Interview of Vincent de Rivaz– CEO of EDF Energy

Mr. Vincent de Rivaz, CEO of EDF Energy, was recently interviewed by Denis JANIN on behalf of the British and French Nuclear Young Generation Networks (NI/YGN and SFEN/JG). Mr de Rivaz , who’s a keen photographer, has recently been decorated with the French highest order the Légion d’Honneur. He kindly accepted our invitation to give his impression on several different topics ranging from the nuclear new build business in the UK to the French nuclear industry.

Could you briefly present your career path?

I joined EDF in 1977 as a fresh hydroelectric engineering graduate (Ecole Nationale Supérieure d'Hydraulique de Grenoble) and have spent my entire career within the group. My first position was in the External Engineering Centre which managed the construction of energy sites for international clients. I took part in several initiatives in Africa, Guyana and New Caledonia.

From 1985 I managed over seven years the Far East region for EDF. Our aim was to place EDF as a major international player in China. At that time, we were the first people to fly the EDF flag in China by developing projects in different areas of activity such as the nuclear, thermal and hydro generation sectors.

Between 1991 and 1994 I was the Managing Director of the Hydro Power Department. I then worked as the Deputy Head of the EDF International Division, creating and managing a new Projects Department. This enabled me in particular to be involved in the acquisition of London Electricity in 1998.

After a couple of years as the Head of Strategy and Finance for the EDF Group, I was appointed Chief Executive of the London Electricity Group in February 2002. This position enabled me to create EDF Energy in 2003 through the merger of former London Electricity Group and Seeboard. In January 2009, EDF Energy incorporated British Energy (BE) and I became the CEO of this company. EDF Energy, which is a wholly owned subsidiary of EDF group, is now one of the UK’s leading energy companies.

Could you describe in a nutshell the activities of EDF Energy and the reasons behind the recent acquisition of British Energy?

EDF Energy is the largest electricity company in the UK and has a unique position. We currently operate 15 nuclear reactors in the country and are ranked number one for electricity generation, and electricity distribution while leading on low carbon energy development.

We generate around one fifth of the UK's electricity, employ around 20,000 people, and deliver electricity to more than 8 million customer households and businesses. As a diverse but nevertheless integrated business, EDF Energy has two main plans for the future: the growth of our customer market share and the development of new nuclear power plants. In both endeavors, the fact of having incorporated British Energy (BE) will help us to achieve our ambitions.

First, BE’s eight existing nuclear power plants allow us to provide greater price certainty for our customers over the long-term, through the safe, reliable low carbon energy generated.

Secondly, following our coming together with British Energy, we also now own land where we plan to build new nuclear power stations, including Hinkley Point in Somerset and Sizewell in Suffolk. And with BE on board we now have all the skills, know-how, and relations that will help us drive new nuclear build in the UK. For example, BE has helped us to develop further our relations with the UK safety authority, supply chain partners and local communities which are all critical key partners in our new build business.

The UK plans to build several new nuclear power plants in the forthcoming years. Why has the UK gone back to nuclear power?

There are two main reasons which explain why the UK is now back to nuclear power. First, the UK’s current position on electricity generation: our 15 nuclear reactors are currently generating up to one fifth of the UK’s electricity demand and all but one of these reactors will be retired by 2023. Therefore it is necessary to build new nuclear reactors in order to replace the current ones.

The second reason is regarding carbon emissions. Since 2003, the UK government has implemented a strong policy to enhance the development of low carbon energies in order to reach its 2020 CO2 emission targets. This, coupled with the requirements of energy independence & security of supply prompted the government to include new nuclear power within the future energy mix.

As a result, it is suggested that nuclear power could represent up to 30% of the British energy mix in the long term and that the first of some 16 GWe of new generation plants are expected to be online in 2018. All of this will grow the share of nuclear energy in the UK’s energy mix from one fifth to one third – and that is a real challenge. However, I really think it is a fair and realistic target.

What are the consequences of the recent general election in the UK likely to be for future nuclear new build projects?

This is not really an issue. As you know, a coalition has been set up between the Liberal Democrats and the Conservatives and they are now governing the country together. What has emerged very quickly from the Coalition Government is clarity. In particular, clarity over its commitment to deliver a low carbon future, with a commitment that new nuclear energy will play a key part of the new Government’s plans.

The new Government’s energy policies have been set out in the Coalition Agreement, which was published shortly after the election. First, it proposes the introduction of a carbon price floor which will strengthen the focus on low carbon technologies. I have been a strong proponent of this policy over the last months as it represents a guarantee for operators to produce energy at a competitive price. Secondly, the Agreement made clear that new nuclear power is firmly on the new Government’s agenda.

