UPDATE 2-EDF says no new Hinkley Point reactors without more French state help

* Union says possible March 30 board decision on Hinkley

* CGT union starts staff referendum on Hinkley Point

* CGT wants delay, says Hinkley could be ‘fatal’ for EDF

* CEO says risks surmountable, sees investment decision soon (Adds details from CEO letter)

By Geert De Clercq

PARIS, March 11 (Reuters) - EDF chief executive Jean-Bernard Levy said in a letter to staff the utility will not go ahead with its plan to build two nuclear reactors in Britain unless it gets more financial support from the French state.

In a letter to EDF staff seen by Reuters, Levy said EDF is negotiating with the government in order to obtain commitments that will allow it to secure its financial situation before it commits to building reactors at Hinkley Point in Britain.

“It is clear that I will not engage in this project as long as these conditions are not met,” Levy wrote.

Levy did not specify what kind of commitments he expects.

EDF’s CGT union said in a note to staff that management could push for a final investment decision on the 18 billion pound (23 billion euros) project at a March 30 board meeting.

The union started an online referendum for staff, asking it to answer yes or no to the question of whether the EDF board should delay its decision on Hinkley Point.

CGT also said that conditions are not ready for Hinkley to go ahead. “It could deal a fatal blow to the company,” the union said.

But even if a majority of staff were to vote for a delay, a referendum cannot stop EDF and its 85-percent state shareholder from going ahead with the project.

Levy said contractual and industrial aspects of the UK project have been examined by independent experts, which gives EDF the confidence to definitively commit to it.

“A review of the risks end-2015 shows these are well identified and surmountable,” Levy wrote.

Levy reiterated the first concrete would be poured in 2019 and that Hinkley would benefit from the experience of Areva-designed EPR reactors under construction in France and China, which should be ready by then.

He acknowledged some problems with those projects, but said the design has now stabilised and only 20 percent of the EPR design for Hinkley would be changed compared to Flamanville.

UK power price guarantees were robust, Levy said, and Hinkley Point would have good profitability of 9 percent over 60 years. Britain will pay 92.50 pounds per megawatt-hour for 35 years, about three times current market rates.

Levy said Hinkley Point would represent about 15 percent of EDF’s investments over a 10-year period, leaving enough funds for French reactor upgrades, smart meter rollout as well as investments in renewables and foreign expansion.

“This is a good project and in the very near future, all conditions will be ready for a definitive launch,” Levy said.

EDF’s CFO resigned last week over the company’s Hinkley plan, sources told Reuters, saying he considered it too risky. (1 euro = 0.7753 pound) (Reporting by Geert De Clercq; editing by Alison Williams, G Crosse)


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