January 17, 2013 / 6:22 PM / 7 years ago

EDF plans talks with China's CGNPC on UK nuclear plants

PARIS (Reuters) - French group EDF (EDF.PA) is to start discussions with Chinese state-owned nuclear firm CGNPC about forming a partnership on its project to build the next generation of nuclear power plants in Britain, a top EDF official said on Thursday.

Herve Machenaud, EDF’s director of production and engineering, also said that the risk of further delays and more cost overruns on completing its new technology European pressurised reactor (EPR) at Flamanville in northwest France was “infinitely small” and past problems would not jeopardise EDF’s search for a partner in the UK.

Machenaud confirmed that EDF has proposed forming a new alliance with CGNPC for the UK project.

“They said they were interested ... the talks will start,” he told reporters during a tour of Flamanville.

EDF plans to build four EPR nuclear reactors in Britain, with the first two adjacent to its existing advanced gas-cooled reactors at Hinkley Point in Somerset, and the other two next to its Sizewell B pressurised water reactor in Suffolk.

EDF’s junior partner in the British development project is utility Centrica (CNA.L), which also has a 20 percent stake in the company’s eight existing UK nuclear power plants.

The Wall Street Journal newspaper said last week that EDF had had talks with CGNPC about taking over Centrica’s stake. A spokesman for Centrica responded by saying that the company continued to be involved in the project.

CGNPC is already EDF’s longstanding partner in China and in November the two companies along with French nuclear engineering group Areva AREVA.PA signed an agreement to jointly develop a new type of reactor.

The EPR under construction in Flamanville, northern France, is years behind schedule and billions over budget. Estimated to cost 3.3 billion euros in 2005, the bill has been increased several times since, most recently in December, when EDF said costs would total 8.5 billion euros ($11 billion).

That revision prompted EDF’s Italian partner Enel (ENEI.MI) to pull out of the project.

Machenaud said that while further delays were highly unlikely, they could not be ruled out.

“We are in industry, not in a syrupy novel” he told reporters.

Reporting by Benjamin Mallet; Writing by Geert De Clercq; Editing by Leila Abboud and Greg Mahlich

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