nuclear-news

France and the big nuclear energy mistake

The French government wants to expand nuclear production in France and it also wants EDF to spend big money on the rehabilitation of numerous nuclear power generating stations. It has put pressure on EDF to embrace those policies and we suspect that it could force the issue as the majority shareholder.

France plans to renationalize EDF, its giant utility. That doesn’t sound like a big deal because the government already owns 84% of EDF’s outstanding shares.

But here is how we read the story.

The French government wants to expand nuclear production in France and it also wants EDF to spend big money on the rehabilitation of numerous nuclear power generating stations. It has put pressure on EDF to embrace those policies and we suspect that it could force the issue as the majority shareholder.

But a board of directors, with a fiduciary responsibility to shareholders and other providers of capital, would have a hard time approving a strategy that looked too risky or economically uncompetitive. EDF is, after all, not a division of the ministry of defense, but rather a somewhat privatized company with the government as its biggest and controlling shareholder. At least that is the appearance it would want to give to its shareholders. If France requires more nuclear power for geopolitical or strategic reasons,
despite its seeming cost disadvantage in the marketplace, we have no quarrel with that decision.

Our issue is with the current policy—to require some non-governmental shareholders to bear national security burdens and take financial risks that really belong uniquely to the government. The French have approached the matter with admirable clarity.

 Oil Price 8th July 2022

https://oilprice.com/Energy/Energy-General/Europes-Big-And-Expensive-Energy-Mistake.html

July 11, 2022 - Posted by Christina Macpherson | business and costs, France, politics