EDF, the world’s biggest nuclear plant operator, is pulling out of nuclear energy in the United States.
The market has been transformed by the increasing amount of electricity that is being produced by cheap shale gas.
The French utility company announced that it was pulling out of CENG, its joint venture in the US with Exelon, which operates five nuclear plants. Exelon will take over operation of the CENG plants, while EDF considers the option of selling its 49.9% stake in the venture, between 2016 and 2022. EDF will also receive an immediate dividend of $400m.
The decision comes after realising how big the investments needed to extend the nuclear reactor’s lifetimes were going to be, and the unpredictable fall in the price of shale gas in the US.
International Energy Agency analyst Dennis Volk said CENG’s US power plants located in the east of the country were at the centre of some of the most competitive power markets in the country. With high price competition, growing wind capacity and cheap gas, the landscape of electric power generation has fallen in favour of gas.
Chief executive of EDF, Henri Proglio said the drop in prices caused by shale gas had “no significant impact” on their nuclear project plans in the UK, where long-running negotiations with the government over the construction of new atomic power stations have been taking place.