EDF setbacks and state shareholder

EDF setbacks and state shareholder

A rope access technician explores reactor walls at the Civaux nuclear power plant, in Vienne, on September 8, 2021.

Early days of the year, and the first setbacks already for the EDF group. Between state orders, the liberalization of the energy market in Europe, and technical failures, the list of pitfalls is long. Since the beginning of the school year in January, successive Bad news shakes[e] the group “ In the midst of the European energy market crisis, EDF CEO Jean-Bernard Levy acknowledged himself in a letter to company leaders, which was revealed by Reuters shortly after, on Monday, January 17, and also seen by the scientist.

For the company, the main annoyance is due to the decisions of its majority shareholder (83.9% of shares), the French state. For a decade, European liberalization forced it to sell off a portion of its production in favor of competition, in the name of the forced opening of the market. But three months before the presidential election, the government announced on January 13 that EDF would have to sell more cheaply. For 2022, this amount of regulated access to historical nuclear electricity will have to be increased to 120 TWh, up from 100 in previous years.

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According to the state, this surplus electricity was sold Supposedly Protecting the purchasing power of the French people and maintaining the competitiveness of the electricity supply to companies. Thus, the government intends to keep its promise to limit to +4% in February of the future tariff increase for the majority of households, those subscribers to the EDF “blue tariff”.

From the company’s point of view, the measure will above all provide an additional gift to alternative electricity suppliers, including TotalEnergies and Engie. Small consolation for the French electrician, the surplus price should rise from 42 euros to 46.20 euros per megawatt-hour. Six times lower than current wholesale market prices. “Having struggled so much, we consider this decision as a real shock.” Mr. Levy wrote about the government’s action. “We recommended targeted alternatives in favor of customers who are more sensitive to price increases, in particular very small businesses and factories with more exposure.”

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Since this measure has a cost to the EDF, it should reduce its total operating income by 7.7-8.4 billion euros in 2022. Altogether, losses could reach between 10 and 13 billion euros considering the shortfall caused by the prolonged shutdown for several reactors, according to estimates by financial rating agency S&P Global Ratings. “According to our preliminary estimates, Claire Mauduit Le Clerc, Director of Analysis and Credit, says:, the combination of state measures and the shutdown of some reactors could lead to an unusual reduction in their volume. »

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