Heavily indebted French energy giant EDF has been promised a state bailout worth billions of euros to allow it to press ahead with plans to build the £18 billion nuclear power station at Hinkley Point in Somerset, UK. According to a report in The Times, Emmanuel Macron, the French economy minister, has dismissed concerns in France and Britain about the high cost of the project to build two nuclear reactors using French technology. Instead, he signalled the French government’s willingness to prop up EDF to enable it to complete the job. "If we need to recapitalise, we will do it," he said. "If we need to renounce dividend payments again, we will do it."
Hinkley Point, which is scheduled to start producing energy in the middle of the next decade, is seen by the UK government as an important factor in maintaining the country’s baseload power supply and meeting its decarbonisation commitments. It is also
It is also important in helping to ensure the survival of the French nuclear industry, which employs about 220 000 people.
However, concerns have been raised in Britain on the overall cost, and the cost to the consumer, with UK chancellor George Osborne having agreed a subsidy deal in 2013 to pay EDF treble the present wholesale price of electricity for 35 years.
EDF, which is 85 % owned by the state, has amassed debts of €37 billion (£29 billion). Thomas Piquemal, the company’s finance director, resigned in March month, highlighting his reservations about the impact of the Hinkley project on EDF’s finances. The company is struggling to build a similar reactor at Flamanville in Normandy, which is six years late and €7.2 billion over budget. It also faces a bill of up to €100 billion to renovate its existing 58 reactors in France.
– The Times reports that it has seen documents suggesting that the cost of building Hinkley Point could rise by nearly £2 billion. An independent analysis of the £18 billion project claims that Areva, the French company that developed the EPR reactor earmarked for Hinkley, is repricing the technology before a final investment decision, which it expects to be signed by EDF and its Chinese partners in May.