Going forward, the construction of new nuclear power plants in the UK will be validated though a National Policy Statement which will be voted on in Parliament in due course. I have no doubt on the result of the vote. I am also reassured by the comments of Chris Huhne, the new Secretary of State for Energy and Climate Change, who has already said that he will take a pragmatic approach to new nuclear power although his Liberal Democrat party has opposed it in the past.

In this “nuclear renaissance” in the UK, what will be the role of EDF Energy? What are the main challenges for your company?

We would like to build four EPR reactors by 2025, which will represent half of the first wave of new build in the UK. We are developing a business case for each of them as all new nuclear reactors in the UK will be built without any public subsidy. We also would like to be the leader in this new build process.

Our main challenge is the massive recruitment of people. Because human capital has to match our capital investment. We have to recruit, train and retain the talent that we need at a large scale. As a result, we have for example, signed agreements with several universities in the UK to enhance specific training for the UK’s nuclear industry and we are set to recruit 10,000 people over the next five years to support our investment plans and renew our growing workforce.

The second biggest challenge is to work together within the EDF group as an international project. Development of the EPR is an international program. It is the combination of common practices, combined design & procurement with a focus on local adaptation. EDF cannot survive without global thinking however we have to “act local” to develop our projects. We need therefore to coordinate our workforce at every level in order to reach our targets.

The first EPR reactor in the UK will be built by your company at Hinkley Point. Could you tell us more about this project?

We are scheduled to pour the first concrete at Hinkley Point in 2013. That means all licensing will have to be completed before the end of 2011. In this certification process, we are working in close collaboration with our partner Areva and we are, to date, making good progress past every milestone together. Currently, our local public consultations are also progressing well. We are working hard to consult and engage with the local community on our plans for new nuclear build.

At the same time, we have already taken steps to prepare the supply chain required for our new build plans. We are working not only with international suppliers on our projects but also with national and local suppliers. Today, we have already placed in excess of 40 contracts with UK’s suppliers.

Regarding FL3 feedback, we will learn a lot in Flamanville. But as I previously said, the EPR is a program. It must be understood as a whole. We have a series of EPRs which are going to be built in China, the UK and in France (FL3, and Penly). It allows us to combine all these projects as a big one whilst at the same time adapting to local constraints. This is what is making the project so exciting.

One word about the French nuclear industry. As a manager who has often lived abroad, what could you say about the current issues in France?

Nuclear power is a success story in France. Having 58 reactors supplying more than 400 TWh is a huge competitive asset for EDF and for France. The development of these reactors has been a great achievement for both EDF and Areva (Framatome) and this is why electricity prices are more stable and quite low in France.

However, the future of the nuclear industry is international. Therefore, we need to review our business model, evolving our practices. Whilst we will need to reform our way of working, we will build on the strength of our existing experience, and above all, continue to work together.

Here in the UK, EDF Energy has taken the lead in the nuclear new build development. We are proud to play this role even if it entails great responsibilities. Our relationship with Areva is excellent: the design application of the EPR has been submitted jointly and we are continuing our work as we progress step-by-step towards certification.

As for the current issues in France, all I can say is that it would be welcomed to see EDF and its main partners, including Areva, align their positions both in France and abroad and strengthen their relations based on mutual respect. I am confident that this wide pragmatic approach will prevail.

Do you have a message for the Young Generation, students & young professionals who intend to work in the nuclear industry?

Nuclear industry is a people business. All its success relies entirely on the quality of people. From researchers to engineers, managers or operators, at all levels, everybody has a part to play in this challenging human adventure.

Now, when we are recruiting and training many young people, the nuclear industry is providing huge opportunities for the Young Generation. But those opportunities also bring responsibilities - young people will need to ensure our focus on safety is unerring.

Another main responsibility for the next Generation is to break down some of the myths which still surround the nuclear energy. Nuclear power is a low carbon energy which has suffered from a bad image in our society for a long time. Nowadays this is starting to change and nuclear energy is no longer seen as a world of darkness and secrecy. The next generation will have to continue to show that the nuclear industry is open and transparent. In the meantime we have to accept that nuclear is only part of a diverse mix and that there are other options. We need to be rigorous in our openness, to convince the public, but not to impose on them.

As members of the Young Generation Networks, your aim should be to make the nuclear industry an inspirational industry for people as they plan their careers.

Regarding nuclear new build, we are facing a challenge not undertaken by anyone else in the business before. We have set the “nuclear renaissance” in theory. It’s now time to make it real and this is a challenge which has to be undertaken by passionate, focused and talented young professionals.

Other interviews of nuclear top managers are available on the SFEN-JG website: www.sfenjg.org/Interviews-de-dirigeants

Société Française d’Energie Nucléaire SFEN – Jeune Génération – Denis JANIN