Restructuring of firm would not affect Jaitapur Nuclear Plant: EDF


The French Government, after having decided to reduce the share of nuclear energy in the total energy mix of the country, has ordered for the restructuring of Electricite de France (EDF). While the contours of restructuring are not yet clear, the French government wants to scale down the operations of EDF in the nuclear power sector. EDF representatives, however, contend that it would not affect the Jaitapur Nuclear Power Plant, touted as the biggest nuclear power plant in the world once it is completed.

The French utility EDF is expected to submit the recommended restructuring of the group to the government by the end of 2019. Its CEO Jean-Bernard Levy has shot down the rumours of its disintegration. Initial reports suggest that the French Government, which is the major stakeholder in the firm with 84 per cent of its shares, intends to buy the minority share valuing USD 7.9 billion as well. EDF has been facing cash crunch in owing to volatile power tariff and tough competition. The nationalisation of EDF is being seen as the effort to cope with the change in French policy to reduce the country’s dependence on nuclear power and also pitch in for the development of renewable energy.

Senior Vice President (Development) of New Nuclear Projects and Engineering of EDF Vakisasai Ramany Bala told Nuclear Asia: “The French government has directed EDF to recommend ways of changing the group’s organizational structure so that it is better suited to the scale of our investments and our industrial ambitions.” This was announced publicly by the French Government while laying out the country’s Multiannual Energy Policy at the end of the year 2018. Multiannual Energy Policy is a trajectory to be followed over a period of next ten year in terms of energy policy and therefore ecological transition.

French President Emmanuel Macron announced in November 2018 that EDF will stop operations of 14 reactors to reduce the share of nuclear power from present 72 per cent to 50 per cent. He has put an embargo on building any new atomic plant till 2021 and intends to boost wind and solar. The French Government has been facing slew of public protests against spiralling power tariff ant taxes. While bringing in new regulation for EDF’s nuclear power prices, the French Government hopes that the nationalisation of EDF will shield the nuclear installations from the stock market.

The Indian government is watching the developments in the French Utility with heightened interest as EDF will be building the Jaitapur Nuclear Power Plant in Maharashtra. The plant at Jaitapur is one of the largest in the world with six EPR reactors with individual capacity of 1650 MW. However, it has been running into hurdles ranging from financial to land acquisition since its inception in September 2008 through an Indo-French deal.

After hanging fire for years, the Jaitapur Nuclear Power Plant picked up pace in early 2018 following the visit of French President Macron to India when an Industrial Way Forward Agreement was signed between Indian Nuclear Power Corporation of India Ltd (NPCIL) and French EDF. Now with the restructuring of EDF concerns are again being raised over when the project will start.

EDF’s Ramany sought to allay these fears. “The ongoing work on the organization of the Group has no impact whatsoever on the rollout of our nuclear project, including Jaitapur,” Ramany added. As per the Industrial Way Forward Agreement EDF will cover all studies and procurement for the first two reactors. And, for the following reactors, part of the studies and procurement may be localised, in line with the principle of increasing localisation that will be applied throughout the life of the project. The project will also have an element of localisation and for the last two reactors the localisation would be as high as 60 per cent.

After a long drawn negotiation, EDF submitted a techno-commercial bid at the end of 2018 to the NPCIL. The Indian government will now study the offer to assess the cost of the project, loan to be given by France and the tariff of electricity. India is also awaiting to see the performance of the reference plant at the Flamanville EPR before starting the project. A reference plant is a functional power reactor. Since EDF would be bringing in new technology, it is the requirement of the Atomic Energy Regulatory Board (AERB) to see a reference plant.