EDF sees black on the stock market after the measures on electricity prices

The measures announced Thursday by the government to limit the rise in electricity prices have caused the share price of the electrician to plunge. The public group should be involved to the tune of 8.4 billion euros.

It’s a black Friday for EDF, and the light will be hard to turn on. This Friday morning, the price on the Paris Stock Exchange of the electricity producer fell by 21.82%, to 8.09 euros, before stabilizing around 8.80 euros during the day. The public group has borne the brunt of government policy, which has been wondering for several weeks how to mitigate the rise in energy prices. In September, the executive had set itself the objective of containing the rise in prices for consumers to less than 4%.

In order to keep this promise, a standoff has been entered into with EDF. Won by the government: the Minister of the Economy, Bruno Le Maire, managed on Thursday to convince the producer to increase by 20% the volume of nuclear electricity sold at a reduced price to its competitors this year, thus increasing it from 100 to 120 terawatt hours (TWh). The group will therefore be forced to sell at a reduced price up to 40% of its electricity production in 2022, instead of selling at high market prices.

Financially, the damage is likely to be heavy for EDF, whose debt level has already reached 42 billion euros. Bercy estimated that the impact of this measure would vary between 7.7 and 8.4 billion euros. And it could have been worse. By way of – meager – compensation, the government offered the public company to temporarily increase the selling price of its electricity from 42 to 46.20 euros per MWh.

A “considerable effort”

In an interview at Parisian, Bruno Le Maire greets “considerable effort” carried out by the electrician, without which the increase in the price of energy “would have been more than 35% on February 1, 2022”. The government, meanwhile, has agreed to reduce the electricity tax as much as possible, reducing it from 22.50 euros per megawatt hour to 50 cents. A measure that will dent its tax revenue by 8 billion euros.

At the same time, EDF is facing setbacks in its nuclear power plants. While 10 of its 56 reactors are shut down for maintenance or safety problems, its nuclear production targets have been revised downwards for 2022. They thus drop from 330-360 to 300-330 TWh. Other plant closures, in the middle of winter, when electricity consumption is high, could even disrupt the country’s electricity supply.

Bruno Le Maire does not however feel sorry for the group, of which the State is the majority shareholder with 83.88%. He even wants to be optimistic. “We are launching a new program which gives considerable development prospects for EDF”, continues the Minister of the Economy in the Parisian, alluding to the forthcoming construction of at least six new EPR reactors in France. In short, a favor for the French electricity champion which would revitalize him when he is at his lowest. Finally, it still has to manage to deliver the first of these new generation reactors, that of Flamanville. EDF has once again postponed its commissioning by announcing this Wednesday that it would not arrive before the end of 2023…

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