EDF has delayed the final investment decision for its Hinkley Point nuclear project in Britain until after its May 12 shareholders' meeting.
French state owned utility EDF has again delayed the final investment decision for its Hinkley Point nuclear project in Britain until after its May 12 shareholders’ meeting to allow time to consult its works council, which had threatened legal action unless it was allowed to give its view on the project, according to a report from news agency Reuters.
French Economy minister Emmanuel Macron told parliament last month that a final investment decision on the £18 billion project would be taken by early May and that delaying the decision would create a strong risk that EDF could lose the contract. The consultation procedure is likely to take several weeks. EDF has declined to comment.
The new delay – several deadlines have passed without a decision in the past two years – will give EDF the chance to smooth relations with its unions, who consider the project so risky that it threatens the company’s survival.
Internal sources have told Reuters that at least five of the six union representatives on EDF’s 18-seat board plan to vote against the project and Force Ouvriere (FO), one of EDF’s more radical unions, has threatened to strike. Chief financial officer Thomas Piquemal resigned over the project in March, while employee shareholders’ association EAS has demanded that the state buy out EDF’s minority shareholders, accusing the government of abusing its majority control to use EDF as a lever for its energy policy.
French media have reported that M. Macron is not in favour of recapitalising EDF now, because investment in Hinkley Point will coincide with the need for a €50 billion upgrade of France’s nuclear reactors, now only a few years away.
State aid ‘may be illegal’
Meanwhile Greenpeace has written to UK chancellor George Osborne warning him not to allow the Hinkley Point C nuclear project to proceed until the European commission approves further planned support from the French state.
The letter, which is signed jointly with the energy supplier Ecotricity, follows legal advice from barristers at Monckton Chambers in London that plans for state help from France’s government to enable EDF to continue with the reactor scheme could break European competition rules.
The opinion sets out how the French government’s reported refinancing plans for EDF are likely to be illegal under EU law unless and until they are approved by the European Commission. Influencing factors are that the European Commission’s investigation of state aid takes around a year, and it is doubtful that approval would be given, and that the UK government has already given heavy support to the project, which was only approved after being scaled back. That approval by the Commission is itself being challenged in the European Courts.
The risk to EDF is that if its board agreed to proceed with the Hinkley project without fresh Commission approval, EDF could be forced to repay billions of euros. That would jeopardise not only its involvement in Hinkley C but could threaten the stability of the entire company.