In the spring of 2015, Engie, formerly GDF-Suez, had received approval from the Turkish parliament to build and operate a nuclear power plant in Sinop, in the north of the country, for commissioning that was not expected until 2025.
While Engie’s strategy in the new nuclear sector has been the subject of many questions for several months, an initial answer was given on Tuesday: the energy company will sell its 40% in NuGen to its Japanese partner Toshiba. The joint venture was to build a 3.8 gigawatt (GW) nuclear power plant in Moorside, north-west England.
The French group has used a clause in NuGEN’s shareholders’ agreement, which gives it the right to ask Toshiba to repurchase its shares in certain cases of default: the bankruptcy of Westinghouse, Toshiba’s subsidiary, on March 29, provided the opportunity. The deal is based on the amount of investment committed by Engie, valued at 15.3 billion yen (127 million euros).
Faced with the recurring rumors of its withdrawal from the new nuclear power, Engie assured it a few weeks ago that no decision was taken on the subject. The group had simply indicated looking for partners to go down to 20% on NuGEN. But since then, Engie has embarked on a strategy of profound transformation, focusing on renewable energies and services, where the place of the new nuclear power is far from obvious. The group, which operates seven reactors in Belgium, is also considering a search for partners on its local subsidiary Electrabel, or even its listing.
But Isabelle Kocher, Managing Director of Engie, mobilizes the company around three main businesses: renewable energies, gas and its infrastructures and energy services.
Engie does not seem to consider the new nuclear power as the engine of the energy revolution in progress: the new post-Fukushima nuclear power is expensive (more than 100 euros per megawatt hour for the Hinkley Point EPR, operated by EDF).
Given Belgium’s decision to exit nuclear power in 2025 and the political situation in Turkey, where its partner Mitsubishi is conducting the feasibility study for the construction of a new 4,400 MW power plant, the chapter of the new nuclear seems to close for Engie.
Engie’s priority today is to succeed in the vast work of energy transition and to focus on the only renewables whose costs are constantly decreasing. In many countries, wind and photovoltaics are now operating without subsidies.
Engie affirms that it remains” willing to contribute its know-how and expertise to the NuGen project through its subsidiaries Electrabel, Tractebel, Endel, Axima and Ineo and to remain a major contributor to the European nuclear industry. This segment represents an activity of 800 million euros. But this is a drop of water in the Engie empire (67 billion turnover).
EDF involvement in Sinop
The departure of Engie is another opportunity for its competitor EDF strategic partnership with Mitsubushi. The French operator approached the manufacturer of Mitsubishi Heavy Industries (MHI) reactors as part of the restructuring of the French nuclear sector. The two groups signed a Memorandum of Understanding on Tuesday (June 28th) to strengthen such cooperation.
It should in particular result in the entry of the Japanese conglomerate in the capital of Areva NP, future subsidiary of the French electricity giant. A logical partnership since MHI is already co-developing with Areva NP the medium-power Atmea reactor (1 000 MW), which is supposed to complete the French range alongside the EPR (1,650 MW).
This agreement with MHI also brings EDF, through its subsidiary of construction of reactors, into the project of the Turkish power station of Sinop.
Butr EDF does not intend to enter the capital of Sinop. According to its CEO, Mr. Jean-Bernard Levy, It is a job as an engineer, a supplier of know-how, involved in the project.
EDF will be mainly involved in safety. “The reference reactor for the safety of the Turkish Atmea will be Flamanville 3.
Despite its financial difficulties and the failures of the Flamanville site, EDF remains a beautiful business card for its partners, whether Japanese or Chinese. MHI also intends to rely on the expertise of the French electrician to play his card in Vietnam, especially against Rosatom and Toshiba-Westinghouse.
