PARIS (Reuters) - Green activist Nicolas Hulot was appointed as the minister responsible for environment and energy in the new French government on Wednesday, sending the share price of nuclear utility EDF (EDF.PA) down as much as seven percent.
EDF shares had rallied strongly since the election of centrist Emmanuel Macron as president on May 7 as investors expected a pro-nuclear energy policy from the new government.
But the appointment of Hulot - France’s best-known environmental campaigner and a former television documentary maker - as ecology minister raised doubts in investors’ minds about the strength of that commitment.
“The market is reacting negatively to Hulot’s appointment. There is a fear of a stricter ecological line given Hulot’s history as an environmental campaigner,” said Andrea Tueni, markets analyst with Saxo Bank.
Hulot has advised presidents from the right and the left on environmental issues but had until now always refused a ministerial post.
Hulot, who scores high in popularity polls, said he hoped the job would allow him to bring about change.
“I think, although I am not sure, that the new political situation offers an opportunity for action and I cannot ignore that,” Hulot, 62, said on his Twitter feed.
A pragmatist, Hulot has generally good relations with the French business world, and top French companies including 83 percent state-owned utility EDF - which he will oversee as a minister - are listed as sponsors of his foundation.
Hulot is not known specifically as an anti-nuclear campaigner but has been critical of nuclear energy and of EDF’s strong focus on nuclear, which accounts for 75 percent of France’s electricity generation.
The world’s biggest operator of nuclear plants, EDF has a 18 billion pound ($23.3 billion) project to build two nuclear reactors at Hinkley Point, Britain and needs to spend 50 billion euro ($55.7 billion) on upgrading its aging French nuclear plants. The planned takeover of Areva’s AREVA.PA nuclear reactor unit will also cost several billions.
In an interview with Liberation newspaper last month, Hulot said one of France’s main challenges will be to reposition EDF on a path that is compatible with a transition from dependence on nuclear power toward the use of more renewables.
“While elsewhere the energy transition accelerates, EDF gets closer to Areva, overinvests in costly nuclear projects like Hinkley Point, and does not invest enough in renewables,” he told the paper.
Asked by Le Parisien newspaper in March whether France should stop using nuclear energy, he said: “That is a medium-term target”.
“As renewable energy becomes more and more competitive, the nuclear industry business model belongs to the past,” he said.
Asked about a possible closure of the aging Fessenheim nuclear plant, which former President Francois Hollande promised but did not implement, Hulot said the closure was important but would have a social cost.
“We cannot impose a transition by force. The transition has to be done in an acceptable manner,” he said.
Unlike his predecessor Segolene Royal, who was minister of energy and environment, Hulot’s job title, “minister of ecology and solidarity”, does not mention energy, but government sources told Reuters he will be responsible for energy matters.
At a handover ceremony, Hulot praised Royal’s policies and said he would protect her legacy, which includes an energy transition law with a target to reduce the share of nuclear in France’s electricity mix to 50 percent by 2025.
EDF shares - which were down 2.5 percent at 9.23 euros just before Hulot’s appointment - slid further on that news to stand 7 percent lower on the day. They closed down 6.6 percent.
As economy minister two years ago, Macron put in motion EDF’s recapitalization and its alliance with Areva and he was a strong backer of the Hinkley Point project.
Macron’s Prime Minister Edouard Philippe also worked as a lobbyist for nuclear group Areva from 2007 to 2010.
Additional reporting by Michel Rose, Blandine Henault and Bate Felix; Writing by Geert De Clercq; Editing by Andrew Callus and Adrian Croft