Burdened by “customs protection”, EDF is demanding 8 billion euros from its shareholder, the state

“EDF today filed a contentious appeal with the Council of State, estimating a compensation claim from the State of €8.34 billion to date.”, the electricity producer said in a press release on Tuesday. EDF is attacking the conditions imposed on it by the government under the “tariff shield”.

To curb the promised increase in regulated electricity tariffs to 4% in 2022, the government has committed EDF to increase the annual quota of electricity sold at a reduced price to its competitors by 20% to 120 TWh (vs. 100 TWh). increase TWh before). This sale is part of the mechanism called “Regulated Access to Historical Nuclear Energy” (Arenh), which is regularly denounced by EDF. The group is therefore forced to sell its production at a bargain price while electricity is peaking on the wholesale markets.

The state wants EDF to sell even more electricity to its competitors at bargain prices

“The state will continue to defend the Arenh rearing system before the State Council, which last July recalled again the public interest attached to this decision.”we reasoned with AFP on Tuesday evening in Bercy, which appreciates the steps of EDF “are no surprise”. The same source defended the meaning of the “customs shield”. “Without these measures, particularly the additional volume from Arenh, household bills would have increased by 35% including taxes”was argued.

The state’s decision was formalized in a decree on March 11, then in two decrees. EDF said on Tuesday that its approach is based on it “a thorough legal analysis” and “Given the damage suffered” under these texts.

“The Chairman and Chief Executive Officer of EDF had indicated during its AGM that he had previously submitted an administrative application to the State to seek the reversal of the March 2022 decree and orders relating to this allocation of additional nuclear amounts,” he recalled Group.

Jean-Bernard Lévy, whose state now wants to force the successor as part of the planned renationalization of EDF, actually announced a cultivated objection in May, which the state had not complied with. “Both the price and the terms of these awards put us at a significant disadvantage”argued the CEO.

Electricity prices: “After fighting against this, EDF found the state’s decision “a real shock”, says its CEO Jean-Bernard Lévy

EDF, which has to buy the electricity volumes at exorbitant prices in the markets to resell them to its competitors, estimates that the measure will reduce its gross operating surplus (Ebitda) by about 10 billion euros this year.

corrosion problems

A bill that comes on top of another major setback: the fall in its nuclear production linked to corrosion problems in certain reactors will cost it no less than another 24 billion euros, according to the latest estimates published at the end of July.

Corrosion on nuclear reactors: the impact on EDF results increases to up to 18 billion euros in 2022

The financially weakened and highly indebted group must nevertheless implement an ambitious program to build new EPR nuclear reactors in France in parallel with the expansion of renewable energies. This strategy, which is at the heart of French climate policy, has gained even more priority with the invasion of Ukraine, which has exposed the problem of dependence on fossil fuels.

In order to have a free hand, the government decided in July to renationalize 100% of the group, of which it now owns 84%. This operation must be carried out via a €9.7 billion public purchase offer (OPA) that the government plans to launch by early September. EDF announcements on Tuesday “do not change in any way the principle, methods and timetable” the OPA, Bercy assures.

(with AFP)