Vincent de Rivaz on leaving EDF
The boss of EDF Energy is about to step down after 16 years at the helm but the best is still to come, he tells Jillian Ambrose
This quiet edge of windswept coastline on the west of Scotland should be empty. Here, the Hunterston B nuclear power plant has stood for over 40 years, silently generating enough electricity to power 1.7m homes. It was due to shut down last year. Instead, it will run for almost a decade longer than first thought.
Almost 1,000 people are on the EDF Energy site less than a week after an uninterrupted 495-day run, the longest of the plant’s 41-year life. One man, Vincent de Rivaz, is here to say goodbye. He too knows a thing or two about confounding expectations.
“Walking around this plant, I was very moved,” De Rivaz says later.
“I was above the reactor and could see three or four colleagues working; as always very focused, very calm and very organised. Everything was tidy, spotless, magnificent. It was beautiful,” he says, trailing off.
After 16 years as EDF chief executive, De Rivaz is due to step down from the company in a matter of weeks. He will leave the helm to Simone Rossi, after a tenure in which he built one of Britain’s largest energy companies amid one of the most tumultuous and politically inflamed periods for the energy industry.
But inevitably, De Rivaz will be remembered for one of the biggest, most expensive and controversial power projects in British history: Hinkley Point C. Today, there is little to suggest the grit and dogged determination for which he became known in the industry.
De Rivaz is visiting each of EDF Energy’s 20 sites and offices to deliver a three-fold parting message to his employees: one of thanks, a call to have pride in what has been achieved, and to have confidence in the future.
“These are not bad messages for myself either,” he says.
“In a sense it is very important to leave feeling that you are not irreplaceable.
“If that were the case it would mean you haven’t empowered your team or given them a vision. It’s good to say ‘get on with the job’. And anyway, 16 years? It’s kind of a record,” he smiles. It was in 2002 that De Rivaz moved to Britain from his native France as chief executive of the company that was to become EDF Energy.
It was an energy industry dominated by regional monopoly supply boards and a system run mostly on coal-fired power.
The roll-out of renewable energy had yet to begin in earnest. The so-called Big Six were yet to be formed, much less challenged by the current crop of upstart minnows.
Within his first six months in Britain the company tripled in size. He merged the Edf-owned electricity boards of London, the South East and South West of the country. At a stroke EDF Energy became a 12,000-strong company with the capacity to generate 6pc of the UK’S electricity and supply 7.9m customer homes and businesses.
The group’s burgeoning nuclear ambitions were ignited just a few years later when Tony Blair, prime minister at the time, put nuclear power generation back on the agenda “with a vengeance”, vowing that Britain would build new plants to power its low-carbon ambitions.
EDF Energy acquired British Energy’s fleet of nuclear reactors for £12.5bn in 2008 to become the biggest electricity generator in the UK. As part of the deal, EDF Energy set out plans to build four new nuclear reactors in Britain at two of the existing British Energy sites, Hinkley and Sizewell.
In many ways, De Rivaz has remained the central protagonist of the Hinkley saga, while four successive prime ministers, nine secretaries of state and four EDF chairmen have played supporting roles. A final act cameo by Chinese state-backed nuclear developers helped bring the drama to a close.
“The fact that I have stayed so long has been a message of stability and credibility, to the UK Government but also in France. It was very important for all stakeholders,” he says.
The Somerset-based project was abandoned by project partner Centrica in 2013, months before the deal was subjected to EU state-aid scrutiny, which lasted almost a year. In the end, a £2bn loan guarantee from the Treasury and an estimated £6bn investment from China General Nuclear in 2015 helped win the careful approval of Theresa May last year.
“It’s never easy. You have bumpy days, bumpy weeks.” He pauses. “Bumpy years. How do you stay on track when your boat is rocked by events? It’s only possible when you have a clear vision of where you want to go.”
