The pressure is increasing on EDF. The government will ask the company to sell more electricity at low prices to its competitors, in order to keep its promise to limit the increase in the French electricity bill to 4% in 2022, despite the surge in prices, announced Thursday the Minister of the Economy Bruno Le Maire.
The government, which had already reduced the main tax on electricity to the maximum, an insufficient measure to contain this outbreak, will “implement a complementary measure by increasing by 20 terawatt hours (TWh) the volume of nuclear electricity sold at reduced price by EDF to its competitors, to increase it on an exceptional basis from 100 to 120 TWh”, announced the Minister in an interview published on the Parisian website.
Between 7 and 8 billion costs for EDF
This measure will cost between 7.7 billion and 8.4 billion euros for EDF, estimated Bruno Le Maire. At the end of September, Prime Minister Jean Castex announced “a tariff shield” on energy with in particular a limitation to 4% of the increase in regulated electricity prices in 2022.
Prices, boosted by the global economic recovery, have continued to rise since the government’s announcement, but the government has therefore not gone back on its word. He had been planning since December to raise this Arenh ceiling (“regulated access to historical nuclear electricity”) so that suppliers have more cheap electricity at a fixed price, even if it means slightly increasing the price paid to EDF.
A tax loss for the state
While it is currently sold at 42 euros per MWh (instead of some 250 euros on the current market) by EDF to its competitors, the government has “proposed to raise this sale price from 42 to 46.2 euros / MWh , which makes it possible to reduce the bill for EDF ”, indicated Bruno Le Maire.
The government had already reduced the main tax on electricity as much as possible, reducing it from 22.50 euros per megawatt hour (euro/MWh) to 50 centimes, “a decision which represents a tax loss for the State of 8 billion euros,” said Bruno Le Maire. This measure “made it possible to cover approximately 15 points of increase in the price of electricity”, according to the minister, very “far from the 35% to come in two weeks”.