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France says EDF's stalled UK nuclear project will go ahead

© EDF Energy | An artist's impression of the reactors EDF is due to build at Hinkley Point, southwest England.

Text by FRANCE 24

Latest update : 2016-04-25

In a bid to quell rumours that French energy giant EDF would stall indefinitely a project to build two nuclear reactors in the UK, French Economy Minister Emmanuel Macron said Sunday that the green light would be given in September.

In an interview with Sunday paper Le Journal du Dimanche, Macron said French President François Hollande had “confirmed France’s engagement” in the project and that the “final decision will be given in September”.

Asked if the decision would be delayed beyond the summer – the deal was signed by David Cameron in October, 2015 and a final green light was expected on May 12 – Macron insisted it was in everyone’s interest to get the much-delayed project rolling as soon as possible.

“Even with the latest contract, the reactor will not be operational until 2030,” he told the newspaper. “The British can’t wait any longer; otherwise they will be forced to choose one of our competitors.”

Just last week, Macron told the BBC that the go-ahead would be given in the “coming weeks or month”.

EDF's debt mountain

Hinkley Point C in Somerset, southwest England, is due to be built by EDF in partnership with the China General Nuclear Power Corporation (CGN).

It will be Britain's first nuclear power plant to be built in decades and is expected to provide seven percent of the UK’s energy needs when it becomes operational.

With a projected cost of 23 billion euros, it would also be one of the world's most expensive nuclear power plants. And while the British government says it would guarantee the price of energy the reactors produce for 35 years, the plunging wholesale cost of electricity puts this commitment in doubt.

Questions have been raised about the financial viability of the project as EDF is struggling with a debt pile of more than 37 billion euros.

On Friday, the French government announced that it would inject three billion euros into the energy provider, as part of a four-billion-euro capital increase. The French state owns 85 percent of EDF.

‘We need three years, not three months’

France’s powerful unions, which have representatives on EDF’s board, are not convinced that the capital injection is enough to quell fears over the Hinkley project.

Jean-Claude Mailly, head of the Force Ouvrière union, told France 3 TV on Sunday that EDF’s position was still too weak and that Macron was rushing the company into commitments it could not honour.

“For financial as well as technical reasons, we need three years and not three months,” he said. “Emmanuel Macron is trying to rush this through much too quickly, and the consequences could be disastrous.”

EDF’s leadership has been more upbeat. In a statement released Friday, the company insisted: “Confirmation of the significant recapitalisation of EDF agreed by the board makes it possible for EDF to proceed with its strategic investment programme – including Hinkley Point C.”

It added: “Today’s announcement underlines EDF’s solid commitment to its CAP 2030 [investment] strategy including the Hinkley Point C project and has provided it with a solid financial footing notwithstanding the challenges of current market conditions.”

‘A grinding halt’?

Not everyone in the French government is convinced that the Hinkley Point project is a viable proposition for state-owned EDF.

Jean-Vincent Placé, a Green Party lawmaker who is junior minister for state reform, told Europe1 radio the project was “strategic dead-end” for EDF.

“And I’m not the only person who thinks so,” he said, pointing out that Thomas Piquemal, EDF’s chief financial officer, resigned in February, warning that Hinkley Point could threaten the company’s future.

“Even the unions at EDF, which have always been extremely pro-nuclear, do not believe we should be investing in something so strategically uncertain,” Placé said. “EDF’s money, which is French taxpayers’ money, should be invested in developing renewable energy instead.”

Greenpeace, which opposes the creation of new nuclear power stations and said it would make a legal appeal to the European Commission against France investing in the Hinkley Point reactors, said the confusion over EDF’s commitment was a sign that the project was coming to a “grinding halt”.

“Delays to EDF making a decision about whether to invest in Hinkley are nothing new,” Greenpeace director John Sauven told British daily The Independent. “It’s been 14 months since it was first said that the decision would be coming imminently. But this latest delay from EDF is different. President Hollande, the French economy minister and EDF’s CEO have all very publicly promised the UK government a final decision before 12 May.”

“Backtracking on this pledge now is symbolic of the utter mess that EDF is in,” he added. “This may now be the sign that the entire project is coming to a grinding halt and the UK government urgently needs to back renewable energy as a more reliable alternative.”

Date created : 2016-04-24


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