Hinkley decision expected this year

25 February 2016

Electricite de France (EDF) CEO Jean-Bernard Levy expects the company to take a final investment decision on the Hinkley Point C nuclear project in the UK this year, Reuters reported. "We are working with our Chinese partners to complete the discussion that we are having and announce a final investment decision very soon," Mr Levy was quoted as telling a Brussels conference on energy yesterday. Asked whether "very soon" meant this year, Mr Levy said "if in my thinking very soon did not mean this year, I would be disingenuous". EDF is planning to build two Areva 1,600MWe EPR units at Hinkley Point.

In October 2015 EDF and China General Nuclear Power Corporation signed an investment agreement for the new reactors. At the time EDF said construction at Hinkley was expected to begin "within weeks". However, in January, French media reports said the final investment decision had been delayed due to funding difficulties. Les Echos newspaper said EDF was struggling to find the cash for its 66.5% stake and was now "putting pressure on the state, which owns 84.5% of EDF, to come up with fresh funds". The Times of London reported on 24 February that EDF will help to pay for the construction of Hinkley Point by selling off part of its stake in the French power grid, but EDF would not confirm this.

Levy did not say whether a Hinkley Point decision could come before or after the 23 June referendum on UK membership of the European Union (EU). Earlier in February, Levy said he expected EDF would pour its first concrete for Hinkley Point in 2019 and that the potential exit of the UK from the EU would not change the plan.

Meanwhile, EDF is calling for "rapid and radical reform" of Europe's electricity market structure to allow for future investments in new generating capacity and to "face up to current challenges of the energy transition and to consumers' expectations". Lévy said in a statement on 23 February that EDF "calls for a redefinition of the European electricity market model in order to reconcile consumers' interests with the transition to a low carbon world". The company said it sees "two key actions" that should be prioritized in reforming the market model - a "significant" floor price for carbon dioxide to be established within the EU set at a minimum of €30-40 ($33-44) per tonne, and promotion of "effective capacity mechanisms" to ensure the long-term security of energy supply, despite market turbulence.

Lévy said that EDF believes there is an urgent need for the EU and other countries within Europe to look again at the way deregulation and competition are implemented. "The market design guidelines that are expected from the EU by the end of the year are an essential part of what should be the energy industry in the future," he said.

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