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Energy policy/Electricité de France (EDF)/United Kingdom

Published on March 31, 2016
Hearing of M. Emmanuel Macron, Minister of the Economy, Industry and the Digital Sector, before the National Assembly Economic Affairs Committee (excerpts)

Paris, March 22, 2016


There’s still the final decision which has to be taken by EDF on Hinkley Point and which is giving rise to many concerns. The decision will probably not be made official on 30 March, but, more reasonably, at the beginning of May, i.e. before EDF’s General Assembly and in a timeframe which allows our British partners to have complete visibility on this critical investment, ahead of the important decisions they’re preparing for. We need time to work on a set of measures which go beyond just the Hinkley Point project.

Let me remind you that this is a project promoted and supported by the company’s last two executive committees and the government, in a manner consistent with our energy strategy, in which nuclear energy retains a predominant share and is still destined, for the next 10 to 15 years, to account for roughly 50% of our energy production.

Not only does nuclear energy form the basis of our energy sovereignty, it’s an industry which offers us important job-creating international markets, bringing industrial benefits for the country. The developed world’s main nuclear project today is Hinkley Point. Can we legitimately decide that investing in it isn’t a good choice? I, for one, don’t think so. The coherence between our energy strategy, our industrial strategy and the strategy of the company requires this to be done, but in an organized framework with all necessary visibility regarding the project’s financial feasibility.

Hinkley Point accounts for 15% of EDF’s planned investment over the next few years. It must take its place next to investment in renewable energy, investment needed for major streamlining, the acquisition of Areva NP and all the projects which are going to necessitate a total annual investment of €11 to 15 billion.

The first actual disbursements won’t take place until the end of 2018 or the beginning of 2019. In view of this, the British government has committed to EDF and the French state to acquire the electricity produced at a guaranteed price for 35 years. This commitment has been validated by the European Commission. It enables us to secure the project’s profitability for 60 years, at around 9% a year. So beyond the short-term financial difficulties, Hinkley Point is a good long-term industrial and financial investment. Every energy producer is on the lookout for such a project…

Finally, let’s remember it relies on entirely French technology, even though the production won’t be carried out entirely in France, because we have partners in this business such as the Chinese and Japanese. For example, the latter will manufacture the reactor vessel – a sensitive issue if ever there was one –, which therefore won’t have the same characteristics as that of Flamanville.

Before taking its final decision, EDF must ensure all the conditions are met for profitability and risk control. The state, in its capacity as shareholder, will be especially mindful of this. The cost of construction is estimated at €10.5 billion per tranche. (…)./.

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