PARIS (Reuters) -EDF announced on Tuesday its intention to conclude contracts of a minimum of ten years backed by nuclear assets with the largest French industrial electricity consumers, the public group wishing to share its risks and obtain visibility on its income in a context of massive investment needs.
The group also indicated that it was targeting contracts expiring in 2027 and 2028 for consumers in its “business market”, which includes professional customers (VSEs, SMEs, ETIs, large industrial and tertiary companies) and public (communities , ministries and large public companies).
The revision of its commercial policy is part of the project for new regulation of the French electricity market after an agreement with the State on a reference price for electricity of 70 euros per megawatt-hour (MWh) , accompanied by a system of taxation of EDF income from around 78 euros/MWh, which should ensure price stability for consumers.
“We are in the perspective of returning to robust production, but also of promoting these offers which provide our customers with stability and visibility,” declared Marc Benayoun, EDF executive director in charge of the Customer Center, Services & Territories, during a press conference.
“This is the only way we will be able to provide our customers with what they expect, and also ensure revenues for EDF consistent with its investment program,” he added.
The offers that the group will offer to electro-intensive workers, which it refers to as “industrial partnership contracts”, will cover periods of 10 to 15 years, or even beyond.
Similar to PPA (Power purchase agreement) type contracts, they imply that the customer reserves a portion of the production of the existing nuclear fleet, by paying an “upfront advance” at the start of the contract and then making payments depending on the maintenance and operating costs of this park.
EDF BELIEVES IT CAN AVOID TAXATION OF ITS INCOME
EDF estimates that its French electro-intensive customers, numbering around 150, represent 40 TWh of annual consumption. Of this total, it believes it will be able to conclude contracts covering around 20 TWh, or 5% of the French electricity market.
Concerning customers in its business market, EDF argues that the prices of electricity for deliveries between 2026 and 2028 constitute, for the part representing production, a division by approximately two of what they pay today. ‘today.
The group, which has also launched an experimental offer aimed in particular at its competitors, also emphasizes that the threshold of 78 euros/MWh triggering capture of its revenues by the State is expressed in 2022 euros.
“In 2026, the 78 will represent 88 or 90 euros. So, we think that quite quickly, taking into account wholesale prices which are trending downward, and also our commitments on the nuclear fleet, we could find ourselves in a situation where there will be no capture,” declared Marc Benayoun.
EDF also believes that the new regulatory framework will not necessarily lead to an increase in regulated electricity sales tariffs (TRV).
“The level of TRVs has increased significantly over the past three years, it would have increased even more without the tariff shield, but it is not at all obvious that it will increase significantly in the future, at least not under the policy and of the method of calculation that is proposed (…)”, said Marc Benayoun.
(Reporting by Benjamin Mallet, edited by Tangi Salaün)
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