French energy company EDF is facing mounting pressure as its workers go on strike today - the third time in as many weeks - over a plan to drastically change the structure of the nuclear-focused, largely state-owned group.
Bugey nuclear power plant, Saint-Vulbas, France. Credit: Jessica Gardner / Flickr
Bugey nuclear power plant, Saint-Vulbas, France. Credit: Jessica Gardner / Flickr
“It’s not too late, we can force the government to pull back and the management of EDF to change its mind”, said Sébastian Menesplier of the CGT trade union.
EDF was founded following the second world war and began constructing its 58 nuclear reactors during the 1960s and 1970s, partly as a response to the oil crisis of the time, which was driving up energy costs.
The French state owns 83.5% of EDF and is aiming to ensure the company has the capital to support both its traditional nuclear business as well as investments in renewables.
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France is planning to cut the proportion of power generated by nuclear from 70% today to 50% by 2035, which would involve the closure of 14 reactors.
The plan - named Project Hercules - will involve the formation of a new state-owned mother company, EDF Bleu, which would contain the nuclear assets as well as a hydroelectric subsidiary.
EDF's other subsidiary, EDF Vert, will contain renewables, the networks and services and will be listed with around one-third sold to raise funds for investments.
THe idea of breaking the company up has been the subject of discussion for some years in France. In 2016, when President Emmanuel Macron was France's economy minister, he floated the idea. In 2017, Nicolas Hulot, a former environment minister, said there would need to be changes to the group's governance.
Labour unions representing EDF workers, however, vociferously oppose the plan. “Splitting EDF up like this will spell the end of the group," said Menesplier.
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Nonetheless, reports are suggesting that time is running thin, despite the unions' insistence that they can force both EDF and the government into a u-turn. There have been reports that long-running negotiations between Paris and Brussels on the subject of Project Hercules are nearing completion, with the possibility of an announcement before the end of the year. Such a deal with the EU would also involve regulation of the price of nuclear energy in France.
The regulated price is being seen as the "quid pro quo" for the restructuring of the group, the shape of which is designed to reassure Brussels that nuclear energy subsidised by the state will not distort competition in other parts of EDF.
The Group is also under further pressure to finance the necessary upgrades to the fleet of nuclear reactors, which are estimated, along with maintenance, as €45 billion this year, top €49.4 billion through to 2025.
EDF is also dealing with over-budget next generation reactors currently under construction in Flamanville, France, and Hinkley Point in the UK. The Group has said it will release a cheaper update to its reactor by mid-2021.
With each workers' strike, further strain is put on France's energy supply, which is already under pressure as winter begins and essential maintenance has been delayed due to the coronavirus.
There is immense pressure on President Macron and his government to get any reform of EDF right. Whilst having said that nuclear energy will remain key, the president has put off any decisions on constructing new nuclear plants until the end of 2022 - six months after the general elections.
Read more: UK enters talks to fund Sizewell C nuclear plant
In a boost to the Group's nuclear plans, the UK government recently announced that it would begin formal negotiations with EDF over the funding of Sizewell C, a proposed £20 billion nuclear plant for the east of England.
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