15 May 12

Statement by Vincent de Rivaz following Nuclear Development Forum

Statement at Nuclear Development Forum

Vincent de Rivaz CBE

CEO of EDF Energy

Secretary of State, I am delighted that in chairing your first Nuclear Development Forum you are demonstrating consistency and continuity of government policy on new nuclear.

I am pleased to join you here today:

to affirm confidence in our collective ability to deliver this policy

to affirm that we should maintain momentum together through this year.

to affirm that we can and will reach a fair and balanced agreement thanks to the Contract for Difference feed in tariff.

and to affirm that the apparent challenge of withdrawal by others is an opportunity to think of a ‘programme’ that delivers synergies and shared expertise

Confidence in delivery

Why am I confident that new nuclear can be delivered?

The budget showed this Government's continuing commitment to carbon reduction and the Queen’s speech last week was an important milestone for the energy sector. It did not disappoint.

I warmly welcome the announcement that

there will be legislation to reform the electricity market and that the timetable is being maintained.

The Government is delivering on its commitment in last year’s white paper and in December’s technical update.

It has confirmed that there will be transitional arrangements so that investors – like ourselves for Hinkley Point - can take early investment decisions. We have already formally expressed our interest in these. Vincent de Rivaz - Statement at NDF, 15/05/12

I am very pleased to see that the legislation will also establish the ONR as a fully independent and strong nuclear safety regulator.

We have matched this tangible progress with our own.

We have progressed since the meeting of this forum in October, last year:

We announced a series of contracts at the Franco-British summit in Paris in February making a total of £650m. I look forward to more good news as we confirm arrangements for the main civil works.

Our applications for site licence and planning consent are making good progress – the Planning Inspectorate started its 6 month examination on 21 March;

We are working with the Office for Nuclear Regulation and Environment Agency to resolve remaining GDA issues,

We have begun our site preparation works at Hinkley Point. Let me assure you this work is very visible on the ground

Maintaining Momentum

Having made this progress together,

we must all maintain momentum.

I confirm what I have said many times before,

we, and our partners Centrica, aim to take our final investment decision at the end of this year.

Continued progress on EMR and agreement on transitional arrangements will be vitally important for that decision.

I look forward to the work on pre-legislative scrutiny by the Energy and Climate Change Committee and then the process of legislation to achieve Royal Assent as early as possible in 2013.

We will also need to be sure that the European Commission understands and supports the basis of the planned improvements to the UK electricity market to deliver the secure, affordable, low carbon energy the country needs, which is a shared European objective.

By working together with AREVA, the ONR and the EA,

we can close out the GDA by the end of the year. Agreement on the remaining design issues is within our grasp.

The review by the planning inspectorate of our application for Hinkley Point must reach its conclusion and we must take forward the similar process for Sizewell.

It is also important that host communities appreciate and see direct benefits from hosting these vital projects. I hope we will see this principle enshrined in regulations.

We have made good progress with Government on the long term liabilities. We fully support the principle that the operator must build in the costs of decommissioning and waste management.

We fully support the principle that the operator must build in the costs of decommissioning and waste management.

The government has proposed that the cost of transferring waste and spent fuel to the government after a station has closed will be capped, albeit at a very high level.

albeit at a very high level.

2 Vincent de Rivaz - Statement at NDF, 15/05/12

This is correct since the costs of ultimate waste disposal are outside our control.

We must work together to progress this in detail.

We need to make sure this contract achieves the intent and fits with the planned Contract for Difference.

A Balanced Arrangement

This CfD offers low carbon projects the revenue confidence they need to justify the large upfront investment.

It has to represent a good deal for the consumer in an uncertain world.

in an uncertain world.


it has to provide an appropriate return to investors commensurate with the risks they are taking.

The government’s position is clear: No support should be given to new nuclear that is not available to other low carbon generation.

In their words, no subsidy.

We and our suppliers must control the costs and we must learn the lessons of previous projects. Nuclear has to be cost competitive with other low carbon generation. The CfD will reflect this requirement.

and The CfD will reflect this requirement.

Over the coming weeks and months, our focus has to be on detailed discussion of the CfD – in particular the five main attributes:

Price; duration; change of law; payment model; indexation.

With the right level of commitment, we can reach agreement and achieve an outcome that will be good value for the nation, electricity consumers and investors.

A balanced deal that is fair to all parties. And

by being fair, a deal that is sustainable for the long term.

An Industrial Programme

We have also seen E.ON and RWE’s decision to withdraw from Horizon.

It is obviously their responsibility to transfer the development of this project to new developers. I will not add to speculation about it.

When we talk about new nuclear in the UK, what we must have in common with potential acquirers of Horizon is the need to protect and nurture four precious attributes for the success of new nuclear in the UK:

cross party consensus

widespread public acceptance

a strong, credible and independent safety authority

an engaged UK supply chain

3 Vincent de Rivaz - Statement at NDF, 15/05/12 4

The current, and I hope temporary, uncertainty around the future of Horizon, puts even more emphasis on getting Hinkley Point across the finish line of FiD. With our partner Centrica, we strive to achieve it at the end of the year.

We will not get distracted from this objective.

I remain convinced of the importance of all decision makers having a perspective that recognises the benefits of a ‘programme’ with an approved design – versus a disjointed approach with fragmented design decisions.

With a programme vision there is no doubt that all sorts of potential synergies can be developed.

In this regard our Hinkley Project is not only leading the way, it is paving the way.


To conclude:

All of us here need to project the view to possible investors in new nuclear in the UK that it offers good prospects. The second half of this year is key to this.

I thank you for the opportunity to reaffirm:

A sense of confidence that new nuclear in the in the UK should and will go ahead.

A sense of urgency, since

2012 is the defining year.

A sense of conviction that the CFD is a recipe for a fair and sustainable deal –

where our financial discipline will combine with our industrial capability.

A sense of opportunity that a programme vision is relevant for the UK.

I thank you for the opportunity you gave me to confirm that our Hinkley Point project is on track. There is a huge amount that must be done. We are determined. We are focussed on having a viable business case at the end of this year.

EDF is not wavering in its determination to find solutions affordable for all parties. EDF has no reason to waver. And I say this confidently on the very day that a new President takes office in France.

In its response to events last year in Japan the UK again showed how truly the wartime maxim "Keep Calm and Carry On" reflects the national view.

So my closing thought to all today is that now is a good time to carry on and to keep calm.