EDF’s minority shareholders want French govt to be forced to buy them out.
EDF staff investors demands France buys out minorities in nuclear dispute
Staff shareholder group says state abuses majority
* Minorities say EDF used as government policy tool
* EAS fears Hinkley Point will crimp future dividends (Adds detail on dividend, EDF no comment)
Reuters By Geert De Clercq PARIS, April 19 An EDF employee shareholders group has asked the AMF market regulator to force the French state to buy out the utility’s minority shareholders, in a dispute over its plans to build nuclear plants in Britain.
In a letter to the AMF, seen by Reuters on Tuesday, EDF Actionnariat Salarie (EAS) asks the market regulator to consider requiring the state to launch a so-called public withdrawal bid.
EAS alleges that the government is abusing its position as a majority shareholder by forcing EDF to go ahead with building nuclear plants in Britain, which EAS says is too risky for EDF and will prevent it from paying dividends in coming years……..
HINKLEY POINT CONSEQUENCES
EAS argues that in pushing EDF’s 18 billion pound (22.8 billion euros) project to build two reactors at Hinkley Point, in Britain, the government defends the interests of the country’s nuclear industry rather than those of EDF, at the expense of its minority shareholders…….
Hinkley Point is crucial for the survival of reactor builder Areva and France’s many smaller nuclear companies, in an industry that employs about 200,000 people. With three quarters of its power generated by nuclear, France needs no more reactors, and export prospects are limited after the 2011 Fukushima disaster.
“While the state only owns 85 percent of EDF’s capital, it behaves as if it is the sole proprietor and uses the company as a lever for its industrial policy,” EAS said.
It also said the UK project will prevent EDF from paying a dividend for at least seven years……..
On Wednesday, the government will discuss EDF’s finances ahead of an EDF board meeting on Friday. Sources close to the company said the board will review financing options but will not decide on Hinkley Point. (1 euro = 0.7906 pounds) (Editing by Alexander Smith) http://www.reuters.com/article/edf-nuclear-shareholders-idUSL5N17M5CN
France’s nuclear corporation faces massive costs for decommissioning nuclear reactors
Nuclear reactor clean-up weighs on EDF, FT.com, 19 Apr 16, Michael Stothard in Paris French utility faces questions about whether it has set aside enough to decommission power plants
In 1997 French utility EDF started to dismantle its first nuclear power plant, a 30-year-old heavy water reactor in Brennilis, north-western France. It was expected to cost €250m.
The bill is now set to be at least half as much again, and the decommissioning is still not done. In fact, there has never been a full dismantling of a reactor in France, the only European country to get three-quarters of its electricity from nuclear power.
EDF, the operator of all 58 of France’s reactors, is preparing to build a new £18bn plant at Hinkley Point in the UK that some at the Paris-based company have warned is too dangerous given its stretched balance sheet. EDF’s other big reactor project, at Flamanville in France, is already six years behind schedule and €7.2bn over budget.
Hinkley and Flamanville have focused attention on another looming challenge for EDF: has the company set aside enough money to cover the huge cost of dismantling and cleaning up its existing nuclear power stations in France?
Unlike the UK, where the state has assumed much of the financial risk of taking apart nuclear reactors, in France it all falls on EDF, which has established a €23bn special fund for this purpose.
The €23bn — much of it invested in equities and bonds — has been set aside to cover what EDF estimates will be the €54bn cost of decommissioning the 58 reactors and safely storing their radioactive waste. This includes €23bn for dismantling the power stations, and €26bn for managing spent fuel………..
EDF faces several major investments. As well as the £18bn Hinkley Point project, EDF is involved in bailing out reactor designer Areva by buying a controlling stake in its reactor business for €2.5bn. It is also extending the life of France’s existing nuclear power stations until 2025, at a cost of €55bn.
And it is not just the decommissioning of the 58 reactors that is of concern. The estimated cost of storing radioactive waste — potentially for thousands of years — has been steadily rising………..http://www.ft.com/cms/s/0/c82ae2c4-0582-11e6-9b51-0fb5e65703ce.html#axzz46IzsG72i
France committed to investing in Hinkley nuclear plant, even if it bankrupts EDF
French ‘committed’ to investing in Hinkley C nuclear plant Plymouth Herald April 17, 2016 By Kate Langston The French government is “completely committed” to building the Westcountry’s new nuclear power plant at Hinkley, the country’s ministers have confirmed.
