When EDF chief executive Jean-Bernard Levy visited London last October to announce a deal on Hinkley Point C with China, executives from the French state-owned energy giant were adamant.
“We have done it,” they declared proudly to journalists seated at EDF’s UK headquarters overlooking Buckingham Palace Gardens.
The tone was triumphant. Despite all the naysayers and the doom-mongers, the joint French-Chinese project to build Britain’s first nuclear reactor in a generation was rolling forwards, and hundreds of hard-hatted engineers would be on site “within weeks” to get to work.
They were wrong.
Instead of a buzz of hi-viz construction activity at the site on the Somerset coast, there has been hesitation and delay.
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Amid growing dissent within the French nuclear establishment, EDF has become increasingly evasive over the Hinkley project.
When six union members of EDF’s board tried to block a final investment decision, warning of the deal’s impact on jobs and investment in France, EDF dismissed talk of a boardroom rift and said everything was on track.
Later, officials even blamed Chinese New Year for the delay in signing a final investment decision.
However, the exit of the finance director, Thomas Piquemal, has thrown into sharp relief the true state of affairs - and made clear the extent of the division within EDF over the £18 billion Hinkley project.
While the French state, which owns 84.5 per cent of EDF’s shares, eagerly wants the project to go ahead — to serve as a model for French nuclear technology exports, the financial problems facing the company are simply too great to plough ahead.
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Plunging energy prices and a collapsing share price have put growing strain on EDF’s balance sheet, which is already weighed down with debts of €37 billion (£28.6 billion).
EDF is being offered lucrative subsidies by the UK government to press ahead with the scheme, of £92.50 per megawatt hour of electricity — above market rates — for 35 years.
However this attractive offer will only kick in once the thing is built and EDF will have to raise the billions of pounds required to get to that point, and bear responsibility for any budget overruns or delays along the way.
Credit agencies have already warned that the company will be downgraded if it presses ahead, making the cost of its debts more expensive to bear.
Meanwhile, EDF also has huge financial commitments close to home — a €55 billion overhaul of France’s ageing 58 nuclear reactors, which are also severely in need of investment and upgrade.
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In a country which generates 77 per cent of its electricity from nuclear power, this so-called grand carénage is considered a bigger priority than the expensive bit of empire-building at Hinkley.
To add to its woes, EDF is also being asked to bail out Areva, the French nuclear reactor designer which developed the EPR reactor to be used at Hinkley.
It collapsed last year after five years of losses incurred following the botched construction of the first of its kind EPR at Olkiluoto in Finland — now the subject of a giant legal battle over ballooning costs and overruns.
It is clear now that some senior members of EDF’s board are deeply concerned that the company simply does not have enough money to pursue all of these different projects at the same time and maintain its credit rating.
Either the French government steps in and bails out EDF to help finance its commitments, or Hinkley could be kicked into the long grass.