October 15, 2014 / 9:02 AM / 5 years ago

UPDATE 3-France ousts pro-nuclear head of power group EDF

(Adds detail on new appointment Levy)

By Emmanuel Jarry and Benjamin Mallet

PARIS, Oct 15 (Reuters) - President Francois Hollande ousted the pro-nuclear boss of France’s main power utility EDF on Wednesday, replacing him with the head of defence electronics firm Thales a day after a new pro-renewables policy became law.

Outgoing Chairman and Chief Executive Henri Proglio had been seeking to renew a mandate that expires next month.

But his pro-nuclear views and status as a 2009 appointee of conservative former president Nicolas Sarkozy sat uncomfortably with the policy of Hollande’s Socialist administration, which pushed through a new law on Wednesday that caps nuclear production at the current level.

“You really get the impression he had to have Proglio’s head, that Hollande wanted to stamp his authority on the situation and give a signal that he is in charge,” one source close to EDF management said.

The source spoke as 59-year-old Thales chief Jean-Bernard Levy was named as new head of EDF, the western world’s biggest electric utility by stock market value and the holder of an international asset portfolio.

The move signalled “a new phase” for energy policy and for EDF, which is 84 percent state-owned, government spokesman Stephane Le Foll said. He also noted that Proglio, 65, would reach the maximum age for the role in two years’ time.

Levy, 59, began his career in the telecoms industry and, like many top French company executives, he also worked as a senior civil servant.

He was chief of staff under former post and telecoms minister Gerard Longuet between 1986 and 1988. In 2002, he became chief executive of telecoms and media group Vivendi , helping rebuild it after a series of acquisitions that had failed to deliver on their early promise and left the group heavily indebted.

Levy took up his current post at Thales, another company in which the government has a significant stake, in 2012 after disagreements over strategic direction at Vivendi.

He attended the same secondary school as Hollande, but his political affiliations are less clear. Minister Longuet worked under the then prime minister Jacques Chirac, even though Socialist President Francois Mitterrand was in power at the time.

RENEWABLES LAG

This week, the government enacted a new energy bill aimed at reducing French dependence on nuclear power to 50 percent from 75 percent.

Hollande has said there should be closures of nuclear plans to achieve this, but Proglio has insisted that the transformation could take place through growth in supply of other types of energy generation.

Segolene Royal, France’s fourth energy minister since Hollande took power and the mother of his four children, has staked her reputation on ushering in more renewable energy.

Under Proglio, EDF has invested in renewables and efficiency, but those business lines have always taken a backseat to EDF’s core nuclear business. France lags other countries in the renewables scene.

EDF was late entering the wind business, which it did by acquiring a private company, since then renamed EDF Energies Nouvelles. The unit now has gross installed capacity of 7.2 gigawatts in wind and solar energy. That amounts to around 5 percent of EDF’s installed capacity of 140 GW, of which 53 percent is nuclear.

“Reappointing Proglio would be to leave in place an enemy of the new policy,” said Corinne Lepage, a former environment minister, speaking before the news that he was to go.

Shares in EDF were down about 2.3 percent on Wednesday, while the market index was down by 2.9 percent. Thales shares were down about 2 percent. (Additional reporting by Benoit Tessier and Geert De Clercq; Writing by Andrew Callus; Editing by Elaine Hardcastle and Jane Baird)

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