EDF's incoming chief pledges to focus on domestic nuclear sector

By Forrest Crellin

PARIS (Reuters) - Bernard Fontana won parliamentary approval to be the next CEO of French state-owned utility EDF in a vote on Wednesday, after telling lawmakers he would prioritise domestic nuclear projects and supplying cheap power to industry.

Fontana was nominated for the role of chief executive in March after President Emmanuel Macron's government lost patience with former chief Luc Remont due to differences over how to provide power and build new capital-intensive reactors.

A combined vote of both houses of parliament approved Fontana's appointment as CEO by 55 to 43, with an overwhelming National Assembly vote in favour outweighing a rejection by the senate. The final step to confirm his new role will be a vote of EDF's board.

A priority for Fontana, currently boss of nuclear engineering company Framatome, an EDF subsidiary, will be striking new deals with EDF's major industrial clients after months of inconclusive talks over long-term power supplies.

EDF's failure to agree contracts with businesses under Remont had frustrated the government, which is trying to support an ailing industrial sector struggling with high energy prices and intense competition from China and elsewhere.

Fontana had earlier told Senators said that he aimed to agree long-term contracts with industry clients of 40 terawatt hours (TWh) per year, and that EDF should target total nuclear production of 400 TWh per year by 2030, from around 360 TWh now.

"We need to find room for manoeuvre, and I think it exists," Fontana said of the contracts, adding there was a need to move quickly to give companies a "window of opportunity" for further negotiation.

The price of electricity for delivery in 2026 has fallen below energy regulator CRE's estimated operational cost for EDF's nuclear reactors - an additional hurdle in negotiations.

France relies on nuclear energy for about 70% of its power, and last year produced a record surplus for export.

With prior roles at steelmaker Arcelor Mittal and cement company Holcim, Fontana, 64, has experience of energy-intensive operations that have been hit by soaring European energy prices.

He will also oversee construction of six new nuclear reactors backed by Macron to replace the country's ageing fleet.

Fontana said that would require a focus on domestic projects. EDF is currently developing two nuclear reactors in Britain, Hinkley Point C and Sizewell C, and has previously stated ambitions to develop a Europe-wide supply chain for projects elsewhere.

"It will be necessary to prioritise investments in France ... and pay attention to the profitability of international commitments," he told lawmakers.

(Reporting by Forrest Crellin; Editing by Richard Lough, Dominique Patton and Catherine Evans)