20131208_AM
Source: BBC1: The Andrew Marr Show
URL: N/A
Date: 08/12/2013
Event: EDF CEO: "It is a challenge that we'll overcome if we are working together, joining forces"
Attribution: BBC1: The Andrew Marr Show
People:
- Vincent de Rivaz: CEO of EDF Energy (UK) Limited
- Andrew Marr: Journalist and political commentator
Andrew Marr: Rarely has energy policy been so high on the political agenda. And yet, power for homes and businesses is one of our most basic needs. Now, the combination of rising bills, the pressure to go green and warnings about possible shortages next winter has suddenly ignited, and for the past few weeks, energy has been the hot topic at Westminster. The energy companies have not had a good press, lately, criticised for making excess profits on the backs of their customers. Most of the bosses have, frankly, run for cover. Not, I'm glad to say, Vincent de Rivaz of EDF, who is one of the Big Six and who joins me now. Welcome, Vincent, thanks for coming in.
Vincent de Rivaz: Good morning.
Andrew Marr: Now, the Chancellor was telling us that, last week, £50 is going to be coming off every energy bill - that's not true, is it. Your customers are not going to get £50 off.
Vincent de Rivaz: Well, I think bills are actually hurting, and it's not good enough for the energy companies to say nothing can be done.
Andrew Marr: Yes.
Vincent de Rivaz: That's why we were the first to take action, because I was confident that we will be able to bear down the costs. And that's why we have limited the rise of our bills, in anticipation of what has happened, when the government decided, in working jointly with the industry, to find solutions to bear down the costs.
Andrew Marr: So you made the cut ahead of time, as it were, rather than afterwards, but to be clear, your customers on fixed-term contracts won't see £50 now coming off their bills.
Vincent de Rivaz: There are a lot of our customers which are on fixed-term contracts. It is a good deal, and, by the way, Andrew, we have won, in the last three years, 600,000 customers. But I think we need to work together, politicians and industry, to address this real issue of the rising bills, because they are a real issue, they are hurting and I think action can be taken.
Andrew Marr: Yes.
Vincent de Rivaz: On the short term, action can be taken, and we have shown it, and I think more can be done.
Andrew Marr: Have you been asked to freeze prices until 2015?
Vincent de Rivaz: No, we have not been asked to freeze prices.
Andrew Marr: Could you?
Vincent de Rivaz: What - what, Andrew, what I think is very important is that we have to work together to bear down the costs. On the short term, because we have this rising bill issue, which is a very big short-term issue, but at the same time -
Andrew Marr: Yeah.
Vincent de Rivaz: - we need to think about the long term. We need to invest in this country - massive investment -
Andrew Marr: And I want to come on to that very much.
Vincent de Rivaz: - to keep the lights on. And, you know, long-term and short-term, the challenges are the same - how to do that in an affordable way. How to do that in such a way that we do not abandon the vulnerable, that we do not drop our environmental objectives, and at the same time we keep the lights on, in making the investments -
Andrew Marr: It's very difficult, and I want to talk about that in a minute. Just before I do, however, what about the idea of a price freeze, the Labour idea of freezing prices for 18 months or so. Would that work?
Vincent de Rivaz: I mean, the politicians are right to ask questions, they are right to challenge us, and there are many ways to address these questions. I think the best way, frankly, is to join forces to bear down the costs. It is what we have proposed - we are the first to take action and we need, I think, to do more, because there is [sic] more opportunities to bear down the costs in the future.
Andrew Marr: It has been said that if you brought in a price freeze, the energy companies would simply raise the prices before the freeze came in and then, the minute it finished, raise the prices again, so it actually wouldn't be a freeze. Is that fair?
Vincent de Rivaz: No, I think we should not behave like that. We have a responsibility, we should be a force for good and to be part of the solution. On the short term, as I have said, we have taken action. On the long term, we are also taking action, and it is from meaning of the deal we have had with the government, recently, regarding massive investments that will be made in the UK in Somerset -
Andrew Marr: Right.
Vincent de Rivaz: - to build new nuclear power plants.
Andrew Marr: As I understand it, because of the carbon agreements with the EU, and so on, all our coal power stations have to be decommissioned by 2020. That - as things are at the moment - that's 40% of our total capacity, plus the fact that a lot of nuclear power stations are closing. Is it possible to keep the system running, given that level of closures?
Vincent de Rivaz: Yes it is, if the investments are made, obviously, and you know, I mean, we are discussing a lot about all these matters. I believe that the government is taking action - the reform which has been taken is working. Where is the evidence? The deal we have got with the government to invest £16 billion in the UK economy in Somerset, creating jobs and opportunities -
Andrew Marr: This is the third nuclear power station at Hinkley Point.
