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EDF workers strike in France as plans to reshape energy group advance

EDF

EDF workers strike in France as plans to reshape energy group advance

Workers down tools in protest against planned restructuring of nuclear-focused group

EDFs nuclear power plant at Flamanville, France, where the construction of a next generation reactor is badly over-budget and years behind schedule © Bloomberg

Pressure is mounting on EDF as workers in France downed tools on Thursday for the third time in three weeks, striking against a plan to radically alter the structure of the nuclear-focused and state-backed group.

“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 from the often militant CGT trade union.

At midday on Thursday, 24 per cent of EDF workers in France were on strike, the company said.

EDF, which was founded after the second world war, began building its 58 nuclear reactors during the 1960s and 1970s, in part in response to the oil crisis, which was driving up the price of power.

Now it is facing another shake-up as the French state, which owns 83.5 per cent of EDF, tries to make sure that the company has the financial resources to both support its nuclear arm and to invest in renewables. France plans to reduce the proportion of its electricity generation accounted for by nuclear power from more than 70 per cent today to 50 per cent by 2035. This will include closing 14 reactors.

The plan for EDF is known as Project Hercules and, as it stands, will create a government-owned mother company, EDF Bleu, containing the nuclear assets as well as a hydroelectric subsidiary. Its other subsidiary, EDF Vert, will house renewable energy, the networks and the services businesses and will be listed with about a third sold to raise funds for investment.

The idea of splitting up EDF has been under discussion for some years. In 2016, when President Emmanuel Macron was France’s economy minister, he suggested such a project. And in 2017 ex-environment minister Nicolas Hulot said that the governance of the group might have to change.

EDF labour unions, which remain very powerful, oppose the plan, fearing that it is the first step in the group being broken up or privatised, and nuclear being marginalised.

“Splitting EDF up like this will spell the end of the group,” said Mr Menesplier.

But time is running short, despite the unions’ belief that they can still force a retreat from EDF and the state. According to people familiar with the matter, after long negotiations a deal with Brussels on Hercules could be announced before the end of the year, as could a regulated price for nuclear power in France, which is a necessary part of the restructuring plan. 

That new regulated price is seen as the “quid pro quo” for the change in group structure, designed to reassure Brussels that state-supported nuclear will not distort competition in other parts of EDF. 

EDF is under financing pressure as it has to pay for the upgrade of its existing fleet of nuclear reactors — estimates of the cost to maintain and upgrade the fleet were raised this year from €45bn to €49.4bn through to 2025.

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It is dealing with badly over-budget next generation reactors under construction at Hinkley Point in the UK and Flamanville in France, the latter of which is also years behind schedule. EDF is to unveil a cheaper update to its European Pressurised Reactor by the middle of next year.

Each strike puts additional strain on France’s power supply, which is already creaking as winter begins, and after the coronavirus pandemic held up repair work on some reactors.

The government is also under political pressure to get the reform of EDF right. Although Mr Macron recently said nuclear energy would remain key, he has put off any decisions on new nuclear plants in France until the end of 2022 and does not want to face protracted union protests.

In a boost to its plans to keep building nuclear plants, the UK government confirmed on Monday that it would enter formal negotiations with EDF over how to finance Sizewell C, a £20bn nuclear power station proposed for England’s east coast.


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