INVESTIGATION (1/3). EDF, the roots of a crash: "A normal company would go bankrupt"

We should be the kings of oil. As the whole of Europe prepares for a difficult winter, with candles lit hoping to escape the freezing temperatures and power outages, France, its national electrician and its 56 nuclear reactors had all the cards in hand to make it through the quiet period. . An electric oasis in the heart of the storm. This is what our country could have been. In this parallel world, forever reconciled with the atom, EDF would have run its power plants at full capacity, sold its abundant production to our neighbors at prices that defied all understanding – up to ten times more expensive than last year. at the same time – and reaped superprofits that might have earned him a tax, but which would have been particularly useful for financing the colossal investments that lie ahead.

Unfortunately, the reality is quite different. At the precise moment in which he could have demonstrated the relevance of the nuclear choice, fully exploiting his industrial tool, the former monopoly seems to be cracking on all sides. Over-indebted, paralyzed by corrosion problems that forced it to shut down a dozen reactors, mired in long maintenance work, asphyxiated by the tariff framework and constantly torn apart by the contradictory injunctions of the state shareholder. Without means, without spring and without vision, “the favorite company of the French” is nothing but a shadow of itself.

Whose fault is it ? To his subsequent executives, whom no strategic or managerial error has ever led to question. To public decision makers, unable to trace the contours of a coherent energy policy. Twenty years of shaky deregulation, of which EDF has often perceived the disadvantages, but more rarely the advantages. Finally, to the social and cultural inertia that surrounds a house that continues to live on all levels in the illusion of its past greatness. We measure quite well the task that awaits the future boss of the tricolor electrician. He is titanic and, to be honest, almost existential, in light of the current debacle. This “energy of 1940”, as a local character calls it. Will we be able to learn the lessons of this strange defeat?

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Chapter 1: How Did We Get Here?

Their landing is expected in a few weeks. And this perspective is obviously enough to lighten the mood. By the end of the fall, EDF will receive reinforcements from dozens of American workers who are expected to solve some of its problems. This team, in terms of welding, is a bit like the “New York Philharmonic Orchestra”, it ignites the Ministry of Energy Transition. To afford the services of these virtuosos, the executive and the tricolor company had to negotiate hard with Westinghouse, their employer. And of course paying a high price for their arrival … But did they have a choice? As the cold season approaches, EDF is engaged in a race against time. The group has promised to restart half of its nuclear reactors, which are currently closed, as soon as possible, and all means are good to speed up the times, to avoid the disastrous scenario of a general power outage.

This request for help speaks volumes about the fever that reigns in the first European electrician. In any case, it illustrates the terrible difficulties that EDF has to face at the end of “a terrible yearIn December the production of the nuclear fleet will reach a maximum of 300 terawatt hours, the lowest level since 1990. A volume that is far from guaranteed: it presupposes a massive and rapid return to service of many reactors, which many specialists are unlikely. This half-auction production is a real problem for our electricity supply, it also has devastating financial repercussions for a company simultaneously required to apply the tariff shield and forced to resell part of its electrons to competitors at bargain prices, to limit the bills skyrocket. The effect of this explosive cocktail is now well known: this year it will cut its operating income by 29 billion euros. A colossal burden that stuns the energy world “A normal box would go bankrupt”, says a boss in the sector. The French electrician, he, will be renationalized, which is not really a guarantee of a start … Co How did we come to this?

Listened to a few days ago by the parliamentarians, the outgoing CEO of EDF, Jean-Bernard Lévy, tried to justify this hellish spiral: the heavy work done on some reactors in the park to extend their life up to forty years; Covid, which completely upset the maintenance program and delayed the work needed to put some reactors back into service, and obviously the huge tile, this corrosion phenomenon discovered on the secondary circuits of a handful of reactors, which led to the shutdown of a dozen of them. A combination of unexpected events, a bad combination of circumstances, in a way …

Collapse of availability

But in the group’s entourage, even internally, we buy less and less the theses of bad luck. “For me, the collapse of production is an industrial failure as troubling as the Flamanville EPR,” says a former executive of the house. And that does not go back to yesterday: “The availability of nuclear power is a problem that has been under the carpet for fifteen years”, annoys the manager of an EDF branch, one day fart in the face. “Just scroll through the group’s reports to check it: between 2006 and 2019 – well before Covid and the corrosion problem, therefore -, the availability of the French fleet compared to its theoretical maximum power had already collapsed, going from 83.6% to 74%.

An intrinsic, persistent fragility, considered sufficiently worrying by the public authorities for the improvement of this relationship to be at the forefront of the EDF boss’ missions. Until Henri Proglio, its variable compensation also partly depended on the volume of electrons produced each year. Appointed in 2009, Jean-Bernard Lévy’s predecessor had made it one of his flagships, promising a return to abundance in 2011, then in 2015, with the “Generation 420” plan (for 420 terawatt hours), destined to return to the levels reached in 2006. Nothing will happen. And things have only gotten worse since then …

Stop that stretch

Therefore, in the last five years, the non-ten-year interruptions (routine, for refueling or corresponding to periodic inspections) have been spread over an average duration of ninety-four days. Three times longer than the stops made by American operators, and almost forty days longer than in the mid-2000s. However, even here, the pandemic does not explain everything. “The management has not taken the measure of the problem, accuses the former EDF executive. There is a problem of organization, human resources, concerns about spare parts, quality of service providers”. “With the most standardized fleet in the world, they should be kings of maintenance, an industry expert abounds.

Half of the nuclear fleet has stopped, collapsing availability

L’Express / EDF nuclear monitor

The reality is that, even ignoring the inherently unpredictable unforeseen events, EDF does not respect its own schedules. “Without the shift in the program having aroused many reactions at the highest level of the hierarchy.” There is a habit of failure “, sums up a familiarity with the company, even a form of resignation in the face of some aberrations of the system: “Have you ever visited a plant ?, asks an EDF manager. The workers spend almost a quarter of their time at work entering and leaving the construction site. It is completely absurd. ”An example among the many possible improvements to increase operational performance. Commissioned by the former Minister of Ecology Barbara Pompili in 2021, the experts of the Egis studio have just presented a report highlighting the many causes of management inefficiency power plants, and proposing the development of a “national productivity plan” to optimize maintenance and shutdowns of the nuclear fleet.

Jean-Bernard Lévy, stays straight in his boots. As he had done at the Medef Meetings at the end of August, the future former CEO of EDF once again denounced the inconsistencies of the state shareholder, according to him the main responsible for the current difficulties, before the Economic Affairs Committee of the National Assembly. In the sights: the government’s 180-degree turn, now in favor of relaunching nuclear power after having planned the closure of 14 reactors, and, in general, the limited financial room for maneuver granted to the company. “If the sector could have started projects earlier, we could have recruited more employees, who we could have mobilized and moved in emergencies to deal with on the current fleet”, justifies the EDF boss, without questioning himself. on possible internal shortcomings.

This latest release did nothing, it is suspected, to restore its image within the executive. “It is not because the state decides to build a railway line that arrives on time at the station”, we reply to the Ministry of Energy Transition. But all of this will soon become history. In a few days, Jean-Bernard Lévy will hand over his office on avenue de Wagram to a new boss, who will have to examine very quickly, and without blinders, the causes of this industrial collapse. On top of the huge pile of files that awaits him at EDF, his successor knows that another emergency is looming: the construction of new nuclear power plants. For this alone, very few in the small Parisian business world would like to be in his place …