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France has ousted the chief executive of the state-owned nuclear power group EDF after months of tensions over strategy and the risk of cost overruns in the construction of six new reactors.
Luc Rémont, who had been at EDF since November 2022, would be replaced by Bernard Fontana, the current head of Framatome, a subsidiary of EDF that builds reactors and components, the Élysée Palace said on Friday.
EDF runs the country’s fleet of 57 nuclear plants that generate roughly 70 per cent of France’s electricity, and commercialises nuclear projects abroad.
Rémont succeeded in the initial challenge of restoring the output of the fleet of reactors after a period plagued by technical problems, and was in the early stages of a plan to build new more powerful, yet costly ones, known as the EPR2.
But his term was marred by continued spats with the state, which nationalised EDF through buying out the minority shareholders in 2023. The Elysée decided not to renew Rémont’s three-year term that was set to expire in June.
A major point of contention was over Rémont’s plans to revamp how EDF sells electricity to big industrial companies with energy-intensive activities. In the past, the company was legally required to sell fixed amounts of electricity to them at a price approved both by the French government and the European Commission.
With those rules expiring next year, Rémont had been set to combine market pricing with the signing of long-term contracts with customers in energy-intensive industries. But the offers attracted few companies since the terms and prices were less attractive.
In parallel to long-term contracts, EDF said this month that it would launch a new auction-like process for other industries, including foreign buyers, in a move that angered energy-intensive groups in France.
Benoît Bazin, chief executive of building materials maker Saint Gobain, said on Monday that EDF was “giving the middle finger to French industry” with its pricing offers.
Nicolas Goldberg, an energy expert at Colombus Consulting, said the tensions with the government and EDF’s major customers had reached a breaking point.
“Rémont’s style is different from those of others and he’s been defending EDF’s commercial interests, treating it as any other business with a special shareholder,” he said. “Like him or not, he played the role he thought was his: to defend EDF.”
Another source of tension with the government came over early-stage plans to build new EPR2 reactors. The state has been wary after EDF’s most recent new reactor at Flamanville was finished more than a decade late and cost more than four times its initial budget at €13.2bn.
It became a cautionary tale for the global nuclear industry. As a result, the government was pushing Rémont to come up with a timetable and budget for the six new reactors, which he had yet to deliver.
On Monday, the planning council for French nuclear strategy emphasised that EDF needed to “strengthen its industrial control of the programme”. It urged EDF to “step up efforts to control costs and timelines, and to present by the end of the year a firm estimate, both in terms of budget and schedule”.
The Cour des comptes, France’s state auditor, sounded the alarm in a January report about the risks of the new EPR2 reactors to be built in France, but also those planned in the UK at Hinkley Point and Sizewell.
It warned that EDF was facing “a significant increase in cost and a two-year delay” at Hinkley Point, exacerbated by the withdrawal of a Chinese minority shareholder, while delays were mounting at Sizewell.
“The accumulation of risks and constraints could lead to a failure of the EPR2 programme,” the Cour des comptes noted. “Construction cost overruns and uncertainties regarding the profitability of the EPRs pose a risk to the shareholder — that is, the state.”
