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France’s nationalisation of nuclear energy corporation EDF raises more questions than it answers

Just as Europe attempts to move away from its dependence on Russian gas and grapples with soaring power prices, problems at some of EDF’s existing 56 reactors in France have caused shutdowns and sent its energy output to multi-decade lows.

At the site of France’s first new nuclear reactor in more than 20 years, robots are whirring away fixing faulty welding as developer EDF races to open the plant after a decade of delays that have damaged its reputation.

Ahead of it lies a challenge of a different order of magnitude: a construction program to build six more, just as the French government, which owns 84 per cent of the business already, plans to take full control.
The full nationalization of EDF, which was announced earlier this month, comes as a series of crises pile pressure on the group’s finances.

In theory this will provide it with some relief away from the glare of public markets. So far, however, the state buyout has raised more questions than it has answered, including how the government thinks it might do a better job at fixing long-running industrial problems that have plagued projects at EDF, some of them as basic as a lack of experienced welders. “It’s not because the government will now have 100 percent that it’s going to suddenly take three years less to build a reactor,” one person close to the company said. “Right now, we’re in symbolic territory with this nationalization. It does not resolve any of the main problems we know the group is facing – will it allow EDF to bolster the skills it needs?” said Cécile Maisonneuve, a senior adviser at the center for energy and climate at French think thank IFRI. “None of the industrial or regulatory issues were linked to its capital structure.”

Just as Europe attempts to move away from its dependence on Russian gas and grapples with soaring power prices, problems at some of EDF’s existing 56 reactors in France have caused shutdowns and sent its energy output to multi-decade lows.

FT 17th July 2022

https://www.ft.com/content/7d7225ad-dd3b-4b95-95a6-c270a0089277

July 16, 2022 - Posted by Christina Macpherson | business and costs, climate change, France, politics