UPDATE 2-EDF exits U.S. nuclear, ups outlook
* EDF agrees on future exit from US nuclear venture
* Gets put option from Exelon for exit from 2016
* French nuclear, Italy gas contract deals boost outlook
* Shares jump 6.5 pct, strongest gainer on CAC40
PARIS, July 30 (Reuters) - French utility EDF, the world's biggest operator of nuclear plants, is pulling out of nuclear energy in the United States, bowing to the realities of a market that has been transformed by cheap shale gas.
Several nuclear reactors in the U.S. have been closed or are being shuttered as utilities baulk at the big investments needed to extend their lifetimes now that nuclear power has been so decisively undercut by electricity generated from shale gas.
"The spectacular fall of the price of gas in the U.S., which was unimaginable a few years ago, has made this form of energy ultra competitive vis a vis all other forms of energy," EDF Chief Executive Henri Proglio said at a news conference.
"It has completely reshaped the landscape of electric power generation in the U.S. in favour of gas."
EDF agreed with its partner Exelon on a future exit from their joint venture CENG, which operates five nuclear plants in the United States with a total capacity of 3.9 gigawatts.
The French utility said it had agreed a put option that allows EDF to sell CENG to Exelon at the fair value of its stake between January 2016 and June 2022. EDF will also receive an exceptional dividend from CENG of $400 million, it said.
"The circumstances for the development of nuclear in the U.S. are not favorable at the moment," Proglio said. "We are a major player in nuclear, but we are not obsessed by nuclear. Our development in the U.S. will focus on renewable energy; that will be our vector of growth in the U.S."
He added that the U.S. nuclear pullout would have no impact on talks with the UK government on a deal to build nuclear plans in Britain, which wants to replace ageing power stations with new-generation nuclear plants that will keep carbon emissions low.
The government and EDF are locked in tough negotiations about the minimum price for electricity produced from the firm's proposed Hinkley Point nuclear plant, Britain's first new nuclear plant in several decades.
Proglio said he expected those talks to wrap up by year-end.
EDF also said that because of the strong performance of its French nuclear fleet and a renegotiation of gas contract prices in Italy, it was able to raise its outlook for core profit growth in 2013 to at least 3 percent from a range of zero to 3 percent. This forecast excludes the impact from its Italian Edison unit, EDF said.
The company said on Tuesday that first-half core earnings before interest, tax, depreciation and amortisation (EBITDA) rose 6.9 percent to 9.7 billion euros, while net income was up 3.5 percent at 2.9 billion.
Shares in EDF surged 6.5 percent, hitting a near two-year high in brisk volumes.
"Results were slightly better than expected but the focus is mainly on the fact that they are raising their outlook despite a tough economic and regulatory environment," a Paris-based trader said.
After sinking nearly 70 percent between early 2010 and late 2012, EDF shares have strongly recovered this year and are up 54 percent since the end of December, making them the top performers on France's blue-chip CAC 40 index.
The shares have been helped by French government plans for the biggest increase in power prices in at least a decade to cover rising costs at the state-owned utility.