In an interview with the BBC, the French economy minister Emmanuel Macron stressed the £18 billion project is “very important” to the French state, which owns 85% of energy firm EDF.He added that backers still need to finalise some “technical and industrial” aspects of the Hinkley C deal, but should be in a position to sign in a “week or more”.
The assurances from Mr Macron come less than a week after he sparked fresh fears for the Somerset-based development by announcing he had “not yet made a decision” about the investment.
They also follow the publication of a letter from the main union representing EDF workers stating the firm is “on the edge of bankruptcy”, and should not be risking billions of pounds in the UK……..
The original date for the generator to come online has been pushed back from 20203 to 2025, and the estimated cost has soared from £16 billion to between £18 and £24.5 billion…….
Mr Macron told journalists that Hinkley is “important for [France’s] commitment to nuclear energy”. “We back Hinkley Point project, it’s very important for France, it’s very important for the nuclear sector and EDF,” he said.
“Now we have to finalise the work, and especially the technical and industrial work, very closely with EDF, with the British government, to be in a situation to sign in the coming week or more.”
The EDF board was due to meet to make a final decision on its investment in Hinkley in January, but this was postponed and is now expected to take place in May.
But John Sauven, director of environmental pressure group Greenpeace which is opposed to the new plant, has accused Mr Macron of saying one thing to a UK audience “and another to the French”.
“He has made it abundantly clear in French that no decision has been made,” he told the BBC. “The reasons are clear: the costs are rising, the problems are mounting, and the opposition in France is growing.
“The alternatives are looking increasingly attractive no matter which language you speak.”……….http://www.plymouthherald.co.uk/French-committed-investing-Hinkley-C-nuclear/story-29126276-detail/story.html
EDF in America going for wind power, abandoning nuclear
EDF shows that wind makes better sense than nuclear,Ecologist Chris Goodall April 2016 EDF in the UK may be propelled by its disastrous nuclear ambitions, writes Chris Goodall. But across the Atlantic it’s another story: the company is the US’s biggest wind developer, and selling its power, profitably, for under 40% of the price it has been promised for Hinkley C, including federal tax credits…….
Within the same company, they do things very differently on the other side of the Atlantic; there EDF focuses wholeheartedly on wind and has no nuclear under development.
It has just proudly announced that it has become the largest wind developer in North America with a portfolio in 2015 of over 1 gigawatt of newly constructed wind farms.
If it continues at the current rate, it will be generating more electricity from wind by 2025 than would be provided by Hinkley Point C. The numbers are as follows. Hinkley will generate about 25 terawatt hours a year. EDF’s 2015 annual portfolio of new wind projects will provide about 3 terawatt hours a year at average US utilisation factors.
If it continues to develop new wind projects at the rate of 1 gigawatt a year, it will be generating well over 30 terawatt hours a year from wind by the end of 2025. 2025 is when EDF says Hinkley will be finished.
What about the capital cost of wind versus nuclear? The latest US estimates suggest a figure of about $1,700 per kilowatt of capacity. That means EDF’s projects completed in 2015 cost about $1.8bn. Over ten years, that rate of installation will mean a total cost of around $18bn or about £13bn. Wind is therefore at least 30% cheaper to construct.
And it is much cheaper to operate. The most important project it completed in 2015, the 250 MW farm at Roosevelt in New Mexico, has sold its electricity for the next 20 years to a utility for $23.39 a megawatt hour, less than 20% of the price agreed for Hinkley of £92.50/MWh.
Note that the Roosevelt price is somewhat subsidised by Federal tax credits but even without this benefit the cost of wind would be less than 40% of the price of UK nuclear. Wind saves consumers money when compared to the nuclear alternative.
