By Forrest Crellin and Alban Kacher
PARIS (Reuters) -French utility EDF will need to invest some 460 billion euros ($542.39 billion) by 2040, mainly in its domestic nuclear fleet, but rising debt and cash flow issues pose major challenges, the French Court of Auditors said on Wednesday.
Nearly all of France’s 57 nuclear reactors are over 30 years old and require extensive maintenance to continue operating, even as EDF plans to develop another six reactors over the next several decades.
“Everything related to … preserving the competitiveness of the French economy, involves energy bills,” Ines Mercereau, president of the Court of Auditors, said at a hearing in front of the National Assembly.
About a fifth of the needed investments will have to go into keeping the existing nuclear fleet operational until they are 60 years old, costing about 5 billion euros to 6 billion euros per year, the Court of Auditors said in a report.
The utility is expected to finalise its plans for the new EPR2 reactors by the end of the year, allowing them to assess costs to make a final investment decision by the second half of 2026. The court estimates the total cost of the first six reactors at 75 billion euros.
EDF’S DEBT POSES A CHALLENGE TO FUND RAISING
Investing in its electricity network subsidiary Enedis is expected to cost anther 100 billion euros, as the grid will need to be modernised and reinforced, the report said.
EDF is expected to have difficulties raising capital alone for these investments due to its debt, which ballooned in 2022 during the European energy crisis, and its cash flow trajectory, the report said.
The utility has faced difficulties implementing its new long-term contract scheme to replace the old system that contracted out about a third of its annual production as plummeting market prices have hurt EDF’s ability to draw clients, the report said.
To address these issues, the court urged the utility to continue to monitor profitability of its renewable investments and for a clear distribution of costs and risks between the French state, EDF and its customers.
“This will not, on its own, resolve the EDF group’s debt situation,” said Mercereau.
($1 = 0.8481 euros)
(Reporting by Forrest Crellin and Alban KacherEditing by Bernadette Baum)
