EDF boss defends UK energy policy

At a stormy meeting of the UK’s Energy and Climate Change Committee this morning, EDF boss Vincent de Rivaz said the government’s Electricity Market Reform “is all about certainty”.

He said EDF “relished the challenge” of having contracts for difference (CfD) on UK nuclear, adding that if he were given the job of funding new nuclear in Britain he would have picked the CfD model.

He said: “I think the world is watching Britain and clearly see the EMR in general, the CfD in particular is indeed, in the current situation, is the optimal solution to get the funding for this type of project. I don’t think there is any better alternative.”

He defended the government’s planned changes to the electricity market and said that these proposed changes were not to blame for the exit earlier this year of E.ON and RWE from the Horizon new nuclear project.

And in relation to EDF’s plans for Hinckley Point in the UK, de Rivaz said: We are on the verge of a big decision. For Britain, sooner or later, there will be good news.”

However he had earlier told MPs that the government – in its Energy Bill, which is due to be published in ovember – still had work to do in terms of providing investor certainty.

“We have workers with high visibility jackets standing ready to go to work on our side. The responsibility now is on government to deliver”.

De Rivaz had a turbulent exchange of views with some members of the committee, with one, Barry Gardiner, accusing him of “filibustering” the debate.

Gardiner wondered whether there was a “perverse incentive” for EDF to state high costs for new nuclear in a bid to win a high strike price.

“Absolutely not,” said de Rivaz. “I don’t want to sign a deal which is not balanced because if it is not it won’t be stable, won’t be durable.” He added it would “be a folly to try to cheat”.

De Rivaz also went on the defensive when asked about the views of Sir William McAlpine, one of the UK’s biggest names in construction and a member of lobby group Supporters of Nuclear Energy. McAlpine wrote to UK Chancellor George Osborne last month, urging him to block any price deal with companies building nuclear stations “unless and until you are absolutely satisfied the nation is getting value for money”.

He said the CfD model would give nuclear power an unnecessary subsidy and provide EDF with a huge return on its £14bn investment in its first two plants.

De Rivaz asked “what does he know about the cost of Hinckley Point?”

However the next witness to give evidence to the committee after De Rivaz left the room was McAlpine himself, who said that they UK should have “40 per cent baseload nuclear energy and should have had it a long time ago”.

He said without an influx of nuclear power into the UK energy mix “it won’t be long before the crunch comes”.

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