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French nuclear company EDF considering retreating from operations in UK

Telegraph 26th Jan 2019 The developer of the Hinkley Point C nuclear plant is exploring a ­retreat from the UK as government ­energy policies take a toll on the industry’s largest players. Cash-strapped French utility EDF is weighing a range of options to distance itself from the British energy market.
The Sunday Telegraph understands from multiple industry sources that they include a potential spin-off of its energy-supply business in a merger with a fast-growing start-up. The move has been “on the table for at least a
year”, according to one senior figure, but it is being approached with caution by EDF’s Paris head office amid concern over the political implications.
A retreat by EDF would be likely to anger the Government. Ministers agreed to fund the Hinkley Point C nuclear plant in a complex deal which is likely to cost energy bill payers about £50bn over the lifetime of the project. EDF has remained committed to supplying gas and power to about 5m UK customers despite making losses for almost a decade, according to ­official figures.
Its place as one of the Big Six energy incumbents is considered politically important as it pushes ahead plans for
another two nuclear power projects with support from China. EDF is locked in negotiations with the Government over plans to fund its plans for a reactor at Sizewell C. Discussions about a step back from the energy-supply
market began after the departure of long-serving boss Vincent De Rivaz in 2017.
The radical proposal came as EDF faced mounting pressure from the Government’s energy price cap, and rising competition from the flood of start-ups into the market. Energy bosses are up in arms over the Government’s conflicting energy policies which demand companies keep bills low while paying higher costs for clean energy and the roll-out of smart meters.
EDF’s challenges are further complicated by its ageing portfolio of existing nuclear plants, where profits are falling due to low market prices for electricity and the weak pound. It is considering the sale of a minority stake in the reactors, which supply a fifth of the UK’s electricity, alongside its partner Centrica. The parent company of British
Gas has confirmed plans to sell its 20pc stake in the reactors and industry sources say EDF hopes to sell another 29pc from its share within the same transaction. The deal is understood to have caught the eye of a consortium
of ­pension funds which would hold a ­minority share of the business while EDF remains the operator of the ­nuclear reactors.
https://www.telegraph.co.uk/business/2019/01/26/edf-weighing-retreat-energy-market-uk/

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January 28, 2019 - Posted by | business and costs, France, UK

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