It’s simple really: renewables are a better and more secure investment
EDF finances many of its US wind projects on the back of power purchase agreements with major companies such as Microsoft, Procter and Gamble and Google. They commit to buy the electricity produced at a fixed price, not the inflation adjusted figure that the UK will pay for Hinkley. The EDF press release said:
“Corporate America is increasingly turning to renewable energy to power its business operations, based both on consumer preferences and because renewable energy simply makes economic sense.”
We never hear this line from EDF in the UK.
EDF cannot guarantee the wind will blow or the sun shine. Unlike in Britain, its US business is also investing heavily in energy storage. The US company has announced 100MW of battery systems in the US because “Energy storage is an attractive, cost-effective addition to intermittent energy generation projects.” However there’s no mention of batteries on EDF’s UK web site.
For sensible reasons large international companies often pursue varied market strategies in different countries. EDF in the US has decided to back wind while the UK has gone for nuclear.
But even a quick look shows that the energy and financial returns to the US strategy seem far clearer and better for the company, and its customers, than the tactics of the UK business. http://www.theecologist.org/blogs_and_comments/commentators/2987489/edf_shows_that_wind_makes_better_sense_than_nuclear.html
Luxembourg would pay France to shut down all too near nuclear power station
Luxembourg offers France money to close nuclear plant http://en.rfi.fr/france/20160412-luxembourg-offers-france-money-close-nuclear-plant By RFI Luxembourg offered on Monday to chip in financing to close an ageing French nuclear power plant near its border, saying the tiny nation could be obliterated if the station malfunctioned.
During a press conference with his French counterpart Manuel Valls, Luxembourg’s Prime Minister Xavier Bettel said a problem at the Cattenom plant could “wipe the duchy off the map”.
“The Cattenom site scares us, there’s no point in hiding it,” he said of the plant that has been in operation since the mid-1980s. “Our greatest wish is that Cattenom close.”
Luxembourg “would be prepared to make a financial commitment to a project, which would have to be cross-border… at Cattenom that is not nuclear in nature.”
Valls — who was on a one-day visit to the nation of about 500,000 — said France has pledged to cut its reliance on nuclear energy from more than 75 percent to 50 percent by shutting 24 reactors by 2025.
“Message received,” he added.
Fessenheim houses two 900-megawatt reactors and has been running since 1977. Due to its age activists have long called for it to be permanently closed.
French President Francois Hollande has pledged to shut down the Fessenheim plant by the end of his five-year term in 2017.
France is dangerously ill-prepared to deal with a nuclear accident – report
France is ‘not prepared for a nuclear accident’, report says http://www.thelocal.fr/20160407/france-unprepared-for-nuclear-accident 
, according to a worrying new report, that the Swiss and Germans will want to read with interest.
- France’s oldest nuclear plant ‘to close this year’ (06 Mar 16)
- Germany demands France shut old nuclear plant (04 Mar 16)
- Swiss sue French over ‘dangerous’ nuclear plant (03 Mar 16)
That’s the conclusion of a new report by France’s ANCCLI commission that reports on the state of the country’s nuclear facilities.
“France is not ready to face a serious nuclear accident,” warned the commission’s president Jean-Claude Delalonde. “Even though a national response plan was made public in February 2014, nothing has been put in place,” he said.
The report comes after both Switzerland and Germany have expressed concerns about the safety of some of France’s 19 nuclear power stations, with authorities in Geneva even launching legal action.
According to Delalonde’s association the French government has not learned the lessons from previous disasters like Chernobyl that was presented as a “Soviet” accident.
The Fukushima disaster in Japan prompted the French to improve certain safety measures around nuclear reactors but ANCCLI want more.
They want the “emergency zone” around nuclear power stations, where measures are put in place in the event of accident, extended from the current 10km radius to 80 km.
The fact this hasn’t been done already creates a dangerous situation for Europe, the report says.
For example France distributes iodine tablets, which protect against the potentially cancer-causing effects of radioactivity, to those living within the 10km radius of a nuclear reactor, but in Belgium the same measure is taken within a 20km radius.
After Fukushima, the radius was extended to between 20km and 50km in Switzerland. The entire state of Luxembourg is part of an emergency zone even though there are no nuclear power stations on its territory. It’s due to the fact the Cattenom reactor in France is close to the border.
