EDF boss vows to speed up nuclear projects and narrow gap to Asian peers
The state-owned French group wants to use Sizewell C in the UK to showcase its capabilities
EDF’s new boss has vowed to speed up the delivery of new nuclear reactors in an increasingly competitive market, after costly overshoots in the past weighed on the French energy group.
The company wants to use the development of the UK’s Sizewell C nuclear power station to show that huge reactors capable of powering millions of homes can be delivered at speed, in the hope that this will help it attract private funding and compete with more efficient rivals, including those from Asia.
Bernard Fontana, chief executive, said the state-owned group remained “open to international markets” and hoped to export more of its designs beyond the projects it is undertaking in the UK and France.
EDF has been tasked with delivering at least six new French reactors from 2038 onwards and is due to deliver two for the £38bn Sizewell C project in the middle to late 2030s.
It is aiming to be able to build a reactor in about six years by the time the last pair of French reactors are under way. That is still slower than the five years achieved by some Chinese developers, but an improvement on its own record of taking well over a decade.
“We’re moving into a phase in which of course safety comes first, quality needs to be there too, but it also needs to go faster,” Fontana, who took the top job at EDF in May, told the Financial Times. “It’s the swiftness of the execution which also makes [projects] economically efficient.”
Financing was finalised for Sizewell C this week. If the project is completed in 10-12 years as planned, it will be a huge improvement on EDF’s recently launched Flamanville 3 reactor in Normandy, France, which was meant to be a five-year project, but took 18 years, with the budget ballooning sevenfold.
“There’s a deep well [of efficiency] to be had and which we need to exploit . . . We can surprise positively on the timeline of our programmes,” said Fontana, previously boss of EDF-owned nuclear component maker Framatome.
Fontana’s push for efficiency comes as EDF, weighed down by a net debt of €50bn, needs to finance €30bn of investments annually over the next five years, including on maintaining current sites, according to estimates by France’s budget watchdog. EDF operates 57 French reactors.
EDF’s boss confirmed that the group was reviewing its portfolio of assets, including and selling parts of its renewables portfolio in the US and Brazil. It could also list or sell a stake in its Italian utility Edison.
EDF like rivals including Westinghouse of the US, was hamstrung by a hiatus in government orders that was worsened by the 2011 Fukushima meltdown in Japan. Covid pandemic stoppages and shifting safety demands from regulators also emerged as hurdles. EDF also made costly errors, and had to redo parts of its plants.
The global industry is dominated by Russia and China, and EDF is also facing competition from Westinghouse and South Korea’s Korea Hydro & Nuclear Power for European tenders.
All of EDF’s other European Pressurised Reactor designs completed in recent years, in Finland and China, experienced delays. In the UK, it is working on the Hinkley Point C — a sister project to Sizewell C that is being built in Somerset and is several years behind, and over budget.
Fontana said EDF would speed up processes through mass production of components like steam generators, while managers and suppliers had gained experience from shuttling between different projects.
“To mobilise our teams I’ve made them calculate the cost of an hour’s work at our construction sites,” Fontana said, adding it could reach up to €1mn. “So if it takes six weeks to reach a decision, that’s an expensive decision . . . we need to find set-ups that allow us to make 90 per cent of decisions in a quarter of an hour.”
Delivering Sizewell C — in which EDF has 12.5 per cent — on time will be vital to attracting private funders for future projects. The project will rely on a “regulated asset base” financing model, which reduced risk for investors by giving them a guaranteed return during the construction.
The UK’s Centrica, Canada’s La Caisse and London-based Amber Infrastructure have committed to a combined equity of £3.25bn to Sizewell C, which has the government as biggest stakeholder and financier.
“There were more interested parties than stakes to be had in the financing,” Fontana said. “It’s a project that shows investors’ confidence in a nuclear project which can also be financially sustainable.”