EDF to pull out of US nuclear due to shale boom

French power company EDF (EDF.PA) is to withdraw from the US nuclear market because of the way shale gas has altered the American energy sector.

Instead, EDF will focus on developing its renewables business in America. However, the company has stressed that its nuclear intent elsewhere in the world ” particularly the UK ” remains strong.

EDF chief executive Henri Proglio (pictured) said the prospects for nuclear power in the US had been dealt a major blow by the “true revolution” of shale gas, which he said had “completely reshaped the landscape of electric power generation in favour of gas“.

Speaking at a news conference this morning, he said the “spectacular fall of the price of gas in the US, which was unimaginable a few years ago, has made this form of energy ultra competitive vis a vis all other forms of energy”.

“The circumstances for the development of nuclear in the US are not favorable at the moment. We are a major player in nuclear, but we are not obsessed by nuclear. Our development in the US will focus on renewable energy ” that will be our vector of growth in the US.”

EDF is to pull out of Constellation Energy Nuclear Group (CENG), which it half owns as a joint venture with US energy company Exelon. CENG operates five US nuclear plants with a total capacity of 3.9 GW.

It has agreed a put option that allows it to sell CENG to Excelon between 2016 and 2022,at which time it will also receive an exceptional dividend from CENG of $400m.

Proglio was speaking as EDF unveiled its half-year results, which he said showed a “good operating performance”.

EBITDA was €9.7bn, up 6.9 per cent on last year, of which 6 per cent was organic growth. On the back of the results, EDF has revised up its operating performance targets for the year to 3 per cent of organic growth.

At this morning’s press conference in paris, Proglio said the colder than usual winter across Europe had played a part in lifting EDF’s results, as had heavy rainfall across many parts of the continent, which had boosted the company’s hydropower resources.

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