In this week’s Gossage, our columnist discusses the renationalisation of Electricité de France (EDF), and why it could be because the company is running out of cash.
The French government is to spend £20 billion buying back the final 16% of Electricité de France (EDF) shares still privately owned, bringing the company back under public ownership. Why are they renationalising this company? The answer is simple. It is to avoid EDF going bankrupt.
Right now, over half (29 out of 56) of EDF’s French nuclear reactors are currently offline. The company is already hugely indebted and faces a massive bill of up to 100 billion euros (£85 billion) to keep its ageing nuclear fleet going. And EDF’s flagship EPR reactor is over-cost and over-time everywhere it is being attempted to be built.
Aside from its debts, EDF has faced issues with ageing reactors, after experts warned President Macron of significant corrosion safety problems in EDF nuclear power plants in France as cracks were detected in the cooling systems of some nuclear reactors. Meanwhile there is delay after delay in bringing online every one of the EDF flagship nuclear reactors, in Finland, in France, even here in Somerset.
In desperation to help fund its latest lossmaker at Sizewell, Suffolk, EDF is reaching out to fellow utility giant Centrica for help. Could this be the same Centrica, which in 2016 abandoned plans to invest in EDF’s Hinkley C partly because of ‘the lengthening time frame for a return on the capital invested in a project of this scale’?