Paris-born Bruno Lescoeur, engineer, 60, has been at the helm of Edison for three years. This may not sound like a long time, but definitely enough for him to experience first hand some crucial moments for the group, from the end of the alliance with the partners in Lombardy to the Italian and international energy market crisis. He has recently finalized an operation with F2i which makes Edison the third national operator in renewable energy.
You will have a minority share. What does this move mean exactly?
First of all, we are introducing a new business model, based on three companies. The first company, owning a total of 600 Megawatt, largely in wind power, will see F2i with a 70% share and Edison with 25%, while the remaining 5% will be owned by Edf Energies Nouvelles. Indeed we have a minority share, but thanks to a governance that entitles us to appoint the president, we will be able to manage and direct strategies. Moreover, we will consolidate results. The second is a management company, specifically created by Edison and Edf Energies Nouvelles, which ensures the technical availability of the facilities. Finally, we purchase all of the produced energy at a fixed price and we put it on the market. This is quite remarkable, as the activity of the three company is considered to be worth 1 million euros per megawatt.
Any other side effects?
Edison reduces its debt and secures new resources for the development of the third renewables hub in Italy, all of this with a strategic partner as strong as F2i. We hope we will attract more operators along the way, and that we will play a pivotal role in the consolidation of the Italian market.
However, Italy is cutting incentives for photovoltaic energy by changing the rules of the previous, and much richer, incentive systems. Is your perception of the market changing too? It looks like complaints and compensations for damage are looming.
Well, despite the uncertainties that were brought about by the old, distorted incentive system, the operation we have announced proves that we truly do believe in the development of renewable energy sources. It is certainly true that the old subsidies have resulted in more than a few problem for the Italian electricity market, because they led to overcapacity and the subsequent chaos in competition, as well as to much heavier bills, and now many operators are leaving Italy. In spite of all this, we believe that there is a future for this industry, as long as the operators are knowledgeable and have long-term perspectives, which we do have.
Is Edison switching to a new business model? And is Edison's role within the EDF Group changing?
Let's set this straight: we have an integrated business model, and we will continue to be the gas platform for the entire EDF Group. Meanwhile, we will also continue to be an Italian company with a strong presence in the electricity industry, and we contribute to a safe and secure national energy system through the diversification of the sources and of the gas supply routes. Don't forget that we have long-term relations with some of the top worldwide gas producers -Algeria, Libya, Russia, Qatar- and we are engaged in key infrastructure projects such as the ITGI and GALSI pipelines.
As you are active in Egypt and Israel, in the light of the events happening in the Middle East, do you envisage a downsizing or an exit from gas and oil production in the area?
Those choices are always long-term, and investments in that area tend to stretch over several decades. Of course we will have to keep an eye on the geopolitical developments, but as you were correctly pointing out, we are already active in Egypt and Israel, and we are also seizing opportunities in other key countries such as Turkey. This remains our strategy, and Italy is a very important part of this framework. We are convinced Italy should not miss the opportunity to value the resources of its soil. Italy may double its production by 2020, which would lead to a €5 billion saving in energy bills, spur new investments, and create 25,000 new jobs.
Do you see Italy having troubles this winter due to the Russia-Ukraine issue? Would any sanctions have repercussions on EDF working on South Stream, or on Edison, which has take-or-pay agreements with Gazprom?
As the European leaders have explicitly clarified, the current sanctions have no impact on the transportation and sales of gas. They have an effect on the oil system, especially on the high-technology industrial cooperation and the investments. However, it is certainly true that the political framework we are seeing these days is a crucial variable for the future of the European energy sector. The Russian Federation plays a key role in the European gas supply, and Italy is currently the only big manufacturing economy in Europe that depends on the Ukrainian route. Libya is also going through a rough patch at the moment. We will certainly have to keep a close eye on the situation, which is what the European Union is currently doing, under the Italian presidency, for example by means of the stress tests that are scheduled for this autumn."