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Macron’s nationalisation of EDF could have major implications for the UK

EDF has a more fundamental problem than state ownership can fix: the expense and long build times of nuclear power, compared to other technologies. “[Nationalisation] may change the capacity of the state to directly back the plans, but it doesn’t change the fact that it won’t be profitable,” argues Yves Marignac, at the négaWatt Association think-tank. “Nuclear is profoundly uneconomic. The market has said no,” adds Dr Paul Dorfman, associate fellow at the University of Sussex.

What Macron takeover means for Britain and France’s ‘nuclear renaissance’.
EDF nationalisation could have major implications for the UK’s nuclear fleet. France’s prime minister Elisabeth Borne faced boos and heckling as she set our her government’s plans to the National Assembly last week, striving for coalition after President Emmanuel Macron lost his outright majority in June.

High on her list was an announcement for France to take full ownership of its debt-laden energy giant EDF, as the weakened president tries to tackle the deepening energy and cost of living crisis
rippling across Europe amid the war in Ukraine.

Across the Channel, political turmoil was also affecting EDF. An announcement on planning approval for its Sizewell C nuclear project in Suffolk was pushed back until July 20 amid the chaos surrounding Boris Johnson’s resignation.

The company has a massive role in the UK’s energy sector, as owner of the UK’s nuclear fleet and only developer currently forging ahead with the country’s nuclear renaissance. Yet ballooning debts, outages and delays have raised doubts about its abilities on both sides of the Channel.

Will nationalisation in France be enough to fix its problems? The company’s problems stretch back beyond the turmoil in energy markets this year. Its debts of €43bn have swelled over several years amid high capital costs and spells of low electricity prices. Each year, EDF has to sell a chunk of its output at a fixed price to rivals, under state efforts to encourage competition.

Meanwhile, development of its flagship next-generation EPR reactors has been troubled. Though the first EPR power plant started running in China in 2018, one of its units has had to be shut for repairs due to cracked fuel rods. EDF says the problems have been “investigated and understood” and a solution found, with no risk posed to people or the environment. A second plant opened in Olkiluoto, Finland, in March – more than 10 years late and €8bn over budget. A third EPR in Flamanville, France, is running more than a decade behind schedule.

Meanwhile, Hinkley Point C, the new EPR power plant that EDF is building in Somerset, is now not expected to start generating until June 2027, with the pandemicdisrupting work. Sceptics of nuclear power argue EDF has a more fundamental problem than state ownership can fix: the expense and long build times of nuclear power, compared to other technologies. “[Nationalisation] may change the capacity of the state to directly back the plans, but it doesn’t change the fact that it won’t be profitable,” argues Yves Marignac, at the négaWatt Association think-tank. “Nuclear is profoundly uneconomic. The market has said no,” adds Dr Paul Dorfman, associate fellow at the University of Sussex.

 Telegraph 10th July 2022

https://www.telegraph.co.uk/business/2022/07/10/what-macron-takeover-means-britain-frances-nuclear-renaissance/

July 11, 2022 - Posted by | politics, UK

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