The duchy has previously forwarded to the European Commission a study commissioned by Germany’s Greens party, which according to Luxembourg “listed the Cattenom plant’s security problems”.
ANCCLI wants French authorities to work out a plan and carryout “digital simulations” for how Iodine tablets would be distributed to the whole of France before a radioactive cloud passes and also how the population would be evacuated in the event of a disaster.
The extent of the problems France would face in the event of a disaster are made clear by the fact more than 1.25 million people live within 30km of the Bugey power plant near Switzerland and over one million live around the Fessenheim power station – the oldest in the country.
Delalonde points out that India’s contingency plans are far more developed than they are in France.
“They anticipate the amount of food that will be needed, the number of emergency beds needed, blankets and even how many saris would be needed,” he said.”This power plant is very old, too old to still be in operation,” said a spokesman for Germany’s Environment and Nuclear Safety Minister Barbara Hendricks.
Meanwhile, the Swiss canton of Geneva on Wednesday filed a complaint against French nuclear plant Bugey located in the neighbouring French region of Ain, claiming that it “deliberately puts in danger the life of others and pollutes the waters”.
France suggests UK’s Hinkley Point nuclear project could still be postponed
Hinkley Point nuclear project could still be postponed http://www.theweek.co.uk/60778/hinkley-point-nuclear-project-could-still-be-postponed
Delaying £18bn development is ‘up for discussion’, says France’s Segolene Royal Plans to build the world’s most expensive nuclear power station at Hinkley Point, near Somerset, could hit further delays, a French government official has hinted. Speaking during a radio interview this week, ecology minister Segolene Royal was asked whether the £18bn project, which is two-thirds funded by French state-backed energy giant EDF, would be postponed. She responded by stating simply that it is “still under discussion”, says The Guardian.
“There’s an agreement between France and Britain so things should go ahead. But the trade unions are right to ask for the stakes to be re-examined,” Royal said.
In particular, there should be “further proof” that the venture would not affect investment in renewable energy, she added.
Last week, the Financial Times reported that a group of senior engineers at EDF had circulated a white paper among executives calling for a delay of at least two years to overcome deficiencies in design and the “very low” competency of fellow state-owned reactor supplier, Areva. Board member and employee director Christian Taxil has also publicly called for the plans to be postponed.
Supporters for the deal include the British government, which has staked its reputation on Hinkley Point as the core part of its carbon-light energy strategy for future decades, and French economy minister Emmanuel Macron, who has said it will almost certainly get approval at an EDF investor meeting next month.
The incentives for the company are long-term and come in the form of an energy price guarantee that is almost three times current wholesale prices. A new agreement also offers £20bn protection against a future UK government pulling the plug.
The FT reports that 100 EDF engineers also responded to their colleagues concerns by issuing an open letter stating that the company can “build and deliver the two Hinkley Point reactors on time”.
EDF senior engineers call for delay in UK Hinkley nuclear power development
Dissenting EDF engineers urge delay to Hinkley nuclear project Complexity makes completion date unrealistic, argues report, but French group sticks to timetable Ft.com : By Michael Stothard in Paris, 29 Mar 16,
Senior engineers at French utility EDF have called for at least a two year delay at the controversial Hinkley Point nuclear project in the UK and recommended a redesign of the reactor technology.
An internal white paper written by dissenting EDF engineers, which has been seen by the Financial Times, argues that Hinkley Point is so complex and untested that the company should announce a later completion date than the target of 2025.
The paper, circulated among top executives, said that the “realistic service date was 2027” due to the size of the project, continuing design modifications to the European Pressurised Reactor system and the “very low” competency of French supplier Areva in making some of the large components……..
The unsigned white paper was written after Mr Piquemal’s resignation by a group of senior engineers and other dissidents, according to people with knowledge of the document. The company plans to make the final investment decision on the project at a board meeting on May 11……..
The paper also addresses wider fears that the Hinkley project will in any case not be completed by 2025 and might suffer years of construction delays.
One person on the EDF board who had read the white paper said: “Few believe that we can build this [Hinkley Point] by 2025 any more.”…….
