EDF is turning the page of nuclear in the United States

31/07/2013 00:55

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French energy group EDF, which is a leading energy player and the largest operator of nuclear plants in the world, announced is abandoning nuclear energy in the United States, citing the impact of cheaper shale gas that transformed the market.

Therefore, EDF signed an agreement with its US homologue Exelon which paves the way for the French group's exit from the nuclear sector in the USA. Under the deal, Exelon will be initially in charge of the operating management of five nuclear reactors with a total capacity of 3.9 gigawatts, run by their joint venture Constellation Energy Nuclear Group (CENG) in the USA. EDF reiterated that it had agreed to a put option with their partner, allowing them to sell their stake in CENG to Exelon at a fair value from January 2016 to June 2022. The nuclear operator said that they will receive USD 400 million from CENG in the form of exceptional dividends. The transaction will allow EDF to reduce its debt of approximately € 300 million and will have a slightly accretive effect as early as 2015. EDF will maintain its governance rights in CENG, but it will transfer the risk of nuclear operations. The agreement is subject to the approval of the Nuclear Regulatory Commission (NRC) and the relevant regulatory authorities. It should be completed in 2014. Shale gas triggered the closure of several nuclear reactors in the US. The former it is cheaper, secondly it has become less economical to operate. As a result, utilities are now reluctant about investing money in nuclear power plants to keep them running. EDF entered the US nuclear market six years ago.

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