Two is often better than one, at least for European utilities grappling with massive upheaval in energy markets and dwindling profits. German utilities have shown the way by splitting themselves up in recent months. Now, Electricite de France should consider such a split to shore up its balance sheet, attract more capital and fund large investments. To recap: earlier this year, Eon separated its fossil fuels business into a new unit, Uniper. Meanwhile, RWE is poised to offer a 10 percent stake in its renewables, grid and retail operations in an initial public offering — providing it with a cash injection and a separate way to tap capital markets. The latter approach is the one best suited to EDF.EDF is 85 percent owned by the French government. Fortunately for a company that generates 77 percent of its electricity from fission, France remains committed to nuclear power, unlike Germany. Still, tumbling wholesale power prices are putting EDF’s nuclear business under pressure, and liberalized energy markets leave it increasingly exposed to competition. Meanwhile, the company’s gargantuan liabilities and spending plans have made EDF uninvestable for all but the bravest shareholders. EDF’s backing of an 18 billion-pound ($26.3 billion) nuclear plant at Hinkley Point in the U.K. looks misguided. Hinkley looks increasingly like a last throw of the dice, a project kept aloft by political considerations, rather than cold hard economics. In theory, EDF could reap large rewards from Hinkley — but the cash won’t arrive for a decade and it’s doubtful EDF will deliver the project on time and on budget.
Bloomberg 1st June 2016 read more »
A row has broken out after DECC refused to disclose the arrangements with EDF fordealing with radioactive waste from Hinkley.
Burnham-on-sea.com 31st May 2016 read more »