Fixed price for French nuclear as market law passed
26 November 2010
A new law passed by French legislators will force nuclear power producer Electricité de France (EdF) to sell nearly a quarter of its output to other French power suppliers at a government-fixed price in order to promote competition.
The legislative process to adopt the New Organisation of the Energy Market law, known by the acronym NOME, was completed on 24 November when it was passed by the French National Assembly. The law requires EdF to sell 100 TWh per year to other electricity suppliers at an "economically representative price" to ensure that competition is not stifled. That price will be agreed annually by ministers based on the opinion of the Commission for Energy Regulation (CRE). It will take into account the prevailing economic conditions for electricity generation at the nuclear plants.
The law is intended to ensure that all of France's electricity suppliers can offer competitive prices to customers. France's electricity market has been open to competition since 1996, but from the point of view of EdF's competitors the company's position - it runs the 59 nuclear reactors which generate around 75% of the country's electricity - has seemed uncompetitive. EdF generates over 430 TWh per year, and exports power to Belgium, Germany, Italy, Spain, Switzerland and the UK as well as supplying the French market. The 100 TWh a year which the new act will force EdF to sell to other French suppliers will give them access to larger volumes of baseload power.
Finance minister Christine Lagarde and energy minister Eric Besson welcomed the new law, saying it would provide a "transparent and efficient" modern legal framework for the country's energy sector, encouraging innovation and competition and give all French suppliers, and hence all consumers, equal access to supply from France's nuclear power sector. The law will also mean that France will not fall foul of European litigation over its electricity market, according to the ministers.
The new law will be in place until 2025, with the selling price likely to be announced at the start of 2011. The price will be eagerly awaited both by EdF and its competitors. Cited in Bloomberg and Reuters reports, EdF CEO Henri Proglio has said that the price for nuclear output should be a minimum of €42 ($56) per MWh, while the CRE has said that a price of around €37 ($49) per MWh is needed to ensure effective competition.
According to Lagarde and Besson, the law will ensure French consumers pay the "true" cost of electricity production in France rather than higher costs dictated by European references.
Researched and written
by World Nuclear News