EDF wholesale electricity price set

20 April 2011

Up to one quarter of the nuclear electricity generated by EDF will be made purchasable by alternative suppliers in the French electricity market from 1 July.  


The price of this wholesale electricity has been initially set by the French government at €40 ($58) per megawatt-hour, rising to €42 ($60) per megawatt-hour from 1 January to 31 July next year.


Currently EDF, generates and supplies almost all of the electricity in France, about 80% of which comes from its fleet of 58 nuclear reactors. This it does economically, since consumer electricity prices in France are amongst the lowest in Europe, and France is one of the largest electricity exporting countries in the world.


Nonetheless, EDF's near monopoly position over electricity generation and retail in France is at odds with European goals for competition. These aim to give consumers a choice between electricity retailers, and also break down barriers to trade between countries – including in the electricity sector. The French government has come under pressure from the commission to liberalise the electricity market, and EDF has been the subject of an EU anti-trust investigation initiated in December 2008.


The principles of this major market reform, dubbed Nome - Nouvelle Organisation du Marché de l’Électricité - introduced by the government in December last year will give French electricity consumers at least some choice of provider, though whether it will appease the European competition watchdog remains to be seen.


The reform will also replace the special transitional tariff, TaRTAM, set in place for certain French industries that has remained unchanged since 2008. This tariff is consistent with the €40 per megawatt-hour price of electricity initially set under Nome. The rise to €42 per megawatt-hour will represent a 3.5% price increase to those manufacturers subscribing to TaRTAM, an amount less than inflation over the three year period.


The price structure was set by the Ministry of Industry, Energy and Digital Economy and is consistent with a recommendation submitted by an independent committee, chaired by Paul Champsaur. The ministry determines that the amount is sufficient to allow EDF to make significant investments into its nuclear fleet.


It is below the level of €45 per megawatt-hour which EDF chief Henri Proglio had claimed was the production costs for French nuclear power, but above the level of €35 per megawatt-hour that competitors such as GDF-Suez had claimed was the lower limit that they could viably hope to purchase and sell on nuclear electricity.


Researched and written
by World Nuclear News