- Britain is seeking to add nuclear capacity as fleet ages
- Utility also faces an expected jump in investments in France
Electricite de France SA is in talks with the UK government over the “long-term financing” of its Hinkley Point C nuclear plant still in construction, as well as for the planned Sizewell C project, Chief Executive Officer Luc Remont said.
The French government has been pressing the UK to further help the state-owned utility finance its nuclear projects in Britain. EDF is seeking to cope with the soaring cost of Hinkley Point C, while also expecting a jump in investments needed for new atomic facilities in France and grid upgrades to accommodate more renewables.
“We’re obviously having talks with the British government on both projects” as EDF already has contracts for the two UK facilities, Remont said during an earnings presentation on Friday. “Our goal is to find a solution that meets the interests of parties for the continuation of the UK nuclear program.”
The UK is in dire need of more low-carbon power capacity to achieve its net zero ambitions by the middle of the century as its aging nuclear plants reach the end of their expected lifespans. France wants the British government to share the cost of developing new reactors in the UK with the debt-laden utility in an “equitable” way, French Finance Minister Bruno Le Maire said this week.
Last month, EDF raised the budget for Hinkley Point to as much as £47.9 billion ($60.3 billion) in current value — citing labor shortages, supply chain issues, and longer-than-expected cable and pipe-fitting works. The utility’s bill also rose after China General Nuclear Power Corp. stopped funding its share of the project in the last quarter, having fulfilled its contractual commitment.
Sizewell C is likely to need similar spending, although EDF has said it can cut costs by repeating processes from Hinkley. At the same time, Britain has shrunk the pool of potential investors it’s willing to do business with when it comes to vital infrastructure. In 2022, the UK took over a stake from CGN in Sizewell. And it has instituted “strict national security checks” for any potential investor in the project.
The UK government owned 50.6% of the project at the end of last year, while EDF owned the rest, according to the utility. While Britain doubled its investment in Sizewell C last month with an additional £1.3 billion — in a bid to lure private investors and reach a final investment decision later this year — it has refused so far to invest in Hinkley Point C.
“We’re having talks with the British government and other investors to set up the financing of Sizewell C,” with the aim to reach a final investment decision, Remont said. He reiterated that EDF won’t hold more than a 20% stake in the project.
Despite cost overruns and construction delays, the Hinkley Point C project remains profitable for EDF, and the company wants to complete it as soon as possible, the CEO said.
Last year, the utility spent £3.6 billion strengthening the country’s energy security and boosting jobs, while earning £3.4 billion on an Ebitda basis, it said in a statement. Since 2018, EDF has invested double what it has made back into Britain, investing £2 for every £1 it has made.
Source: Bloomberg