French utility EDF’s (EDF.PA) plan to restructure itself will be delayed for at least a few months as it awaits a broader reform of power regulations, the head of state-owned power group said in a letter seen on Friday.
EDF was expected to present firm proposals for the overhaul, known as “Project Hercules”, by the end of year after a request by President Emmanuel Macron.
The planned restructuring of the heavily-indebted group, which could involve splitting itself in two and setting the nuclear power generation business to one side, has already sparked strong opposition from EDF workers, sparking strikes.
In a letter to top company managers seen by Reuters, EDF CEO Jean-Bernard Levy said regulatory reform was essential before the company reorganized itself, altering the timetable for presenting the proposals.
“A reorganization without better regulation would not be enough to give EDF the financial means to play its role in the investments necessary for the success of (France’s) energy transition,” Levy said.
He said conditions were not yet in place for the reform, which must be discussed with the incoming executive of the European Commission and the French government, and that the situation would be clarified within a few months.
The Commission, which regulates state aid and competition in the European Union, had previously approved the power market mechanism through which rivals acquire about a quarter of EDF’s annual nuclear output, at 42 euros per megawatt hour (MW), in a scheme aimed at giving them fair access to nuclear energy.
EDF operates France’s 58 nuclear reactors that account for over 75% of its electricity needs.
“The new calendar on the restructuring will of course depend on the timing of the regulatory reform,” Levy wrote.
“This clarification is absolutely essential, also because the legal and financial elements of the new regulation will largely condition my proposals on the restructuring,” he said.
EDF unions have said the company’s restructuring would put France’s energy security in jeopardy and cost jobs.
They have threatened more strikes if the government does not withdraw the restructuring plan by Oct. 10, after more than a third of EDF’s French workforce walked out last month.
A spokesman for one of the main unions, the CGT, said on Friday that they held meetings with the government and EDF’s management, and there was no indication the government would drop the plan.
The French presidency and economy ministry had no immediate comment.
Source: Reuters
