EDF’s chief executive, Jean-Bernard Lévy, has warned the French government that without further financial backing, the entire Hinkley Point project risks being in jeopardy, despite claiming he feels “confident” that the plan will go ahead.
Questions over the viability of the project have been being raised with ever increasing frequency lately, particularly after the resignation of the energy giant’s chief financial officer, Thomas Piquémal. Piquémal left following disagreements with Lévy over whether or not to push forward the final investment contracts for the project. Piquémal was calling for a delay of at least three years, by which point, he claimed, EDF’s finances would be in a better position to be able to handle the burden of building the reactors in Somerset as well as tending to the existing nuclear fleet in France. Lévy wanted to push ahead much sooner.
EDF’s finances have been troubling of late, with debt levels rising and share prices falling.
The French auditing body, Cour des Comptes, recently released a somewhat damning report on EDF’s financial profile as it applies to the Hinkley plans, branding the project as risky and saying: “even though the [Hinkley investment] 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 deal referred to here is the agreement reached with Chinese energy company CGN to provide backing in return for a stake of around a third in the project. Final contracts cementing this investment are yet to be signed.
And now, Lévy appears to be more or less holding the government to ransom over the project.
He said, in a letter to his staff: “We are negotiating with the state to obtain commitments allowing us to secure our financial position. It is clear that I will not engage in this EDF project as long as these conditions are not met.
He described the company’s financial situation as “tense”, but maintained that “Hinkley Point C has the support of the French government and the British government, which places it at the heart of new nuclear energy policy. The UK needs to secure its supply of electricity and decarbonise its energy mix.”
Support from the British government comes in the form of a subsidised guaranteed price for electricity produced at Hinkley of £92.50 per Megawatt hour. Lévy said that he was “convinced of the robustness of the guaranteed selling price, approved by Brussels”.
Overall, Lévy said that he is “sure that this project is a good project for the group and that in the near future, all the conditions will come together for it to be definitely launched.”
Emmanuel Macron, the French economy minister, said that he was full confidence in Lévy.
Late last week, Japanese prime minister Naoto Kan weighed in to the debate, arguing that nuclear power as a whole should not be pursued; that it is overall a dangerous technology and that renewable energy should be pursued wholeheartedly in its stead. He was speaking on the anniversary of the Fukushima disaster, when the Japanese nuclear power plant was ravaged by a tsunami.
He said to the Guardian: “Nuclear power is not safe. In the worst case scenario up to 50 million people would have had to be evacuated. Nuclear power is not a suitable technology and renewable power is much better.”
