Renationalize the public electricity giant? Emmanuel Macron candidate had taken up the idea between the two rounds of the presidential election. And since then, the idea has gained ground, as EDF’s financial situation is far from brilliant. However, given the soaring selling prices of electricity on the markets, EDF should be rubbing their hands. Instead, the public electrician is already announcing plummeting 2022 results, in particular because of its main shareholder.
“EDF is mistreated by its shareholder: the government, through the tariff shield, decides that EDF will sell its electricity below its cost and will make losses”recalls François Lévêque, professor at Mines ParisTech and author of the book Nuclear On/Off.
EDF is doing its calculations: the measures of the tariff shield put in place by the government will sacrifice ten billion euros on its results. In addition, the historic plunge in the production of nuclear electricity will represent a shortfall of 16 billion euros. Between the technical damage discovered on 12 reactors since December and the maintenance delays due to the Covid, it could not have been worse.
Especially since EDF’s debt continues to climb, to peak at 43 billion euros, while the investments to be made are colossal: 50 billion for the maintenance of the current nuclear fleet, and at least 52 billion to build the six future EPR 2 reactors wanted by Emmanuel Macron during his campaign.
Would it then be a matter of nationalizing the group to save EDF’s finances? The exact phrase uttered by Emmanuel Macron during his campaign is: “The state must take back capital.” And therefore not the entire capital: what Emmanuel Macron wants is to nationalize EDF’s nuclear activity, because he knows that nuclear energy is an energy that is struggling to find private investors to finance itself.
“These are heavy investments that last a long time, which are subject to political and geopolitical hazards… And since Fukushima, finding an industrialist or a private player who is ready to commit large amounts over the long term while being open to such a risk , it is complicated.”
Julien Teddé, CEO of Opéra Energie, specialized brokerat franceinfo
Emmanuel Macron did not clarify his idea. The state is now an 84% shareholder in EDF and taking over the remaining 16% could cost it five to seven billion euros. Would he take over all of EDF, would he partially sell certain profitable activities, such as wind and solar, to the private sector? Or that of distribution, with Enedis? This is what was provided for in the restructuring plan which collapsed 18 months ago, in particular due to the mobilization of the unions. The option of nationalization certainly has the favors of the CGT but the union does not want it under these conditions.
“Their intention is to go through a renationalisation which is accompanied by a plan to carve up the company, predicts Philippe Page Le Mérour, secretary of EDF’s central CSE. That is to say that when everything is going well, we privatize, when everything is going badly, we nationalize. The string is a little big.”
A renationalization of EDF is “not excluded”, according to the Minister of Energy Transitionhttps://t.co/yf1YNoIpN3 pic.twitter.com/JBGTrSlbDb
— franceinfo (@franceinfo) June 14, 2022
Especially, believes Alexandre Grillat, of the CFE-CGC, that nationalization is not the miracle cure for EDF’s problems: “Nationalization must be accompanied by a capital increase to strengthen equity, he points out. And we must better remunerate the nuclear fleet. Nationalization is just the state buying out the minorities, but that does nothing. “
Beyond nationalization, it is above all fresh money that EDF needs. The government remains cautious on the subject on the eve of the legislative elections. “Nationalization is not excluded, but it is not decided”loose the Minister of Energy, Agnès Pannier-Runacher.