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France says it is to fully nationalise energy giant EDF

Half of the firm’s ageing reactors in France are currently offline as the country faces Russia energy squeeze 

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Electricity transmission pylons and cooling towers at the Tricastin Evolutionary Power Reactor (EPR) nuclear power plant, operated by Electricite de France (EDF), in Saint-Paul-Trois-Chateaux, France. Photograph: Theo Giacometti/Bloomberg

Electricity transmission pylons and cooling towers at the Tricastin Evolutionary Power Reactor (EPR) nuclear power plant, operated by Electricite de France (EDF), in Saint-Paul-Trois-Chateaux, France. Photograph: Theo Giacometti/Bloomberg

Electricity transmission pylons and cooling towers at the Tricastin Evolutionary Power Reactor (EPR) nuclear power plant, operated by Electricite de France (EDF), in Saint-Paul-Trois-Chateaux, France. Photograph: Theo Giacometti/Bloomberg

The French government is to fully nationalise EDF, taking control of the heavily indebted business amid a Europe wide energy crisis.

In Ireland EDF is one of the backers of the planned €2bn Codling Wind Park wind energy field off the Wicklow coast which is expected to be capable of supplying electricity to up to 1.2 million homes.

French Prime Minister Elisabeth Borne confirmed the decision yesterday. EDF is already 84pc state owned and is one of Europe's biggest utilities and sits at the centre of French nuclear strategy that the government is counting on to blunt the impact of soaring energy prices exacerbated by the prospect of an abrupt halt to Russian gas supplies.

Instead of being an ace in the government's hands, however, it has become a major headache owing to years of delays on new nuclear plants in France and Britain, with budget overruns in the billions of euros.

"I confirm to you today that the state intends to control 100pc of EDF's capital,” Ms Borne said in her policy speech in the lower house of parliament as she set out her minority's government priorities.

"We need to ensure our sovereignty in the face of the war (in Ukraine) and the looming colossal challenges," she said, adding that full nationalisation would help EDF to carry out "ambitious and essential projects" for France's energy future.

Half of EDF's ageing reactors in France are currently offline, in some cases because of corrosion problems, forcing the company to cut planned nuclear output repeatedly this year at a time when Europe is scrambling to find alternatives to Russian gas supplies.

EDF has also been hurt by government rules forcing it to sell power to rivals at a discount as part of efforts to shield French consumers from a sharp increase in cost of living.

That is a big strain on EDF's finances because the group sells forward its estimated nuclear output before the end of the budget year and has had to buy back sold electricity in a volatile market with prices at historic highs.

The company has estimated that output losses will reduce its core profit by €18.5bn and the discounted power sales will cost it a further €10.2bn. Its debt is projected to rise by 40pc this year to more than €61bn.

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