This is one of the stated objectives of the State on the verge of reaching an agreement with EDF to set up a new mechanism.
The negotiation between the State and EDF on electricity prices “is about to be concluded in the coming hours”, announced the Minister of the Economy Bruno Le Maire on Monday.
The French State and EDF must come to an agreement at the start of the week on a reference price for nuclear electricity as part of a project to tax company income which should make it possible to limit consumer bills.
Objective: also give EDF the means to invest
The objective is to put an end to the controversial Arenh system (regulated access to historic nuclear electricity) which obliges EDF to cede part of its nuclear production to its competitors at €42/MWh.
This new regulatory system must, according to the government, protect the French against excessive price increases and allow companies to benefit from the competitive costs of nuclear power, while giving EDF the means to invest.
Tiered taxation
It would result, in concrete terms, in a tiered taxation of the group’s nuclear revenues, when sales prices on the markets exceed its costs. The amounts collected would then be redistributed to consumers.
Clearly, the government wants the new reference price for electricity to be close to the nuclear production costs of EDF, over which it has regained control with a recent 100% renationalization of the group.
The Energy Regulatory Commission recently assessed this full cost of production of the French nuclear fleet at €60.7/MWh for the period 2026-2030.
“Have an effective system that captures the surplus and protects consumers”
The CEO of the EDF group would have agreed to commit to an average nuclear price close to €70/MWh. While wholesale electricity prices in France are currently well above €100 per megawatt-hour (MWh), or close to this level.
They even have reached peaks of more than €1,000 last year, against a backdrop of war in Ukraine and production difficulties at EDF nuclear power plants.
“We are regaining sovereignty over our prices”
“When we have very high prices like in recent months, it allows us to have an effective system which captures the surplus and protects consumers,” explains a source close to the executive.
“We are regaining sovereignty over our prices because we are providing long-term visibility on electricity prices, to prevent you, consumers, individuals or businesses, from being exposed to a new electricity crisis” , argued Bruno Le Maire on Monday.