulator to cover the cost of work on existing reactors. Supporters of the plan say that this is the only way that EDF could hope to fund the cost of prolonging its French reactors beyond their planned 40-year lifespan. It would bring EDF’s French nuclear business closer to the model established by the British government, which has guaranteed the group a price of £92.50 per megawatt hour for electricity produced at Hinkley Point.
Times 25th Nov 2017 read more »