“It is not too late, we can force the government to withdraw and the management of EDF to change its mind,” said Sébastian Menesplier of the often militant CGT union.
EDF, which was founded after World War II, began building its 58 nuclear reactors in the 1960s and 1970s, in part in response to the oil crisis which was pushing up the price of electricity.
Today, it faces another upheaval as the French state, which owns 83.5% of EDF, tries to ensure that the company has the financial resources to both support its nuclear branch and invest in renewable energies. France plans to reduce the share of its electricity production due to nuclear power from more than 70% today to 50% by 2035. This will include the closure of 14 reactors.
EDF’s plan, known as the Hercules Project, will create as it stands a public parent company, EDF Bleu, containing the nuclear assets as well as a hydroelectric subsidiary. Its other subsidiary, EDF Vert, will house renewable energies, networks and service activities and will be listed with around a third sold to raise investment funds.
The idea of splitting EDF has been under discussion for several years. In 2016, while President Emmanuel Macron was Minister of the Economy of France, he proposed such a project. And in 2017, the former Minister of the Environment Nicolas Hulot said that the governance of the group may have to change.
The EDF unions, which remain very powerful, oppose the plan. “Dividing EDF in this way will mean the end of the group,” Menesplier said.
But time is running out, despite the unions’ conviction that they can still force the withdrawal of EDF and the State. According to people familiar with the matter, after lengthy negotiations, an agreement with Brussels on Hercules could be announced before the end of the year, as could a regulated nuclear price in France, which is a necessary part of the restructuring plan.
This new regulated price is seen as the counterpart of the change in the group’s structure, intended to reassure Brussels that state-sponsored nuclear power will not distort competition in other parts of EDF.
EDF is under funding pressure because it has to pay for the upgrade of its existing nuclear reactor fleet – estimates for the maintenance and modernization costs of the fleet have been raised this year from 45 to 49.4 billion euros up to ‘in 2025.
It faces over-budget next-generation reactors under construction at Hinkley Point in the UK and Flamanville in France, the latter also being several years behind schedule. EDF will unveil a cheaper update to its European pressurized reactor by the middle of next year.
Each strike puts additional pressure on France’s power supply, which is already creaking at the start of winter, and after the coronavirus pandemic, repair work on some reactors has been halted.
The government is also under political pressure to ensure that the EDF reform is correct. Although Mr Macron recently said nuclear power will remain essential, he has postponed any decision on new nuclear power plants in France until the end of 2022 and does not want to face protracted union protests.
In order to give a boost to its plans to continue building nuclear power plants, the UK government confirmed on Monday that it will begin formal negotiations with EDF on how to finance Sizewell C, a £ 20 billion nuclear power plant. proposed for the east coast of England.