French Senate calls for nuclear price regulation change

The Senate inquiry committee has recommended replacing last November’s agreement with a “real regulation” in the form of a CfD for the existing fleet of nuclear power plants.

The French state and EDF abandoned the organization of the contract for difference system last year. (Photo: Wikimedia Commons)

Reuters Agency PARIS

France’s Senate on Thursday recommended the establishment of a new contract system between nuclear power plant operator EDF and the state that would allow the producer to set revenues at a previously agreed level. The Senate said the previous agreement did not protect either the company or consumers.

The system, known as a contract for difference, aims to set the electricity price at around 60-65 euros (64.79-70.19 USD) per megawatt-hour (MWh), while the average electricity price under the November 2023 agreement is set at 70 euros/MWh for 15 years from 2026.

Click here to connect with us on WhatsApp

The previous agreement did not guarantee EDF any minimum revenues and its implementation depended largely on contracts between the group and its professional and industrial subsidiaries, the implementation of which slowed as market prices fell.

The Senate inquiry committee therefore recommended replacing last November’s agreement with “real regulation” in the form of a CfD for the existing fleet of nuclear power plants, “to be expanded to cover all carbon-free energy production in the long term”.

The CfD system would involve setting regulated tariffs that would result in an electricity supply price close to the total cost of the French nuclear power plant fleet, estimated by the Energy Regulatory Commission at €60.70/MWh over the period 2026-2030.

According to the commission of inquiry’s calculations, this would generate “annual savings for the average household of more than €300 compared to current prices”.

The French state and EDF last year abandoned a CfD programme for the existing fleet because they believed the European Commission would require a split of assets that would be akin to the liquidation of an energy giant.

The publication of the Senate report coincided with the announcement by the three main blocs running for parliamentary elections of various programmes aimed at reducing electricity prices for end users.

(Only the headline and image of the report may have been edited by the Business Standard team; the rest of the content is automatically generated from a syndicated feed.)