2 Jun 14

Vincent de Rivaz addresses Eurelectric annual convention & conference

Good evening, ladies and gentlemen, and thank you, Angela, for that introduction.

I must first pay tribute to Energy UK.

It is a relatively young organisation in its current guise, but it already plays a vital role in bringing together our industry – both large and small players, across generation and supply, as well as our system operator.

To find its own voice, it has to listen to different views, catalysing and leading important debates in a pragmatic and non-ideological way.

I would like to welcome you all to London, and especially your Chairman, Mr Teyssen, and all the Eurelectric team, to this historic venue.

We’re here close to Tower Bridge, which I am proud to say is powered by EDF Energy’s low-carbon nuclear-backed electricity.

I am delighted, on behalf of EDF Energy, to be the sponsor for tonight’s reception…
…We are very much looking forward to the next two days, to discussing the issues facing our industry across Europe.

The European context

Among all the issues to be discussed, there are two big ones:

Firstly, security of supply…

And secondly, the trust between citizens, customers and our power industry.

As it happens, recent events have reinforced the relevance of these two issues.

Namely, the crisis between Russia and the Ukraine has underlined the importance of security of supply.

The European Council has called for measures to “accelerate further diversification of energy supply”.

And the European Parliament elections have reinforced the need to restore trust between politicians and citizens, echoing the similar challenge between our industry and its customers.

We have both the responsibility, and the opportunity, to do something about this.

And we can do it.

Our mission is to stand on the side of customers.

Customers see their bills going up.

But they doubt the evidence of more security and diversity of supply, and greater reduction of CO2, which should justify their rising bills.

And they don’t see yet the full benefits of energy efficiency measures, nor of the development or smart grids and metering.

They are eager to reap the fruit of IT innovation.

They strive not only for power, but for empowerment through the digital revolution.

The challenge is where customers fit in this big picture of energy policy.

Rebuilding trust

In the UK we are expecting a full Competition and Markets Authority inquiry into the market.

I welcome it – because it is an opportunity to establish what should be done to make the market work better.

That is precisely why I called for this inquiry nearly three years ago.

We need to start this process not with a defensive mindset.

I relish this opportunity to clear the air to rebuild trust.

And we know there can be no trust without transparency.

With this transparency we will show we stand on the side of customers.

It is our responsibility to deliver that.

Securing investment - EMR

The second challenge we face is securing investment in decarbonised generation affordably.

The UK’s approach – agreed with cross-party political consensus – has been to fundamentally reform the electricity market.

The reforms are about creating a better market, not a lesser market.

A market that strengthens the European internal market.

That supports focus on European carbon targets and on security and diversity of supply.

A market that will deliver – over time – the considerable new investment in generation and interconnection that we need.

The UK pioneered market liberalisation, and has now recognised, in a pragmatic way, that there are instances of market failure.

EMR is about addressing these failures:

The carbon price floor seeks to address the carbon market failure, while waiting for the much-needed reform of the ETS to succeed…
…Whilst Contracts for Difference and the capacity market address the investment failures…

They are fundamental in the transition to a low carbon economy.

State Aid
It is within this context that EDF and its partners are planning a new nuclear power station – 3200MW - at Hinkley Point in Somerset.

The investment contract for Hinkley Point C is being scrutinised by the European Commission.

The case is progressing.

The right for individual member states to choose their own energy mix is a starting point.

That said, Hinkley Point C is vital not just for the UK.

It is entirely consistent with the goals that we share across Europe – security and diversity of supply, decarbonisation and affordability.

I believe the proposed contract is proportionate, and the right long-term investment…
…providing stable prices and lower costs for consumers, whilst avoiding overcompensation for investors.

Investors still face construction and operation risk.

The Contract for Difference is a market instrument.

We are very conscious it will create a precedent for Europe.

I believe it is a good one, because it will strengthen security of supply…
…promote growth, jobs and skills…
…reinforce European industrial stamina…
…and encourage people to think big and long-term.

Above all, we all agree we need more competitive electricity for competitive industry – vital for Europe in an increasingly competitive world.

This type of contract is about partnership – between the public and private sector, between us and our suppliers, and us and our equity partners.

Eurelectric and concluding remarks

Partnership is vital for all of us.

Good partners are not uniform - they are complementary to each other.

Sensible European policy will only be built out of sensible national policies.

The same applies for Eurelectric.

It is my view that, as an organisation, all of us have to work together to find a strong voice.

A forum that does not settle for the lowest common denominator, but which is ambitious, strong, and assertive about what is good, with pragmatism and not ideology.

Through collaboration, we stand a better chance of successfully meeting the challenges we all face.

Eurelectric continues to be an excellent forum for this collaboration.

Welcome again, to you all, and to your Chairman, to London.

I hope that we have a constructive conference.

And, very importantly, an enjoyable evening.

Thank you.