Tue. Jul 7th, 2020

EDF Says Better Nuclear Regulation Would Let it Invest Billions More in Clean Energy

2 min read

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Electricite de France SA Chief Executive Officer Jean-Bernard Levy said more favorable regulation for its French nuclear output and a reorganization to boost the group’s investment in renewable energies could be in place by the start of 2022.

The French government, which controls the country’s dominant power company, is seeking regulatory approval from the European Commission — the region’s competition regulator — to better shield EDF’s nuclear output from power price swings while limiting its consumers’ electricity bill.

The change is a prerequisite for a possible reorganization of EDF’s assets aimed at boosting the group’s capital expenditure on renewable energy and electric mobility. The planned overhaul would allow EDF, which currently struggles to fund about 15 billion euros ($16.2 billion) in annual spending on its plants and networks with cash flows, to invest an extra 2 billion euros per year on clean power.

“We believe that right now we’re on time, although time is constrained, that the reform could be fully implemented by Jan.1 2022,” Levy said at a conference in Paris Friday. “This is a target, this is not a commitment.”

EDF and the government are optimistic they can obtain approval from the European regulator by summer this year, the CEO said. The regulatory change would probably need to be enacted by the French Parliament, he said.

EDF shares rose as much as 9.5% in Paris Friday, and were trading 8.9% higher at 12:13 p.m. as the company released 2019 earnings that beat analyst expectations, and predicted that profit will rise further this year thanks to a further increase in power prices. The company said it will pay a 2019 dividend of 48 euro cents a share as its net income jumped.

“The 2020 outlook is actually slightly better than expectations, which should be taken very positively,” Peter Crampton, an analyst at Barclays, said in a note.”EDF’s current share price does not reflect the positive impact from proposed changes.”

The company isn’t looking at any transformational acquisitions, Levy said. It will probably raise its 2030 target to have 50 gigawatts of renewable capacities, as it’s on track to add a net 8.4 gigawatts of solar and wind assets by the end of 2023, the CEO said.


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