Emmanuel Macron facing the EDF and energy bomb

It is not only on the pandemic front that nothing is going right for the executive: the energy bomb is exploding all over the world. Faced with these considerable challenges in the midst of climate change, France has for too many years appeared to be immobile on the subject, unable to formalize a new global strategy. As a result, announcements and alerts are linked, and panic wins a good part of the players in the sector, and in particular at EDF.

For the national electrician, the bad news has been piling up for several weeks. This week, the public group first officially acknowledged that the Flamanville EPR, this third-generation prototype reactor which multiplies the setbacks, is again late: the date for loading fuel into the tank of the future reactor is “postponed from the end of 2022 to the second quarter of 2023”, announced EDF. The announcement had the effect of an explosion as President Macron has announced several times since the fall his intention to revive the French nuclear industry. Especially since it’s been a long time since JeanBernard Lévy, the CEO of EDF, is desperately trying to arbitrate the State to launch the construction of six EPR reactors in France.

In reality, this announcement was an open secret. At the top of the state, we already knew. Thus, when Emmanuel Macron made his pro-nuclear declarations in the fall, he was already informed of the umpteenth delay of the Flamanville EPR. He already knows that the prototype is not yet ready to see the light of day, and it is precisely for this reason that he never mentions it in his speeches. Visiting Framatome in December 2020, the president had also unveiled an agenda that left little doubt: “The final decision to build new reactors must be prepared and must be taken no later than 2023, when Flamanville 3 will have entered service”. For a French nuclear figure, it is clear that the EPR no longer has the favor of the Elysée despite the activism of JeanBernard Lévy on the subject. But what could be a plan B that would hold water?

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The year 2021 had however ended well… At the end of December, we learned via a few press leaks that France was in the process of imposing nuclear power as a green energy within the framework of the Brussels debates on the “green taxonomy”. The articles then rejoiced at a “French” victory against the anti-nuclear front at European level (front partly led by Germany). But as often, the devil is in the details. And few journalists have noticed that the arbitrations in progress would allow Germany, a major importer of Russian gas, to also convert the gas into green energy! Which actually means that Germany will be able to supply the whole of Europe with gas (via Nord Stream and Nord Stream 2), bypassing ecological taxes.

Because behind the discussions on the “green taxonomy”, it was not only a question of authorizations for public financing, it was also a question of ruling on the perimeter of ecological taxation… Behind this apparent victory, we therefore find a real victory of the gas lobby, an energy that nevertheless contains carbon. A few days ago, on December 23, 2021 to be exact, we thus learned (very discreetly) that Engie had just signed a major contract for the purchase of shale gas with the US group Cheniere Energie… At the end of 2020, a first contract import of shale gas between Engie and the StatesUnited had finally been broken by the government, in particular under pressure from environmental associations. This time, the new contract has been signed and initialed.

This information is important because, as we have seen with the return of extreme cold in recent weeks, the French nuclear fleet can no longer supply the French population and businesses with energy, and EDF is forced to import electricity from other European countries, especially Germany. For what reasons ? Quite simply because the nuclear fleet is particularly aging, and its availability rate is in free fall. The national electrician would need tens of billions of euros of investment to get out of the red zone in terms of the availability of its fleet. Again, we learned this week that an anomaly had been found at the Penly plant, a corrosion defect already found at the Chooz and Civeaux plants. As a result, EDF’s nuclear production will be less than 330 tera watt hours this year, and could even drop to 300, the lowest for thirty years. A headlong rush.

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To make matters worse, the government decided today to block regulated tariffs, to limit price increases to 4%. EDF will have to sell a larger quantity of cheap nuclear electricity to its competitors. Since that day, panic wins EDF. Jean-Bernard Lévy has just convened for Monday the “top 200”, the 200 highest executives of EDF. The situation is serious. Its stock price fell sharply, reaching its lowest level since September 2020. The Elysée is up against the wall. We are already talking about a necessary recapitalization of EDF. Would the state still be back to the pot? Or does the executive imagine calling on outside investors? Emmanuel Macron’s only chance is that energy does not yet make headlines during this start of the presidential campaign. Until when ?