France’s EDF shares sink as production, price woes mount

PARIS: Shares in French energy giant EDF plunged on Friday, after a series of blows for the state-controlled firm including shutdowns at nuclear plants, government orders to sell cut-price power and a financial warning.

Tumbling by more than 21 per cent in mid-morning trading in Paris, EDF’s stock massively undershot the CAC 40 index of leading shares, down 0.8 per cent.

The night before, EDF had warned that it would miss its targeted ratio of net debt to underlying profits, after the government ordered it to sell an additional 20 terawatt-hours of electricity from its nuclear plants to competitors at a lower cost.

Designed to ease the pressure on energy bills for consumers as Europe faces a power squeeze, Finance Minister Bruno Le Maire told newspaper Le Parisien that the measure would cost the power company up to €8.4 billion ($9.6 billion).

In a bid to soften the blow, he also recalled that the state was also supporting EDF with plans for a new-generation fleet of nuclear reactors.

“We’re launching a new programme with considerable prospects for EDF’s development,” Le Maire said.

But Philippe Page le Merour, a union representative, complained to AFP that “half of EDF’s production will be on permanent special offer to our competitors”, after earlier in the week calling the government measure a “poison” for the company’s finances.

Around 70 per cent of France’s electricity is generated by 56 nuclear reactors, but 10 of those are currently offline as problems are discovered or feared in the ageing plants.

Also on Thursday, France’s IRSN nuclear regulator warned of possible safety problems with the cooling system at a third plant, after corroded welds on the pipes of an emergency cooling system were found or suspected at two others of similar design.

Many French nuclear power stations are coming to the end of their expected lifespans of 40 years, but EDF is struggling to bring new reactors on stream.

The group announced a further delay into 2023 and a futher €300 million in cost overruns for its troubled new-generation nuclear plant in Flamanville in northern France on Wednesday.

That design is supposed to be the model for any future fleet of reactors.

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