The financial director of Électricité de France has resigned over a disagreement about the French utility’s plans to build the Hinkley Point nuclear power plant in Britain.
Thomas Piquemal is reported to a have felt that pushing ahead with the funding for the £18 billion project this year would over-stretch the company’s finances and put it at risk.
EDF has debts of €37 billion and falling energy prices in France have hit its profits and forced it to cut its dividend — and borrow to pay for that.
The company said this morning that Mr Piquemal had resigned but did not say why.
Jean-Bernard Lévy, the chief executive of EDF, said in an emailed statement that he regretted the “hastiness” of Mr Piquemal’s departure and reiterated that the French utility aimed to reach a final investment decision soon on the Hinkley Point project.
Advertisement
Mr Piquemal will be replaced provisionally by Xavier Girre, EDF said.
News of the internal disagreement – first reported by Bloomberg – will add to doubts about the much-delayed project. EDF shares were down 6.3 percent in early trading, the biggest falled in France’s CAC 40 index.
In October, EDF said that it was teaming up with CGN, a Chinese state-owned company, to help to finance the Hinkley Point project, with the help of lucrative subsidies from the British government. The Chinese company will only fund a third of the project, leaving EDF to pay for the rest, and the fall in energy prices and the share prices of both companies have dented confidence in their ability to finance the scheme.
EDF’s market value has fallen to around €20 billion from more than €100 billion in 2007, when the group bought British Energy, the nuclear generator and announced plans to build a string of reactors.
The Hinkley Point in Somerset is also opposed by French energy unions and has been hindered by financial problems at Areva, the French nuclear reactor designer whose technology had been earmarked for use at the power station.
Advertisement
Last month, Moody’s, the credit rating agency, placed the company on review for a possible downgrade due to its exposure to a weakening power price environment. “A prolonged period of low power prices will further affect EDF, given its exposure to market-exposed generation activities . . . These pressures may further exacerbate the risks associated with the Hinkley Point C project,” the agency said.
The Hinkley power station will include two French-designed EPR reactors. Areva calls it the world’s most advanced pressurised water reactor, but two currently under construction in France and Finland are years behind schedule and billions of euros over budget. Last year inspectors uncovered “very serious anomalies” in the reactor vessel at the power plant being built in France. French unions want the Hinkley project delayed until the company has developed a simplified version of the reactor.
There has also been opposition in Britain to the government subsidies being offered to EDF and CGN — the companies will have a contract to sell power to UK households at above-market rates for 35 years.
If completed the power station would generate 7 per cent of Britain’s electricity by 2025.