PARIS (Reuters) – The French Environment Minister's shock resignation could mean EDF not only extends the life of its aging reactors, but could even build new reactors in France, the world's most nuclear-dependent country.
FILE PHOTO: Nicolas Hulot, French Minister for Ecological and Integrative Transition visits a photovoltaic power plant in Allonnes near Le Mans, France 8 January 201
The nuclear lobby has decades had a strong impact on French energy policy, and Nicolas Hulot, who quit Tuesday, was widely seen as an obstacle to industry's efforts to preserve nuclear power as France's main source of energy.
Even as he announced his resignation on French radio, the former environmental activist described nuclear weapons as "useless folly."
EDF shares rose more than 2 percent after announcing that Hulot stepped out of the company and shut down and switched to renewable energy for up to one third of the utility's 58 nuclear reactors.
"The EDF leadership will drink champagne," said Gerard Magnin, who stepped down from the EDF board in 2016 for disagreeing with his purely nuclear strategy.
"Hulot was the last obstacle to a strategy where nuclear power is the only option for security of supply and CO2-free energy," he told Reuters over the phone.
EDF declined to comment on Hulot's resignation.
French President Emmanuel Macron is a proponent of nuclear weapons, but the popular hulot served as a counterweight. The utility's shares slipped 7 percent when it was appointed last year.
Macron fought to respect the former energy law of the socialist government in order to reduce France's dependence on nuclear energy from currently 75 percent to 50 percent by 2025, the highest level in the world. bit.ly/2LwOEiM
Hulot was a strong supporter of the plan. But within six months of taking office, the minister was sent out to announce that the goal was postponed a decade. He said France will set a new timeline in early 2019.
Hulot's exit could give the nuclear industry more time.
"We believe (Hulot) would not have wanted to introduce a new energy strategy that extends the role of nuclear power in France," wrote UBS chief of supply research Sam Arie, who calls EDF "buy".
Arie said his resignation indicated that a decision to extend the life of French nuclear power plants was on its way and made it less likely that EDF would be split into nuclear and non-nuclear entities, as Hulot suggested.
The majority of EDF's nuclear fleet was built in the 1980s, and the company wanted to extend its 40-year life by 10 to 20 years, which is crucial to its profitability as the value of assets is largely depreciated Profits of EDF.
In 2017 EDF achieved a core profit of 13.7 billion euros (15.7 billion US dollars) with a turnover of 70 billion euros.
Macron's government is waiting for recommendations from the nuclear regulator ASN, which are due by 2020-21, before deciding.
However, the EDF internal documents show that two new reactors are to be built by 2030 to renew the fleet. EDF leader Jean-Bernard Levy has said publicly that he expects France to build 30 new generation reactors over the next few decades.
Hulot told the daily Liberation before his resignation that Macron would likely support these plans. "If I go, there will be three more reactors in the coming years," he said in the interview that was released Tuesday after he quit.
Hulot joins a long list of environmental ministers who have broken their inability to influence energy policy and left early. France has had 13 environment ministers over the last 20 years.
Delphine Batho, Minister for former President Francois Hollande, described in 2014 how the EDF Director-General acts as a "shadow minister" who "does not sit at Cabinet meetings but still decides France's energy policy".
France has long campaigned for the nuclear safeguarding of its energy independence. His scientists had a leading role in the study of radioactivity.
Industry experts expect a new minister to become more flexible. "He or she will be a doormat," said a source familiar with French energy policy, asking to be unidentified.
Macron was able to choose between several environmental specialists in his LREM party, including Hulot's deputy Brune Poirson and Nicolas Lecornu, both of whom are considered pragmatists, and ADEME chief Arnaud Leroy, who helped Macron write his energy program.
He could also elect Parliament President Francois de Rugy or legislator Barbara Pompili, who come from the ecology movement.
Letter from Geert De Clercq; Edited by Richard Lough, Georgina Prodhan and Edmund Blair