Emmanuel Macron has been dealt a crushing blow after EDF warned it was expecting a hit of roughly £28billion to its full-year core earnings. The French state-owned energy company – which is building the new Sizewell C nuclear facility in the UK – is apparently facing a perfect storm as a result of lower-than-expected levels of nuclear production, a bigger loss than previously estimated and its sixth profit warning this year.
EDF has been struggling throughout 2022 with an unprecedented number of outages at its 56-strong fleet of nuclear reactors, partly due to corrosion issues first spotted in December 2021.
Problems have been compounded by strikes over wages in the past few weeks that further delayed repair works at some reactors.
The group, which is in the process of being fully nationalised, confirmed nuclear output would come in at the lower end of a previously announced 280-300 terawatt-hours range – a 30-year low.
In September, EDF had forecast a hit to its earnings of £29billion due to lower production.
The company also expects that a government electricity price cap introduced earlier this year to protect French households from soaring energy prices will cost it a further £10billion as it was forced to sell electricity at a discount to its competitors.
The combination of lower output and capped electricity prices means EDF is set to end the year with a big loss.
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In its statement on Thursday, the group said it had completed repair works on six reactors affected by corrosion problems, while works were still underway at four reactors for the same issues, while five more were being checked.
EDF is also about to get a new CEO. The French parliament this week approved Mr Macron’s proposal to appoint Luc Remont, currently a top executive at Schneider Electric, to take over the helm of the company.
Finance Minister Bruno Le Maire said on Thursday he wanted Remont to start in his new role in mid-November.
The state, which already owns 84 percent of EDF, is due to launch a buyout offer for the shares it does not already own by the end of this year, in a deal worth almost £10 billion.
Unveiling plans to invest £700million of UK taxpayers’ cash in Sizewell C last month, just days before stepping down as PM, Boris Johnson urged his successor – the soon-to-be-ousted Liz Truss – to “go nuclear, and go large”.
However, in an op-ed written for Express.co.uk, Andy Mayer, Chief Operating Officer and Energy Analyst at the Institute of Economic Affairs, said: “Nuclear in principle is brilliant.
“It provides baseload – the ‘always-on’ power needed to match our basic needs. Nuclear, in practice, is always over-budget and overdue.”
He added: “The Government’s impact assessment suggested Hinkley Point would cost £68bn-£120bn and Sizewell C would take 14 to 17 years to deliver.
“Both are based on the failed technology of EDF, a French company managing a corroding fleet of old stations, over half of which are offline, and new stations so flawed that nobody outside Britain wants to buy them.
“They’re bankrupt, being nationalised, and suing the French government. That is the model Boris wants us to copy.”