Macron’s battle to rewire EDF. French President Emmanuel Macron wants to restructure EDF and separate the costly nuclear power arm from the rest of the business. Jean-Bernard Lévy has developed a remarkable level of patience in his role leading utilities giant EDF. The French state-controlled company oversees some of the longest-running infrastructure projects in the world, operating 73 reactors globally. But even Lévy is bound to have grown frustrated by the lack of progress in the French government’s effort to improve the company’s prospects. In what has been code-named Project Hercules, France wants to overhaul competition rules and separate EDF’s costly nuclear power arm from other areas of its business. It is hoped the move could allow EDF to double its growth target in renewable energy to 100 gigawatts (GW) by 2030 and help it manage its debts. Brussels must first give approval for EDF’s reorganisation, but talks appear to have stalled and time is running out before France’s general election in April. Its expensive nuclear fleet is one reason for its heavy net debt of €42bn. Multi-billion euro investment is needed in coming years to decommission, maintain and build new plants. S&P Global says nuclear projects “represent the highest risk to the group’s credit quality”. It expects net debt to rise to €50bn-€52bn by the end of 2023. EDF argues it is disadvantaged by rules in France allowing competitors to buy a quarter of the electricity generated by its nuclear fleet at a fixed price of €42 per MwH, to make up for its monopoly in the market. The price is too low and inflexible, EDF argues. Meanwhile, EDF’s spending grows. The company is building several large assets without yet getting paid, including the £22bn-23bn nuclear power plant Hinkley Point C Somerset. For its next planned nuclear power station in the UK, Sizewell C in Suffolk, a different funding mechanism is being discussed with the Government that would allow EDF to recoup costs from household bills during construction, rather than having to wait until the plant is generating. Ministers are believed to be preparing to introduce legislation this autumn.
Telegraph 11th July 2021 read more »