AP

French government plans to nationalize electricity giant EDF

Jul 5, 2022, 9:10 PM | Updated: Jul 6, 2022, 9:35 am

PARIS (AP) — France’s government plans to nationalize indebted French electricity giant EDF amid a broad energy crisis aggravated by Russia’s invasion of Ukraine, Prime Minister Elisabeth Borne said Wednesday.

The French state now holds an 84% stake in the company, one of the world’s biggest electricity producers. Shares in EDF, which has suffered a series of nuclear reactor shutdowns and other problems recently, jumped on the news.

“We must have full control over our electricity production and performance,” Borne said as she laid out her government’s priorities in her first major speech to France’s parliament. “We must ensure our sovereignty in the face of the consequences of the war (in Ukraine) and the colossal challenges to come. … That’s why I confirm to you the state’s intention to own 100% of EDF’s capital.”

The announcement came as France and Europe are scrambling to find other energy sources to reduce dependence on Russian oil and gas amid fears of an energy emergency next winter.

EDF manages France’s sizable fleet of nuclear reactors, which are facing a raft of technical and other problems. New-generation reactors are years behind schedule and billions over budget.

EDF had 84.5 billion euros ($86 billion) in revenue last year and 5.1 billion euros ($5.2 billion) in profits, and serves tens of millions of customers in France and several other countries. It was partially privatized in the early 2000s.

The rise in EDF’s share price was an apparent sign that investors expect the government to pay a premium to buy up the remaining stock. The shares hit an all-time high in 2007 but have since slid by 90%, falling even lower than the price at which the French government took EDF public in 2005 under a European Union privatization push.

France invested heavily in nuclear energy during the oil shocks of the 1970s and depends on atomic plants for some 70% of its electricity, more than any other country.

But EDF repeatedly had to reduce its production forecasts over the past several months after a string of reactor shutdowns for maintenance and inspections. Several reactors having problems with pipe corrosion are under investigation.

Borne described the nationalization decision as part of a strategy to gain “energy sovereignty” and build “a stronger France in a more independent Europe.”

“We cannot rely anymore on Russian gas and oil,” she said. “We will gain our sovereignty thanks to nuclear and renewable energies.”

Her announcement came hours after the European Parliament approved an EU plan to include natural gas and nuclear energy in the bloc’s list of sustainable activities. Environmental groups fiercely criticized the plan, which France and Germany supported.

France’s state audit agency published a report Tuesday urging the government to change policy regarding EDF and the electricity market, calling the current structure neither “readable nor controllable.”

According to the agency, France has failed to conform to EU policies on opening electricity markets to competition while maintaining affordable prices for consumers.

___

Jade le Deley in Paris and Kelvin Chan in London contributed to this report.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Photo: A delegate wears a hat with pins during the Republican National Convention Monday, July 15, ...

Christine Fernando, Steve People and Jill Colvin, The Associated Press

Rep. Walsh speaks for Washington as cheering GOP delegates nominate Trump for president

Cheering GOP delegates formally nominated Donald Trump for president at Monday's Republican National Convention kickoff.

3 days ago

Photo: Sen. J.D. Vance, R-Ohio, right, points toward Republican presidential candidate former Presi...

Jill Colvin, Julie Carr Smyth, Steve Peoples and Zeke Miller, The Associated Press

Trump picks Sen. JD Vance of Ohio, a once-fierce critic turned loyal ally, as his GOP running mate

Donald Trump named Sen. JD Vance of Ohio as his running mate, choosing a onetime critic who became a loyal ally.

3 days ago

trump assassination...

Ayanna Alexander, The Associated Press

What to know about Trump assassination attempt and the investigation into the shooting

Authorities want to know how a shooter was able to get on top of a roof so close to where former President Donald Trump was speaking and open fire.

3 days ago

Photo: Republican presidential candidate former President Donald Trump is surrounded by U.S. Secret...

Julie Carr Smyth, Jill Colvin, Colleen Long, Michael Balsamo, Eric Tucker and Michelle L. Price, The Associated Press

Trump heads to convention as authorities investigate motive, security in assassination attempt

Trump called for unity and resilience after an attempt on his life added fresh uncertainty to an already tumultuous presidential campaign.

4 days ago

Photo: President Joe Biden speaks from the Roosevelt Room of the White House in Washington, Sunday,...

Will Weissert and Zeke Miller, The Associated Press

In primetime address, Biden says country must not go down road of political violence

President Joe Biden says “we can’t, we must not go down” the road of political violence in America after the attempted Trump assassination.

4 days ago

Photo: President Joe Biden speaks at a news conference following the NATO Summit in Washington, Thu...

Zeke Miller, Seung Min Kim, Lisa Mascaro and Colleen Long, The Associated Press

Biden says during news conference he’s going to ‘complete the job’ despite calls to bow out

Biden used his highly anticipated news conference to deliver a defense of his policies and batted away questions about his ability to serve.

7 days ago

French government plans to nationalize electricity giant EDF