Vincent de Rivaz: Yeah, absolutely. This deal would not have happened if the government had not taken action to reform the market, to attract investors -
Andrew Marr: In China.
Vincent de Rivaz: - to create, to create the confidence that investors need to have, in the long term, and, at the same time, at a fair price for the customers. The customers will not pay a penny in the next decade, whilst we will be building these nuclear power plants.
Andrew Marr: Is this actually going to happen, first of all? I mean, it's not been signed off yet, has it.
Vincent de Rivaz: I'm very confident. Of course we have some hurdles to overcome - closing the finance of the project as a whole, getting the clearance of Brussels. But we have the foundation of it, so this deal, which was discussed - and I have to say, for a fact, that they were very tough negotiations. They took a long time and the government fought very hard on the taxpayers' behalf. And, ultimately, I think we have a fair deal.
Andrew Marr: But it's a very, very expensive deal for the taxpayer. I mean, I think the government has guaranteed the price, from this power station, at double the current level of power, for 35 years, which is why the EU and many others are looking askance at this deal.
Vincent de Rivaz: No, I am not looking at cancelling this deal, don't -
Andrew Marr: "Askance" - I just mean that they're unsure about it.
Vincent de Rivaz: Okay. They are going to investigate, as they should do - it is the rule, and we are prepared, it is totally expected, it is going okay and we'll expect the decisions in mid-2014. But the customers - because we stand on the side of the customers - they will not pay one penny in the next decade, whilst we'll be building these plants.
Andrew Marr: But then they'll pay a lot, afterwards.
Vincent de Rivaz: No, no, They will pay, they will pay a price, which is a fair price, which attracts investors' confidence, and at the same time, fair for the customers - it would be cheaper that [than?] other technologies, it will be a price which will be unde- will not be dependent on the fossil fuel imported, with all the volatility of it - I think it's a fair deal.
Andrew Marr: All right -
Vincent de Rivaz: And, by the way, if it was not a fair deal, it would not be a doable deal.
Andrew Marr: All right. I was looking around for a kind of neutral source of information about all of this - because everybody's a partisan player of one kind or another. The Royal Society of Engineering did a big report on energy security, and they thought there's a serious danger - if just a few things went wrong - of the lights going out, next winter. Were they right about that?
Vincent de Rivaz: I think we will get the lights on, this winter. There is a reserve margin, what we have -
Andrew Marr: Very small...
Vincent de Rivaz: - above what we use. Yes, but we have enough for this winter.
Andrew Marr: What about next winter? That's the thing -
Vincent de Rivaz: And for the next years, what we need to do is to make these investments thoroughly [?], which are required, and to make them in a way which is affordable for the customers. We need to -
Andrew Marr: Sorry, what does that mean, in terms of the kind of generation? Does that mean more nuclear?
Vincent de Rivaz: There will be more nuclear, because there is this first deal, and I am sure there will be others after ours. There will be more renewables. I mean, we need to pick up the right energy mix and, at the same time, we need to keep our homes more energy-efficient. That is our common challenge. It is a challenge that we'll overcome if we are working together, joining forces. I'm not ready to enter any political row, and I'm not ready for that.
Andrew Marr: Not yet...
Vincent de Rivaz: No, no. I'm not - it's not my business. My business - it does not help the customers. What does help the customers is to examine the cost, to see if there is a better way forward. And I think there are [sic] better way forward. We have proven recently, in making a proposal, and the government has taken action. It's a first step - I think we should go further.
Andrew Marr: So, more nuclear power stations, with different companies and different deals around the country, for the future, you think.
Vincent de Rivaz: Yeah. And it attracts investors.
Andrew Marr: All right.
Vincent de Rivaz: You have mentioned - you have mentioned the Chinese.
Andrew Marr: I have.
Vincent de Rivaz: It is a very good and positive signal given. The British Prime Minister was in China last week, the French Prime Minister was in China last week, we are together at the same time, more or less, in China, which means that there are strong political links between our three countries. We know these companies for 30 years - we have been building, operating nuclear power plants in China with them, they will be our partners. The electricity market reform is working, it's attracting investors -
Andrew Marr: All right.
Vincent de Rivaz: - I think it will help to keep the lights on, in a way which is affordable for the customers. Because we all need to stand - our 15,000 employees are very much a force for good -
Andrew Marr: Thank you.
Vincent de Rivaz: - on the side of the customers.
Andrew Marr: Okay. Thank you very much, Vincent to be joining us this aftern- this morning.