EDF to stick to nuclear, eyes power leadership

PARIS Tue May 24, 2011 3:06pm BST

Related Topics

Quotes

   

PARIS (Reuters) - French utility EDF aims to become the world's biggest power group by 2020 and will forge ahead with its nuclear investments despite safety doubts cast by Japan's Fukushima disaster, Chairman Henri Proglio said.

In an interview with French newspaper Le Monde, Proglio said the former monopoly expected to lift its power output capacity to 200 gigawatts (GW) by 2020 from 150 GW now, overtaking rival GDF Suez, which has targeted a 150 GW capacity by 2016.

"In 2020, EDF must be the world's first electricity company, able to go and seek growth where it is," Proglio told the French newspaper in an interview released ahead of EDF's shareholder meeting. "We are aiming for 200 GW by organic growth."

Nuclear power will remain EDF's mainstay, with half of the group's future production derived from it.

Fukushima "does not call nuclear into question," Proglio said, referring to the world's second-worst nuclear accident after Chernobyl, which took place at the quake-crippled Fukushima Daiichi nuclear power plant in March.

Proglio said he expected many new nuclear projects around the world to be "delayed or postponed" but insisted countries such as China, the United States, Russia, Britain, Turkey would stick to their plans.

"Nuclear will be more selective and more demanding," said Proglio, whose company is 85 percent owned by the French state.

While EDF expects to have 50 percent of its power production made from nuclear, the other half will be split equally between gas and power, and hydropower and renewable energies, he said.

Proglio also reaffirmed EDF's interest in taking full control of Italian utility Edison, saying his group had no interest in taking minority or joint shareholding in core activities.

Analysts estimated the operator of France's 58 nuclear reactors would seek to build a strong business in gas or renewable energies to diversify its nuclear-dominated portfolio and reduce its exposure to France's regulated power tariffs.

Such a diversification was a precondition for EDF to regain investor favor, analysts said, after the stock shed two thirds of its value in the past 3-1/2 years.

EDF's stock was down 0.6 percent in early afternoon trading, compared with a 0.3 percent gain in the sectoral STOXX Europe 600 utilities price index.

On tariffs, Proglio told Le Monde EDF needed an average annual rise of 2.5 percent in French government-set power tariffs between now and 2015.

(Reporting by Marie Maitre and Benjamin Mallet; Editing by Dan Lalor.)

FILED UNDER: