Jean-Bernard Lévy, chief executive of the French state-owned company EDF, is now facing huge risks as he tries to move towards a final investment decision for the Hinkley Point C project in Somerset.
The project is a key part of the UK’s energy development to move towards a low carbon and reliable electricity generation system, as the aging civil nuclear and coal powered fleet is replaced with new gas fired combined cycle plant and the next generation of nuclear reactors.
A letter sent to the company’s staff admits the “tense” financial situation at EDF and the potential danger to a scheme that is at the centre of British energy policy, with Lévy saying: “We are negotiating with the French state to obtain commitments allowing us to secure our financial position. It is clear that I will not engage in this EDF project as long as these conditions are not met.” Also explaining why he was taking the usual step of addressing staff he said: “In recent weeks, our group is the subject of much debate, especially around the renewal of our nuclear fleet and the construction of two EPR [European pressurised reactors] in the UK at Hinkley Point C.
Pressure on the EDF boss has increased in recent weeks with the Hinkley project director, Chris Bakken resigning, whilst EDF’s financial chief, Thomas Piquemal, warned on the potential impact from financial risks to the company from the project, before he also resigned.
The company’s chief executive has indicated a positive decision on the project is reliant on further funding from the French government whilst external sources have said construction risk is a key issue for the project. They cite the major delays and cost overruns for the new reactor projects at Flamanville in Normandy and Olkiluoto in Finland. Politically however, critics suggest that both countries need the project to go ahead, both to demonstrate the technology and to provide the UK with a key contribution to low carbon power needed to meet international commitments and secure electricity supply.