Three people close to the company said that CGN, EDF’s Chinese partner for Hinkley, also feared possible delays, attempting to insert a clause so it would take on a lower financial risk if there were a large problem.
In the case of a £5bn cost overrun, despite EDF having a 66.5 per cent stake in the project, EDF would be liable for 80 per cent of the additional costs, according to a document sent by the EDF finance department to the board’s audit committee in January…….https://next.ft.com/content/2ef61abe-f5b1-11e5-96db-fc683b5e52db
Years more delay for EDF’s Flamanville nuclear power station
EDF’s French nuclear plant faces years of further delay, Ft.com 20 Mar 16 Kiran Stacey and Tom Burgis EDF’s new nuclear power station in France faces years of further delays if tests confirm that the steel used in its reactor is flawed, the country’s atomic watchdog has warned.
It is one of the clearest signals to date of the scale of the setback faced by the French utility. The flagship plant at Flamanville in Normandy has already been subject to years of delays and cost overruns, which have made it difficult for EDF to fund the identically designed £18bn reactor at Hinkley Point in the UK — a key element in Britain’s energy strategy.
Initially, Flamanville was expected to cost €3.3bn and start operations in 2012 — it is now planned to start in 2018 at a cost of €10.5bn.
But Julien Collet, the deputy director of France’s Nuclear Safety Authority, has said that it could be delayed further by several years, depending on the results of tests started last year and due to end this summer on the steel being used in the reactor core.
If the steel fails the tests, regulators could order EDF to rip out and replace the top and bottom of the reactor vessel. Mr Collet told the Financial Times: “It takes a lot of time to build new components like this — we’re talking years.”……
The concerns over the steel used in the Flamanville plant are only the latest in a string of misfortunes at that project and another in Finland, both of which use Areva’s European Pressurised Reactor, or EPR, model.
These delays have caused difficulties for EDF’s contentious new project at Hinkley Point in Somerset, which was originally planned for 2017 but is now set to be built by 2025…….
EDF was thrown a lifeline last week, however, when Emmanuel Macron, the French economy minister said his government would recapitalise the company if necessary.
But executives will come under scrutiny on Wednesday when they are grilled in Westminster about Hinkley Point by MPs on the cross-party energy select committee. http://www.ft.com/intl/cms/s/0/73d62552-ec65-11e5-bb79-2303682345c8.html#axzz43g9nsyxB
AREVA’s huge loss on Finland nuclear project
Areva Posts 2.04 Billion-Euro Loss on Finnish Project http://www.bloomberg.com/news/articles/2016-02-25/areva-delays-results-by-24-hours-after-securing-bridge-loan, 25 Feb 16 Francois De Beaupuy
The company, 87 percent owned by the French government, had a net loss of 2.04 billion euros in 2015 after a loss of 4.83 billion euros a year earlier, the company based near Paris said Friday in a statement. It took a 905 million-euro charge related to the Finnish power station project due to extra operating costs and the “probable impact” of further discussions with the customer to settle the disputes over the project and bring it to completion.
Areva said it expects negative net cash flow from operations in 2016 in the range of 1.5 billion to 2 billion euros, due partly to expenses to be incurred on large projects and an unfavorable change in working capital requirements.
As a result, Areva’s credit rating was downgraded in December by Standard & Poor’s to B+, four steps below investment grade. Shares of the company have dropped 32 percent this year, extending a drop of 40 percent in 2015. The company delayed its earnings report by one day in order to finalize a bridge loan.
EDF has said it will buy a majority stake in Areva’s reactor unit provided it’s not exposed to the Finnish atomic plant project.
EDF’s Flamanville nuclear power project – ever more delays
EDF’s French nuclear plant faces years of further delay,Ft.com, 20 Mar 16 EDF’s new nuclear power station in France faces years of further delays if tests confirm that the steel used in its reactor is flawed, the country’s atomic watchdog has warned.
It is one of the clearest signals to date of the scale of the setback faced by the French utility. The flagship plant at Flamanville in Normandy has already been subject to years of delays and cost overruns, which have made it difficult for EDF to fund the identically designed £18bn reactor at Hinkley Point in the UK — a key element in Britain’s energy strategy.
