Se preparing for the post-oil era, consolidating the advantage of choosing nuclear power, strengthening equity and rebalancing EDF’s balance sheet. These were the arguments put forward in 2005, on the eve of the privatization of the company, by the Minister of the Economy at the time, Thierry Breton.
Seventeen years later, the government is using the same language to take the opposite path, making the group a 100% public company again, as confirmed on July 6 by the Prime Minister , Elisabeth Borne, in her general policy statement. This irony says a lot about the state in which the French nuclear industry finds itself, which, for lack of direction, gives the feeling of making a return to the future.
This decision is supposed to mark the end of a most chaotic sequence, which leaves our national flagship in a sorry state. Over the past decade, EDF has accumulated setbacks. The group was tossed about, from reversals to denials, on the place that nuclear power should occupy in our energy mix.
The latest generation reactors have become financial pitfalls due to recurring delays. The nuclear fleet, aging and defective, is operating at half capacity, while the energy crisis is at its height. Faced with soaring prices, the electrician, on the orders of the State, financed an energy shield with its own money to the detriment of its investment capacities.
Need for consistency
It is a company that is over-indebted and seriously weakened both financially and strategically, which is therefore called upon to return fully to the fold of the State. This decision is binding on the public authorities at a time when EDF clearly no longer has the means to meet the ambitions that have been set for it. Between the upgrading of the fleet, the sustainability of its debt, its international development as in renewable energies and the financing of the six reactors of last generation that the President of the Republic calls for, the company has no other choice but to take shelter behind the State to face these challenges.
It is fortunate that the government is finally taking stock of the urgency of the situation. By deciding without delay on this capitalist movement, while anticipating the end of the mandate of the current CEO, Jean-Bernard Lévy, the State shows that it is determined to turn the page on this disastrous sequence. However, this pseudo-nationalization is in no way a guarantee that the nuclear industry will regain control of its destiny. Over the past few years, capital increases have followed one another without giving EDF any clear prospects. In addition to money, the group needs consistency and industrial rigour.
Bruno Le Maire, the Minister of Economy and Finance, explains that the operation is a strategic choice “because energy independence is priceless”. Certainly, but it has a cost, and the government will have to explain how it intends to assume it and what will be its impact on French households. They must be aware that, whatever the options chosen, electricity will cost more and more. All the more reason to put more rationality back into a sector that has sorely lacked it in recent years.
Appearances are deceptive: regaining 100% control of EDF’s capital does not constitute a return to the good old days of public monopoly, it is, in reality, only the first stage of a process which announcement long and difficult.