The energy bill will be one of the priorities of the new parliamentary majority. The price regulation decided last year is likely to be revised.
During the legislative election campaign, the National Rally and the presidential majority clashed over electricity prices. The former promised a 30% to 40% reduction and the Minister of Economy of the presidential majority committed to a 10% to 15% reduction next February.
But the new regulation, decided last November, and which will come into force after 2025 does not guarantee low prices. At the time, the government decided on a reference price of 70 euros per megawatt hour, far from the 60 euros per MWh proposed by the Energy Regulatory Commission (CRE).
The Ministry of Economy and EDF had given themselves six months to “test” this scheme. The review clause, planned for the end of June, rekindles the debate in the middle of the legislative elections.
“The government was realizing that this regulation is not working,” assure several close sources.
Matignon had been convinced for many months that it was not tenable. Elisabeth Borne was already opposed to it. “Gabriel Attal realized that the political cost of energy prices is too high to change nothing, adds a good expert on the issue. Even Bercy is wondering about this system that he nevertheless imposed.”
Lower prices for businesses
Because the chosen option is slow to prove itself. It consists of letting EDF sign long-term contracts with its competitors and companies. EDF has only signed four large contracts with the ArcelorMittal plant in Dunkirk, or that of GravitHy in Fos-sur-mer for its iron production. According to our information, they have benefited from prices close to 60 euros per MWh thanks to ten-year contracts.
But the most energy-intensive manufacturers are demanding lower prices. The public company also reached an agreement with 1,600 SMEs, at its reference price of around 70 euros per MWh. Ten days ago, Bruno Le Maire recognized that these first results were “not sufficient” and that it was necessary to “reopen negotiations with companies”. EDF is struggling to hide its embarrassment and justifies that “many alternative operators and companies are waiting, hoping that prices will continue to fall”, estimates a relative.
Fixed price contracts
Lowering prices will become essential. For its part, the National Rally is promising “a French price” for electricity. Last year, France obtained authorisation from the European Commission to set up “contracts for difference”. A regulation system that EDF has already tested on its Hinkley Point EPRs in Great Britain. It allows electricity to be sold at a stable price determined in advance. “It is a way of setting a price based on production costs” explains a specialist. It could thus drop to the level of 60 euros per MWh estimated by the CRE. “By removing the exceptional and enormous cost of Flamanville, we can even get closer to 55 euros”, he adds.
EDF has never favoured this system, which amounts to leaving the setting of prices in the hands of the State. Its CEO obtained these long-term contracts in order to manage his own financial room for manoeuvre. At EDF, they emphasise “not having the means to do everything, invest in new nuclear reactors while lowering prices”.
When he set his reference price at 70 euros per MWh, Luc Rémont emphasized that this level included a few euros of margins necessary for investments in the next EPRs.
To relaunch this debate, the government will have to rely on the Energy Regulatory Commission which controls EDF’s costs and estimates the economic framework for nuclear power in France. The National Rally deputy, Jean-Philippe Tanguy, however, wants to abolish the Energy Regulatory Commission. It would become “useless” he declared to the media Montel in mid-June.
Matthieu Pechberty BFM Business journalist
