EDF supported by speculations about leaving the inventory change – 06.09.2022 at 09:21

(AOF) – EDF gains 2.8% to € 8.33. In an article published this morning entitled “EDF: The Contours of the Coming Revolution,” Les Echos reveals that the project to nationalize electricians is one of the new government’s priority projects. Jean-Bernard Lévy, general director of the public group, has arranged a meeting with various EDF trade unions to discuss the topic, the daily reports.

“A 100% public alternative offers many benefits to the government,” Les Echos deciphered.

“Firstly, politically: initiating nationalization makes it possible to relaunch the very controversial reform of the EDF in a more favorable light – since both the left and the right are supposed to have to sanctify nuclear energy in the hands of the state.”

It is also an essential symbol for EDF unions. “Nationalization would mean a return to the basics, the group founded by Marcel Paul,” said a source close to the public authorities, quoted by the newspaper.

In this operation, which is mainly focused on the executive, it is EDF’s exit from the stock market, Les Echos assured.

“The objectives of this operation, which can be combined with a capital increase, are several: to appease investors, reduce financing costs, take advantage of a more favorable bargaining position with Brussels to reform the regulated price of nuclear power (Arenh) or even finance new EWCs,” the newspaper said.

“Removing minority shareholders from EDF’s capital would also allow EDF to have a free hand in deciding on new measures – potentially very disadvantageous for EDF – aimed at curbing soaring prices,” says Les Echos.

The daily understands that at this stage, “two options are being explored: either through a simplified public offering for minority shareholders or through a bill on nationalization. The first option seems cheaper and faster, but it does not offer the same political response … “.

AOF – GET MORE

Key points

– World leader in low carbon energy created in 1946 with 38.5 million customers worldwide and 117.3 GW of installed capacity: 60% in nuclear energy, 18% in hydraulics, 8% in renewable energy, 9% in gas .3% in fuel oil and 2% in coal;

– Turnover of EUR 84.5 billion and installed capacity of 117.3 GW: 60% in nuclear energy, 18% in hydraulics, 8% in renewable energy, 9% in gas, 3% in heating oil and 2% in coal;

– The “Cap 30” business model with 3 strategic axes: supporting customers towards carbon neutrality through 10 billion service revenues, the position of the world’s first producer of clean CO2 and the role of an energy transformation player;

– Capital 83.88% state-owned, Jean-Bernard Lévy is the CEO of an 18-member board of directors;

– The balance sheet cleared in April with a net debt (rated A due to a state guarantee) of EUR 42.3 billion, which will be strengthened by a sales plan of EUR 3 billion between 2022 and 2024.

Challenges

– 4 strategic plans: electric mobility – 30% market share in the supply of electricity for electric vehicles by 2023 in France, the United Kingdom, Italy and Belgium-, storage – 10 GW installed worldwide in 2035-, solar energy – 30 % market in France in 2035 – and the Excell plan for the French nuclear sector;

– Innovation strategy for digital transformation, production processes, future electrical systems and decarbonisation of customer applications: R&D budget of EUR 661 million with 756 patented innovations, EDF Pulse Croissance funds and incubators and research partnerships (Sinclair Laboratory, 5g living laboratory , quantum computing, etc.);

– Environmental strategy included in the group’s raison d’être: carbon neutrality in 2050 and a 50% reduction in emissions compared to 2017 in 2030, 99% of operating budgets allocated to decarbonisation and energy transformation, EUR 8.755 billion in “green and sustainable” financing and 72% of credit lines indexed to ESG indicators;

– Launch of a construction program for 6 EPR2 and studies for 8 others;

– maintaining high wholesale prices, partially offset by the state restriction on price increases for individuals for operating profit;

– Integrated operator, from the design and production of nuclear reactors, through Framatome, 75% owned jointly with Mitsubishi (19.5%) to distribution.

Challenges

– Activity governed by the NOME law (free competition between all market participants and the resale of a quarter of EDF’s nuclear electricity generation to its competitors) and electricity prices administered in France, and thus network maintenance costs little included in the tariffs;

– Solving reactor corrosion problems, which led to the closure of almost half of the production capacity;

– Impact of the Russian-Ukrainian conflict: volatility of raw materials, supply tensions;

– Neutralization of the competitive advantage of nuclear energy by the obligation to sell electricity to industrialists at market price and the closure or maintenance of nuclear power plants, disadvantaging production in 2022;

– State speculation speculation;

– Target by 2023, which has a debt leverage effect of less than 3.

High share waste management

France produces 350 million tonnes of waste a year. If 66% is recycled, the rates vary according to the nature of the waste. So only 21% of plastics are. In order to strengthen the circular economy, the state massively supports research and development within the 3R strategy (“Recyclability, recycling and reintegration of materials”). An envelope of 370 million euros will be dedicated to it. As far as hazardous waste is concerned, this activity is very profitable. In France, storage and processing capacities are stretched compared to annual needs.

Leave a Comment