De Rivaz has steered the company, slowly, towards this vision. EDF Energy’s existing nuclear fleet has increased its output by 50pc from its days under British Energy control. Last year, it reported a record level of generation despite the age of the plants. Around 400 miles south of Hunterston, workers swarm the Hinkley Point C site to bring this project to fruition too.
The £20.3bn project will be one of the biggest investments in power generation in decades, and provide over 3GW of low-carbon power to the grid. But to say that Hinkley has its critics is an uncomfortable understatement. The inevitable ire of environmentalists was easily matched by those who believed that the costs of the project would saddle bill payers with higher fees. That EDF’S other new nuclear projects in Europe have run over time and budget has only served to deepen concerns.
Under an agreement between the Government and EDF Energy, ironed out in 2013, Hinkley is guaranteed to earn £92.50 for every megawatt-hour (MWH) of energy produced through a combination of wholesale market prices and a levy on consumer energy bills. At the time, the Government said this would require top-up payments totalling £6bn via energy bills but this spiralled to £30bn and, according to the latest figures, could top £50bn over the life of the plant.
Is Hinkley Point C a good deal? It is a question that has sparked political debates, parliamentary enquiries, audit reports and headlines. It is also a question that has provoked indignation and red-faced irritability from De Rivaz in the past. Today, he is unruffled. “People say the deal is too generous. Others say the project is too risky,” he smiles wryly.
“In the UK people tell me we have secured too good a deal. In France, they ask if I’m sure it’s a good deal for EDF because of the risks. To both of them, I say yes, I’m sure.”
De Rivaz admits that there were certainly difficult moments, but avoids a question on whether there have been doubts that the Hinkley project would move ahead.
“If you are blind to the critics you are in danger,” he says, by way of response. “I have always been conscious of the challenges and critics and difficulties. And I have always taken them into account, because if you are not addressing them it could jeopardise the project. In a sense it was a journey of difficult steps.”
Hinkley may prove to be his legacy, but it is one De Rivaz says he will be proud to have.
“It is a project which is ensuring the continuity of this business, and the continued success of the business,” he says. “It is happening. We will produce 7pc of the electricity that this country needs for the next 60 years. It will prove to be a decisive project for new nuclear in the UK and Europe. I have no doubt that this legacy is a positive one. It is hugely positive.”
But perhaps surprisingly, De Rivaz does not consider Hinkley to be his toughest challenge. His toughest years, he says, were those in which consumer trust in the industry was at its lowest level. A bungled billing system overhaul triggered a wave of customer complaints against the company and drove staff morale to rock bottom levels too. The Big Six backlash was brutal. Alongside other energy bosses De Rivaz weathered a volley of government threats to cap energy supply tariffs, an in-depth probe from the regulator and competition authority, and an assault from new rival suppliers into an increasingly crowded and competitive retail market.
“But we’ve turned that around. Despite all these new entrants EDF Energy has maintained its market share. What we have done, what I have done, in addressing the issue of trust on the customer side has earned us the right to innovate in an increasingly digital world,” he says.
Again, it is about ensuring a sustainable future for the company he has built. And De Rivaz is clear that tapping the boom in internet-enabled home systems, solar panels and batteries will play a key part of the future for the industry.
“Those that are going to innovate will be the winners. If you don’t innovate, you die,” he says.
Transforming the firm’s retail business is a key pillar of the EDF Energy 2020 vision, which he announced earlier this year, well before announcing his departure. If there is any dissatisfaction at not being able to see the vision through, there’s no trace of it in the bright Scottish sunshine.
“In life you must always know two things: the one is that everything has an end, and the other is every end has a beginning. So, the best is to come.”
He shrugs and smiles. “That’s all I can say, huh?”
‘In a sense it is very important to leave a company feeling that you are not irreplaceable’
‘If you are blind to the critics you are in danger. I have always been conscious of challenges and difficulties’
Vincent de Rivaz, the outgoing boss of EDF Energy, has overseen key developments such as the ongoing Hinkley Point C nuclear project