Initially, Flamanville was expected to cost €3.3bn and start operations in 2012 — it is now planned to start in 2018 at a cost of €10.5bn.
But Julien Collet, the deputy director of France’s Nuclear Safety Authority, has said that it could be delayed further by several years, depending on the results of tests started last year and due to end this summer on the steel being used in the reactor core.
If the steel fails the tests, regulators could order EDF to rip out and replace the top and bottom of the reactor vessel. Mr Collet told the Financial Times: “It takes a lot of time to build new components like this — we’re talking years.”
The difficulties EDF is having with the steel at Flamanville have been caused by problems with the process of cooling and cutting a 450-tonne ingot of steel, which created an area the size of a dinner plate that was slightly more brittle than it should have been.
Areva, the French nuclear company in whose reactor business EDF is due to take a controlling stake, is working with regulators to test an identical piece to determine if it could lead to weakness in the reactor vessel.
The problem was discovered in late 2014 but EDF opted to push ahead with construction, potentially making it much more difficult to replace the faulty steel if needed……..
having agreed to fund 66.5 per cent of the [UK’s Hinkley Point C nuclear] project last year, EDF has delayed giving it final approval, with some at the top of the company arguing more investors should be brought in first.
Finding outside investment has been difficult because of the problems being experienced with other EPRs in France and Finland, according to senior people within the company………http://www.ft.com/intl/cms/s/0/73d62552-ec65-11e5-bb79-2303682345c8.html#axzz43TzEfz49
UK Members of Parliament to question EDF executives about Hinkley nuclear project financing
EDF Energy to be grilled by MPs over Hinkley Point C nuclear power plant , City AM. 17 Mar 16 EDF Energy will be grilled by a group of MPs next week over the controversial Hinkley Point C nuclear power plant in Somerset.
EDF’s chief executive Vincent de Rivaz, and managing director of new nuclear build Humphrey Cadoux-Hudson, will appear before the energy and climate change select committee on Wednesday.
It comes as French economy minister Emmanuel Macron pledged fresh financing for the £18bn project during a visit to a nuclear power plant there today.
EDF has been forced to defend Hinkley after its chief financial officer Thomas Piquemal resigned over the huge costs. It subsequently sent a letter to employees reiterating confidence that the project will go ahead.
“The hearing will give EDF Energy an opportunity to answer the committee’s questions on the investment plans for a new nuclear power station at Hinkley Point C in Somerset,” it said in a statement today……..http://www.cityam.com/237033/edf-energy-to-be-grilled-by-mps-over-hinkley-point-c-nuclear-power-plant
France’s auditor brands Hinkley Point nuclear project as financially risky
Hinkley Point branded potentially risky for EDF by French auditor, Guardian 11 Mar 16
Cour des Comptes urges greater study of nuclear project’s risks given poor recent investments and the fact EDF must fund likely cost overruns. EDF’s £18bn project to build nuclear reactors in Britain is potentially risky for the state-owned utility, whose foreign investments in recent years have proved disappointing, France’s top public auditor has said.
In a report on EDF’s international strategy, the Cour des Comptes – the French equivalent of the UK’s National Audit Office – said EDF and its 85% state shareholding should take a close look at the risks associated with the project to build two nuclear reactors at Hinkley Point in Somerset.
The report, which focuses on the 2009-2014 period – which includes EDF’s October 2013 agreement with the British government but not its deal in October 2015 with the Chinese utility CGN to take a one-third stake – said the financing around the Hinkley Point deal was potentially risky for EDF.
The auditor said EDF’s cashflow and high debt limit its capacity to invest abroad, especially given the huge sums needed to upgrade its ageing French nuclear plants.
