France remains in talks with debt-laden Electricite de France SA over potentially capping power prices at a level that keeps the country’s manufacturers competitive.
(Bloomberg) — France remains in talks with debt-laden Electricite de France SA over potentially capping power prices at a level that keeps the country’s manufacturers competitive.
The government is looking for “the right balance” to help the state-owned utility meet its investment needs while keeping prices in check for companies, Energy Transition Minister Agnes Pannier-Runacher said Friday.
“Beyond a certain price, manufacturers aren’t competitive anymore, can’t export and have to shut down,” she said on BFM Business TV.
The talks are being complicated by negotiations among European Union states over an overhaul of the bloc’s power market design to rein in prices following the recent energy crisis. Pro-nuclear countries like France and an anti-nuclear coalition led by Germany are feuding over potential support for investments in lifetime extensions of existing atomic plants in future market rules.
Faced with a potential deadlock at EU level, French President Emmanuel Macron has said that the government will present legislation to help the country regain control of power prices by year-end. Current regulation on the price which EDF sells a large amount of nuclear power — which only partly shielded users during the recent surge in power prices — expires at the end of 2025.
France wants to ensure that power bills better reflect its electricity mix, which is dominated by nuclear and renewables. Prices had mainly been driven up by surging natural gas costs in the wake of Russia’s invasion of Ukraine.
France is pushing for rules that would allow it to ensure more stable revenue for EDF to help it extend the life of its reactors, regardless of changes in power prices on the wholesale market. Germany, which has phased out nuclear energy, has blocked such efforts out of concern that EDF would be able to sell power at uneconomical costs.
Macron said Friday that he’s confident the EU will agree on a reform of the electricity market by year-end. He’s traveling to Hamburg on Monday to discuss the topic with Chancellor Olaf Scholz after months of open disputes between Paris and Berlin.
“I have good hope that we’ll find an agreement,” Macron said on the sideline of a summit in Granada, Spain. “We shouldn’t waste time over details or divisions because our fight is geopolitical. It’s very good to produce electrons whether it’s with renewable or nuclear power, because in both cases they are made on European soil and carbon-free.”
He also said that France would take national measures to “control production facilities” in addition to the EU reform, without providing details.
The government is considering imposing a tax on a large part of EDF’s nuclear power sales from 2026 to redistribute proceeds to households and businesses, an aide of the French energy transition minister told Bloomberg this week. Les Echos first reported about the plan last month.
The charge wouldn’t apply to EDF’s entire nuclear output, which would give the utility an incentive to produce more, according to the aide. The company would be partly protected from temporary power price dips resulting from lower gas and carbon costs thanks to sales of long-term contracts, the aide said.
“It’s absolutely possible” to share EDF’s windfall revenue with French consumers without subsidizing the utility, Pannier-Runacher told BFM Business.
Power prices should be “high enough to ensure the emergence of long-term market that’s profitable for all,” EDF Chief Executive Officer Luc Remont said in an interview published Thursday in Le Monde newspaper.
He reiterated that the utility will have to boost annual investment in old and new nuclear plants, renewables and upgrading the power-grid to €25 billion ($26.4 billion) within a few years, up from €16.4 billion in 2022.
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