EDF’s Herculean challenges in 2021

On January 19, EDF employees will begin their fourth day of strike action since November 26. By this social movement, they oppose a vast project of reorganization of the group, baptized Hercules, the Greek demigod. Ahead of this new day of action, the four main union confederations (CFDT, CGT, FO and CFE-CGC) are united. They urge President Emmanuel Macron to give up the Hercules project which would lead, according to them, to the dismantling of EDF.

The Hercules plan would consist in separating the national energy company into three distinct structures: nuclear production, renewable energies and the distribution of electricity, and finally hydroelectric dams. Behind this highly contested project, including among parliamentarians, some of whom are considering tabling a proposal for a shared initiative referendum, hides a key issue around the reform of the remuneration of nuclear electricity.

The two subjects are the subject of intense negotiations between the French government, which owns nearly 84% of EDF, and the European Commission. While the public authorities were hoping to get a green light from the Commission before the end of 2020 to initiate reform in Parliament from the start of 2021, negotiations are behind schedule.

“As soon as we have a clearer vision of the final position of the European Commission”, we will report the situation to the trade unions, the Minister of the Economy Bruno Le Maire has committed. “On this subject, today we are not there yet”, he estimated, January 12, during the presentation of his wishes to the press. According to him, EDF “go into the wall” and needs to transform. Explanations of this explosive dossier in eight questions.

1 – What is the origin of the Hercules project?

In 2018, the public authorities asked Jean-Bernard Lévy, CEO of EDF, to propose a plan for the reorganization of the company. These proposals were to be presented at the end of 2019 but the deadline has been extended because they are conditional on the progress of discussions between France and Brussels, in particular on nuclear regulation.

The reorganization of the EDF group is in fact closely linked to the current regulation of the remuneration of nuclear electricity and to the colossal financing needs of the energy company, which faces a wall of investments. EDF must both maintain its fleet, relaunch the nuclear program and step up in renewable energies where it is lagging behind.

“The large fairing [les travaux destinés à prolonger la durée de vie d’une trentaine de réacteurs sur 56, ndlr] is estimated at 50 billion euros, while the potential development of six new EPR [dont la décision définitive de construction est attendue pour 2023 au plus tard,…

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