EDF tensions over Hinkley Point C are laid bare

EDF tensions over Hinkley Point C are laid bare

By Michael Stothard in Paris

Finance director’s resignation highlights deep concern about nuclear project’s risks 

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ensions inside EDF over its plans to build a flagship nuclear power station in the UK were laid bare on Monday, after the finance director quit his job in protest and claimed the project could threaten the company’s future.

Thomas Piquemal’s dramatic exit highlights how a number of senior executives at the French state-controlled utility have long wanted to either delay the £18bn Hinkley Point C project in Somerset or scrap it completely. They say the plans look too risky for a group that is grappling with difficult European markets and a large debt load.

But Jean-Bernard Lévy, EDF’s chief executive, is determined to push ahead with Hinkley, and has the backing of the French and UK governments. A final investment decision by EDF’s board on the project could come as early as next month.

Mr Piquemal, who joined EDF six years ago, quit on Thursday after a strong disagreement with Mr Lévy.

One person familiar with Mr Piquemal’s thinking said: “He could not in good conscience remain at the company when it was pursuing a strategy [in pushing ahead with Hinkley Point C] that put the entire company at risk.”

Mr Piquemal made no public comment, but he is not the only EDF insider to have spoken out against Hinkley. Another board member, who declined to be identified, told the Financial Times that the company “risked everything” and that there were a number of directors concerned about the dangers of the project.

The CFE-CGC union, which has a seat on EDF’s board, also said last month that the Hinkley project could “put EDF in danger”. 

There are two main reasons for the concerns. Firstly, the reactor technology due to be used at Hinkley — the so-called European Pressurised Reactor — is unproven, and has been beset by problems elsewhere on the continent.

An EPR power station being built by a consortium led by France’s Areva in Finland — the first European country to order the technology — is currently nine years behind schedule and more than €5.2bn over budget. Meanwhile, an EDF-led EPR project at Flamanville in France is six years late and €7.2bn over budget.

The concern is therefore that, while the Hinkley project may be profitable if all goes according to plan, the risks of multibillion-euro construction delays are significant and could put the company under severe financial pressure.

The second is that EDF is already in a weakened state. Wholesale electricity prices in Europe have fallen sharply over the past year, because they are linked to the value of crude oil. Meanwhile, the opening up of the French market to competition has eroded EDF’s once near-monopoly status.

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