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nuclear rent at the heart of the debate

By separating electricity production and supply activities, the government can plead with Brussels that EDF is no longer a monopoly that controls all links in the chain.

By Nabil Wakim Posted today at 10h51

Time to Reading 2 min.

Subscribers article

This is a complex subject, but central in the debate around the reorganization of EDF: how to distribute the benefit of the nuclear rent? The 58 reactors of the French fleet, built in the 1970s and 1980s, produce a competitive electricity, which allows France to be one of the countries where electricity is the cheapest in Europe.

Article reserved for our subscribers Read also Government tracks to cut EDF

But EDF is in a special situation, since the group is both operator of all nuclear power plants and electricity supplier for about 80% of homes. A situation that the European Commission considers contrary to the rules of competition.

To avoid a dismantling of the group desired by Brussels, the Fillon government had invented, in 2011, a mechanism allowing EDF's competitors to gain access to nuclear generation on favorable terms. This device, called Arenh (regulated access to historical nuclear electricity), was based on a simple mechanism: a quarter of the nuclear production can be pre-purchased by alternative suppliers, if they wish. EDF had accepted the principle at the time, hoping that it would not have too much impact.

Today, the direction of the group has given as a priority objective to put down the Arenh. "This is a major topic because it is a deadly risk for the company"dramatizes a leader, who believes that the fact of having to reserve part of this production to competitors, blind and at a fixed price and cheap, lost EDF hundreds of millions of euros. A working group between the company and the government is working to completely reform this system, which must end in 2025.

Anger of competitors

This system today has two essential dimensions. First, through a complex calculation, it has a direct impact on electricity prices. It is because the mechanism found its limits at the end of 2018 that the Personal electricity bills are expected to increase 5.9% in June. A rise that was to come earlier, but was rejected by the government because of movement of "yellow vests".

Above all, the Arenh is a form of guarantee for Brussels that EDF does not abuse its dominant position. "This is actually the number one issue for EDF and the French State at the European Commission", assures a close of the public company. In other words: to "sell" in Brussels the reorganization of EDF, it must go through a renegotiation of this device.


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