25 Apr 12

Talk Power 2012 speech by Vincent de Rivaz


Powering on: investing for growth and a sustainable future

Vincent de Rivaz CBE

25 April 2012

Good morning.

Let me wish you a warm welcome to this year’s Talk Power conference.

For EDF Energy this is a vitally important event in our calendar.

We strive to lead our industry in the way we work with our largest customers.

Today provides a key opportunity for us to meet, and to talk.

It is also an opportunity for us to listen to you.

It gives us a chance to hear and respond to the issues you want to raise.

I know that a key priority for business is that developments in UK energy policy do not adversely impact competitiveness.

That’s why this year we will talk about the positive actions Government, business and energy companies are taking, and have still to take, to improve our collective prospects at a difficult time.

We will look at how coming investments in new infrastructure and in improving efficiency will be key to driving sustainable growth and improving UK competitiveness.

We will show that we are committed to approaching these issues in a spirit of openness, co-operation and trust.

Society has learnt a great deal from the financial crisis of recent years.

We increasingly recognise that we must live within our means.

In the past we have been too focused on the short term, on derivatives, sub-prime mortgages and leveraged balance sheets, and not on long-term risks and opportunities. Vincent de Rivaz Talk Power 2012

Have we not continued to emit more and more carbon dioxide each year, with little thought about the future impact of climate change?

Have we not sweated our infrastructure, to serve today’s needs?

If we have, it is because we have not given enough thought to building the infrastructure our economy, our businesses our society will need in ten, twenty or fifty years time.

To live within our means we must commit to our future today.

What does this mean for us, as an energy company?

It means being cost conscious in placing ourselves on the side of our customers.

Delivering the best possible value for you, and doing so in a transparent way, which helps you understand how the costs stack up.

By acting together, we are able to show we are all in it together.

That requires us to be forward-thinking in our investment plans: in services, in technology, in customers, in communities, in people and in new infrastructure.

To secure an affordable energy mix for you, our customers, we are:

Investing £300 million each year in our current nuclear fleet, to deliver life extension and maintain our high standards of plant safety.

Investing £860 million in a new, high efficiency, 1300 MW CCGT gas station at West Burton, Nottinghamshire.

Investing £100 million each year in our existing 4000 MW coal fired power stations in Nottinghamshire, which continue to have an important role to play as we transition to low carbon generation.

And investing in renewables, particularly onshore and offshore wind Today we operate 260MW, a further 260 MW will come on-line by the middle of next year, and we plan to have up to 1,200 MW by 2020.

We invest to secure an affordable energy mix for all our customers.

For now, let me focus on our plans for nuclear.

We plan to invest in four new nuclear power stations in the UK, starting with two stations at Hinkley Point in Somerset.

With our co-investor Centrica, we aim to take a final investment decision for Hinkley Point C around the end of the year.

In planning these investments, our vision is that they will have great benefits for our customers, and for the UK.

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They will make a major contribution to delivering the secure supplies of energy that you and our economy demand.

And they will help to keep energy affordable, for you, and for households around the country.

Our investments today will help you to secure your competitive positions for the long term, with immediate benefits for the short term.

We will create thousands of skilled jobs, in engineering, construction, and manufacturing industries.

At the Anglo-French summit earlier this year, held between our Prime Minister and the French President, we signed an agreement with Kier / BAM, worth over £100million for site preparation works at Hinkley Point.

We also announced that day a £15m investment with Bridgwater College to establish a world class training centre.

We are delivering jobs now, and leaving a legacy of skills development.

We will play a major role in reinvigorating the UK’s engineering and construction sector.

We will be following in the footsteps of John Armitt and his team at the Olympic Park.

What they have achieved in driving forward productivity and professionalism has been exemplary.

We will hear more from John later.

It is one way in which London 2012 has been an inspiration for the future.

We have adopted the same spirit for our project at Hinkley Point.

Our motto is: "creating more than just a power station".

We are creating jobs, opportunities, and growth.

We are continually building momentum behind our plans. .

We have made progress since our conference last year:

We have begun our site preparation work at Hinkley Point.

We have applied to the Infrastructure Planning Commission for a Development Consent Order for our project. We have a clear timetable for when the IPC decision will be made and we are making good progress.

And, in December last year, we received interim regulatory approval from the nuclear safety authority for the design of our chosen reactor.

We have also worked to learn all lessons from Fukushima last year.

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So I am pleased to say that one year on, UK nuclear plans remain on track.

Nonetheless the recent announcement from the Horizon consortium has caused some to ask questions about new nuclear.

