Électricité de France (EDF), the world’s largest nuclear generator, began its withdrawal from U.S. nuclear on Tuesday, citing market changes spurred by cheap natural gas.
The company that is majority owned by the French government announced on Tuesday it was pulling out of the Constellation Energy Nuclear Group (CENG), a joint venture it holds with Exelon Corp., which operates three nuclear power plants in New York and Maryland.
Exelon on Tuesday announced that the three plants—the 577-MW R.E. Ginna Nuclear Power Plant in Ontario, N.Y., the two-unit Nine Mile Point Nuclear Station in Scriba, N.Y., and the two-unit Calvert Cliffs Nuclear Power Plant in Lusby, Md.—will be operationally integrated into the Exelon Generation nuclear fleet over the next nine months.
Under terms of the agreement, the CENG plant operating licenses will be transferred to Exelon; Exelon will integrate the CENG fleet under its management model; and EDF will retain a put option to sell its CENG stake to Exelon at fair market value between 2016 and 2022. EDF will also receive an immediate dividend of $400 million.
Exelon Generation is the largest operator of commercial nuclear plants in the U.S., with 17 reactors in 10 locations. EDF is the world’s largest nuclear operator, with 58 reactors with one under construction in France. CENG was formed as a joint venture between Constellation Energy and EDF in 2009 to hold and oversee operations of the three Constellation nuclear plants. Exelon, based in Chicago, and Constellation, based in Baltimore, completed their merger on March, 12, 2012. Through that union, Exelon became EDF’s partner.
EDF’s Chair and CEO Henri Proglio was quoted by The Wall Street Journal on July 30 as saying that EDF sees "no room for nuclear to expand in the U.S. at this time." Proglio reportedly told the The Financial Times that prospects for nuclear power had dimmed by the shale gas revolution, which had “completely reshaped the landscape of electric power generation in favour of gas.” Proglio also reportedly said EDF would shift its focus in the U.S. to renewable energy sources.
Sources: POWERnews, EDF, Exelon, The Wall Street Journal, The Financial Times