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Viewing cable 10PARIS227, French Electricity Leader en route to the U.S.

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Reference ID Created Released Classification Origin
10PARIS227 2010-02-24 16:57 2011-08-24 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Paris
VZCZCXRO2273
OO RUEHIK
DE RUEHFR #0227/01 0551657
ZNR UUUUU ZZH
O 241657Z FEB 10
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8405
INFO RUCPDOC/USDOC WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 2188
RUEHGZ/AMCONSUL GUANGZHOU 0021
RUEHRO/AMEMBASSY ROME 9296
RUEHLO/AMEMBASSY LONDON 7321
UNCLAS SECTION 01 OF 02 PARIS 000227 
 
SIPDIS 
SENSITIVE 
 
STATE PASS USTR 
 
E.O. 19528: DECL: N/A 
TAGS: ENRG ECON ENRG ETRD EINV PREL FR CH
SUBJECT: French Electricity Leader en route to the U.S. 
 
PARIS 00000227  001.2 OF 002 
 
 
SENSITIVE BUT CLASSIFIED.  NOT FOR INTERNET DISTRIBUTION. 
 
1. (SBU) Summary:  Henri Proglio is making his first trip to the U.S. 
as CEO of Electricite de France (EDF).  His goal is to gauge 
potential American partners and review the firm's U.S. investments. 
EDF plans to expand as a "diversified service company" that can 
operate different nuclear reactor types, but also develop renewable 
energy projects, and advise on energy asset management and energy 
optimization.  Proglio noted different trends in nuclear energy 
market development: France is highly concentrated (one reactor 
operator), the U.S. diversified (23 operators), and China somewhere 
in between with three operators.  In the long-term, the EDF CEO 
estimated that nuclear power could make up for 40 percent of 
America's electricity.  End summary. 
 
2. (SBU) On February 18, Ambassador Rivkin met with Henri Proglio, 
CEO of state-owned Electricite de France.  The Ambassador requested 
the meeting to discuss EDF's business plan on the eve of Proglio's 
roadshow in the U.S. (February 24-26) with stops in New York, Boston, 
and Washington/Maryland.  In addition to meetings with financiers, 
analysts, and the Department of Energy, Proglio will review the 
economic and financial terms of the firm's investment in 
Constellation Energy.  The EDF CEO said his overall objective is to 
learn more about potential American partners for the firm's nuclear 
energy development strategy.  He also intends to bolster EDF 
activities in U.S. renewable energy markets and energy asset 
management (sectors in which its U.S. subsidiaries "EDF Energies 
Nouvelles" and "EDF Trading North America" are specialized). 
 
EDF: A Diversified Service Company 
---------------------------------- 
 
3.  (SBU) Driven by the conviction that EDF must do more than power 
generation, Proglio wants the firm to be a "diversified service 
company".  EDF could operate a range of nuclear reactors with 
different technologies, he confirmed.  To be competitive, EDF should 
not be limited to French suppliers and the European Pressurized 
Reactor (EPR), he said.  After all, "we are not married to Areva", 
added Gerald Wolf, EDF Senior VP for International Operations.  EDF 
recognizes that new customers may want smaller reactors and have 
different capacities and regulatory issues, Proglio said. 
 
Coordinator in an International Supply Chain 
-------------------------------------------- 
 
4.  (SBU) Proglio sees EDF's future lying beyond the realm of a 
traditional French utility.  EDF is a coordinator and player in an 
international supply chain, he stressed.  EDF operates 58 nuclear 
reactors in France, but it runs another 24 in foreign markets, 
Proglio noted.  Moreover, EDF has projects to build new generation 
reactors in the U.S., the U.K., China, and Italy.  Looking ahead, it 
makes sense to diversify EDF's strategic partnerships from an 
industrial policy standpoint, he told us.  Although the GOF would 
argue otherwise, Proglio is convinced the French nuclear industrial 
supply chain lacks the capacity to meet EDF's international business 
plan. 
 
How Many Operators? 
------------------ 
 
5.  (SBU) Turning to nuclear energy development, Proglio recalled 
that the French market is highly concentrated with a standardized 
pool of reactors and a single operator, EDF.  The arrangement has led 
to gains in efficiency, economies of scale, common safety practices, 
labor training, and social acceptability.  Proglio said that the U.S. 
should keep this in mind as it pursues a much more diverse civil 
nuclear energy market with four competing reactor designs and 23 
operators.  On the long-term prospects of the U.S. nuclear energy 
market, the EDF executive estimated that nuclear power could make up 
as much as 40 percent of electric power in the U.S., (up from the 
current 20 percent), given the U.S. energy mix. 
 
On China 
-------- 
 
6.  (SBU) Proglio discussed EDF's entry into the Chinese nuclear 
generation market.  He told the Ambassador that the Chinese decided 
to limit the domestic market to three reactor operators.  Each 
operator will have a clear and specific role and mission.  Further, 
civil nuclear energy development will be restricted to a few Chinese 
provinces.  Proglio observed that the advantage of working with the 
China Guangdong Nuclear Power Company (CGNPC) was that the decision 
making process goes quickly and the Chinese build fast. (Note: last 
 
PARIS 00000227  002.2 OF 002 
 
 
December, the Chinese authorities approved the creation of an 
EDF-CGNPC joint venture which will build and operate two EPR nuclear 
reactors in Taishan, with EDF's holding fixed at 30 percent for 50 
years.  End note.) 
 
Not just about Nuclear 
---------------------- 
 
7.  (SBU) In the U.S., EDF anticipates expanding services in asset 
management, energy optimization, and energy efficiency.  EDF's 
industrial strategy is not just about nuclear generation, he argued. 
The U.S. market offers the EDF Group opportunities for further growth 
in other energy markets - hydraulic, thermal, and renewable energies. 
 (Note: in the last few years, EDF Energies Nouvelles has also 
diversified into ocean power and biofuels.  End note.) 
 
RIVKIN