“Even though the [Hinkley Point] deal has not been finalised, the complexity of the deal and especially the way it could impact the responsibility of EDF suffice to raise serious questions,” the auditor ……..http://www.theguardian.com/business/2016/mar/11/hinkley-point-risky-edf-french-auditor-cour-de-comptes?CMP=share_btn_tw
EDF want French tax-payers’ financial aid for UK Hinkley Point Nuclear Projectr
EDF Asks French Government for Aid for Hinkley Point Nuclear Plant CEO Jean Bernard Levy says EDF won’t engage in project without necessary commitments from state http://www.wsj.com/articles/edf-asks-french-government-for-aid-for-hinkley-point-nuclear-plant-1457797452 By INTI LANDAURO March 12, 2016
PARIS— Electricité de France SA Chief Executive Jean-Bernard Levysaid he is seeking financial support from the French government to develop the Hinkley Point nuclear plant in southern England, as the project faces fierce scrutiny following the resignation of the company’s No. 2.
In a letter sent to company employees on Friday, Mr. Levy said EDF wouldn’t engage in the £18 billion ($25.89 billion) project unless it was able to secure necessary financial commitments from the state, which holds almost 85% of the utility.
Two EDF officials who requested anonymity confirmed Mr. Levy’s comments. The letter was sent four days after Chief Financial Officer Thomas Piquemal quit unexpectedly on concerns that the project would threaten the company’s financial stability.
The Hinkley Point project is the centerpiece of a series of business deals between the U.K. and China announced last year, with China General Nuclear Power Corp. agreeing to take a 33.5% stake in it.
The past week’s letter and CFO resignation are signs that scrutiny over the project has grown, despite support from the French and U.K. governments.
Even though the conditions granted by the U.K. government—with the pledge to buy the electricity generated around three times the current market price—would make it profitable, union representatives on EDF’s board have said Hinkley Point could saddle the company with too much debt.
EDF, which has €37.4 billion ($41.70 billion) in net debt, had its credit rating put on review for a downgrade by Moody’s Investors Service last month. Also last month, EDF said it would reduce its dividend and offer stockholders part payment in shares to bolster its finances, as well as selling assets and reducing capital spending. The utility is separatelyinvolved in the financial rescue of state-controlled Areva SA, which has lost money for the past five years. EDF last year agreed to pay at least €1.25 billion for a majority stake in Areva NP, the unit that manufactures nuclear reactors.
Separately, the risk associated with the construction of EDF’s EPR reactor design also raises uncertainty about the project. To this day, no plants using the technology have been completed. The first two being built, in Finland and in northern France, have run way over budget and are years behind schedule.
Write to Inti Landauro at inti.landauro@wsj.com
How EDF taught Britons to love nuclear power, especially targeting women
Targeting women In 2012 EDF began a publicity campaign in the UK to soften up the public, which was predominantly anti-nuclear, including paying for editorial in women’s magazines because its market research found that women were more like to oppose nuclear power than men.
A complaint I made to the Advertising Standards Authority was upheld, regarding the use of advertising from EDF that was not labelled as advertising and looked like editorial, in Marie Claire – the “magazine for women who want to think smart and look amazing”. The articles were provided by EDF, under the headline “Nuclear power: the facts”, but contained inaccuracies.
Even after the ASA ruled in my favour, EDF still continued making dubious claims in the pages of the magazine, such as that in the 2030s “nuclear reactors in Somerset and Suffolk could supply around 40 per cent of the country’s energy needs”.
In its dreams, maybe. because even while this was going on the French National Audit Office had recommended abandonment of the EPR as too complex and expensive.
“The problem is, politicians like big projects. By contrast, energy efficiency, although much more beneficial, is almost invisible, and is certainly lots of small projects.”
And energy projects don’t come much bigger than nuclear power. As Jimmy Cliff might have put it: “the bigger they come, the harder they fall.”
The mystery of Britain’s love affair with new nuclear, The Fifth Estate, David Thorpe | 8 March 2016
Electricite de France’s chief financial officer Thomas Piquemal has resigned after opposing the announcement next month of a final investment decision on building a new nuclear reactor at Hinkley Point C in the UK.
EDF shares immediately dropped in value and further questions are being asked over the wisdom of proceeding with the plant, which would be the first new nuclear power station to be built in the UK in two decades. It was originally planned for completion in 2017 and is now unlikely to be built until at least 2025 – if ever. Continue reading
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