EON and RWE say their decision relates to their finances, and the consequences of Germany’s decision on nuclear.

Both companies maintain that nuclear has an important role to play in the UK.

For our part – let me be clear.

We are getting on with the job.

We are gathering pace.

Our determination needs to be matched by visible momentum from Government.

We will hear shortly from Lord Sassoon about what Government is doing.

In particular, it is absolutely critical that the Government continues to make steady, tangible progress with its Electricity Market Reform plans.

I am pleased that both Lord Sassoon and Simon Virley are here to talk further about that today.

The Government’s plans will help us and others deliver the investments that we need to maintain secure, affordable energy supplies.

Central to those plans is a Contract for Difference Feed-in-Tariff.

This is at the heart of delivering low carbon investment.

Let me explain what it is.

It is a contract designed to deliver:

Competitively priced energy for our customers – for everyone in the room today.

Affordability and security for policy-makers

And certainty for investors

It will help to ensure that we make a fair profit, based on an adequate return.

Put simply, who here in the business community who is used to making deals can imagine a deal that is unbalanced in favour of either investors or customers, having any chance of surviving?

For a deal which is not balanced, is not stable and it is not sustainable.

It is therefore in the interests of investors as well as customers to want something that is fair.

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It is only with a sustainable system that we will be able to deliver our investments.

One of the facets of sustainability is affordability.

What is not affordable is not sustainable.

It is what I mean, when I say we cannot live beyond our means.

I believe that all this is down to the fundamental challenge of our society: the battle for trust.

This battle for trust is central to our core responsibility to deliver value for our customers.

Last month I launched our Customer Commitments under the banner of earning your trust - our acknowledgment that we can go further in building trust amongst our customers.

I also announced our groundbreaking Blue+Price Promise domestic tariff.

It offers a promise to tell customers if any supplier is more than £1 a week cheaper, with no termination fee if they want to leave.

It is a new step in our efforts to build trust into everything we do.

So today I am very pleased that I am able to announce the next step on that journey through launching Our Business Customer Commitments.

They are clear, measurable, and made to you and to all of our business customers.

We commit to delivering for you:

Fair value – helping to give you greater control of your energy costs…

– helping to give you greater control of your energy costs…

Our new live energy dashboard service developed for London 2012 and launched today, is an innovation proven to revolutionise employee engagement to improve energy efficiency.

Better service – providing you the right level of support and account management…

– providing you the right level of support and account management…

One of our flagship commitments here is to help start-ups through the first, critical phases of business.

We hope that adds real value in the current economic climate.

To that end we will offer good value rates in contracts that last months rather than years, are free of termination fees, and provide extra energy saving and debt management advice.

And finally, after fair value and better service - simplicity – making it easier for you to get the products and information you need…

– making it easier for you to get the products and information you need…

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We will provide a more integrated package of services, helping you save energy with certainty of the outcome, and to generate your own low carbon power.

Our new customer commitments officer, will monitor progress on these business customer commitments together with the commitments we have made to our residential customers.

This is part of our ongoing journey to strengthen our relationships with all our customers, and to rebuild trust in the energy market.

These are not just words.

We are already delivering for customers.

Let me give you some examples...

Working with the Government Procurement Service, the largest B2B energy contract ever to be awarded, we have already put in place 730 supply agreements with public sector bodies. For one Government Department, we are developing a fund for energy saving investments across departmental buildings. Rather than simply offering a discount, this approach will deliver a far greater, longer-lasting, benefit.

And our current contract with a major high street retailer commits us to energy efficiency savings of at least £1m per year for 3 years. We have delivered that saving this year. Now we are seeing the beginnings of a change of culture in energy efficiency. Our Energywise campaign saved nearly £70,000 in its very first month and stores have commented on just how well staff have become involved.

Let me conclude as a proud sponsor of the Olympic and Paralympic Games.

As sponsors of London 2012, we are proud to support the ODA to achieve its carbon reduction targets with a programme to fit energy-saving technology in 12 Olympic borough schools.

This will reduce energy costs by roughly a quarter, saving more than 700 tonnes of carbon emissions every year.

And, in respect of the Olympic and Paralympic Games, I am pleased that we will also be joined later today by one of our great medal hopes this summer, Liz Johnson.

Before I hand over to the Commercial Secretary to the Treasury, Lord Sassoon, it remains for me now to say again welcome, and to wish you a stimulating and useful day – a day which will be a new landmark between EDF Energy and our B2B customers.

Thank you.