EDF plagued by financial problems which could derail Hinkley plans

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Hinkley Point Project

A former energy advisor to the French government, Mycle Schneider, was being interviewed by BBC this week when he questioned the French utility EDF’s ability to build new nuclear power plants in Britain.

“EDF is in big trouble. The whole of the nuclear power industry in France is in big trouble,” he said.  According to Schneider, EDF has debts of €39bn, which means they might not have enough resources to put into the proposed project.  He added, It’s a very long-term investment of very uncertain levels of realization.”

EDF and the British government have been deadlocked in negotiations on the Hinkley Point project because the two sides have failed to agree on a price for electricity and other guarantees which the utility has been pushing for.  EDF has requested a guaranteed electricity cost which is twice the current amounts for the next 35 years.  The mounting concerns are hard to ignore, as EDF could make as much as £90billion over the lifetime of the contract.

Some experts have speculated that EDF will require the British government to provide even larger subsidies to build Britain’s power stations, which likely means that the deadlock will continue while the problems remain unresolved.  “There’s no deal in sight, discussions are ongoing and if EDF doesn’t get the price that it believes is the right price then they won’t do it, they have no choice,” one insider reported to Fox Business.

Additionally, many critical former funders and technology suppliers have completely abandoned nuclear power in the wake of the Fukushima Daiichi nuclear disaster.  Subsequently, EDF has been looking for new potential partners to share the construction risk in the project, even the China Guangdong Nuclear Power Holding Company.

Source: The Telegraph

Source: Fox Business

Source: This Is Money

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