Status: 01/18/2022 12:22 p.m
Because France is capping the price of electricity, the state-controlled electricity supplier EDF expects billions in losses. The share price collapsed. The EDF boss has now criticized the government in an unusually open way.
The breaking of the taboo was not long in coming. Actually, it is not appropriate for the head of a state-controlled company in France to criticize politics. But the order issued by the government last Thursday affects the substance of the French electricity supplier EDF.
The state has ordered EDF to produce 20 percent more nuclear power. The group should then sell this to the competition for a maximum of EUR 46.20 per megawatt hour. However, electricity currently costs almost three times as much on the open market. In addition, EDF should only be allowed to increase electricity prices by a maximum of four percent in 2022. Without such a cap, experts had expected an increase of up to 20 percent.
EDF boss Jean-Bernard Levy had already declared on Friday that the arrangement would reduce EDF’s operating profit by around eight billion euros. The French state holds 84 percent of EDF shares. These collapsed by 25 percent after the announcement. However, new problems at one of the group’s nuclear power plants had also contributed to this.
“A real shock”
A memo by Levy to managers of the group has now been made public, in which he reports that he has tried to persuade the ministers to take a different course. “After fighting hard against it, this decision comes as a real shock,” he wrote. “This news shocks the company.” Now he is looking for ways to defend the interests of the energy company.
The background to the order is the French government’s attempt to cap the rise in electricity prices for consumers. President Emmanuel Macron, who is currently fighting for re-election, faces public anger over soaring electricity bills.