EDF announces big push into solar, sees cost at 25 billion euros

PARIS (Reuters) - French state-owned utility EDF announced on Monday plans for a big push into solar energy in France that is likely to cost around 25 billion euros as the government tries to meet its climate goals.

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Speaking a day before Paris hosts a climate summit, the company’s CEO said EDF aimed to build 30 gigawatt (GW) of solar capacity from 2020 to 2035 and that the investment would be mainly funded by equity partners, project financing and loans.

“EDF’s solar plan is in line with the government target of rebalancing the French electricity generation mix thanks to the massive deployment of renewables,” Jean-Bernard Levy told reporters.

France wants to reduce the share of nuclear in power generation from 75 percent today to 50 percent by around 2035 and wants to massively boost renewables investment.

Levy said that given strong opposition against wind turbine construction, solar was virtually the only option for boosting renewables capacity.

EDF - which had just 0.2 GW of solar capacity in France at the end of 2016 - will build on average 2 GW of solar capacity per year for 15 years, starting with 1.5 GW per year in 2020-2025, then 2 GW/year in 2026-30 and 2.5 GW/year in 2031-35.

“We are not number one in solar today in France, but we want to build up a leadership position,” he said.

Levy said EDF would work with the government to free up land for solar. As one megawatt of solar requires about one hectare - and costs about 1 million euros - EDF estimates the area needed for 30 GW at about 25,000-30,000 hectares. That corresponds to nearly three times the surface of Paris.

EDF will use industrial wasteland and decommissioned power plants as well as floating solar panels on the lakes behind its hydro power dams.

It will count on the French state to issue sufficient tenders for solar capacity in order to catch up with neighboring countries.

Environment minister Nicolas Hulot said in a statement that France would boost the annual solar tender volume by one gigawatt to 2.5 GW per year, without saying how long this would continue.

In France, where nuclear accounts for 75 percent of power generation, the share of solar is just 1.6 percent, compared to 2.5 percent in Britain, 6.2 percent in Germany and 7.8 percent in Italy.

Levy said the solar investments would not impact the 50 billion euro budget set aside for EDF’s “grand carenage” upgrade to its fleet of 58 nuclear reactors, which have a combined capacity of 63 gigawatt.

EDF is also continuing studies for the construction of new nuclear plants in France and is working on an optimized version of its Areva-designed EPR nuclear reactor.

“The government can count on us to be a major player in the energy transition, which means a power generation mix with less nuclear and more renewables,” Levy said.

Reporting by Geert De Clercq; Editing by Brian Love and Gareth Jones