EDF's Miniere Says Hinkley Point Risks Have Been Mitigatedby
Final investment decision on nuclear plant may come in weeks
Delaying the project would carry greater risks for company
Electricite de France SA has mitigated financial, technical and governance risks of its plan to build two nuclear reactors at Hinkley Point in the U.K. with a Chinese partner, paving the way for the French utility’s board to make a final decision on the 18 billion pound ($26 billion) project.
“The final investment decision should be taken before the board in coming weeks,” Dominique Miniere, EDF’s head of nuclear and thermal power generation, said Thursday at a conference in Paris. EDF’s chief executive officer believes “the risks of delaying are greater than the risks of not doing so, given the mitigating measures” that the company has introduced, Miniere said.
There has been speculation about the future of Hinkley Point since EDF’s Chief Financial Officer Thomas Piquemal resigned this month amid concern the project would put the company under too much financial strain. Falling power prices are threatening EDF’s earnings and it needs to invest 50 billion euros ($57 billion) by 2025 to renovate its fleet of French atomic reactors.
Power prices have fallen mainly because of lower coal, gas and oil costs and those commodities will eventually rebound as producers trim investments, Miniere said. It’s important to go ahead with the Hinkley Point project because it will help the French nuclear industry rebuild its know-how, which has been undermined by a long lull in plant construction and project delays, he said.
EDF board member Christian Taxil, who’s sponsored by the CFE-CGC union, said in a letter to employees seen by Bloomberg Wednesday that he plans to vote against the Hinkley Point project because of the company’s “tight” financial situation. A British government guarantee that EDF will earn at least 92.50 pounds a megawatt-hour over a period of 35 years at Hinkley Point may not be good enough if it doesn’t come with a guarantee on sales volumes, because the French company’s atomic power may be progressively displaced by mounting renewable-energy capacity.
EDF labor union representatives have been asking for a delay of the project since the start of the year, to give time for the company to finish the construction of nuclear plants in France and China and to take control of Areva SA’s reactor unit.
That plea has been rejected by French Economy Minister Emmanuel Macron and EDF Chief Executive Officer Jean-Bernard Levy, who are working on a plan to shore up the group’s finances with a view to taking a final investment decision on Hinkley Point before the group’s annual shareholder meeting scheduled for mid-May.
Levy believes that delaying Hinkley Point would jeopardize the U.K. government’s support for the project, Miniere said.