EC authorises compensation to EDF for early closure of Fessenheim NPP

25 March 2021

The European Commission announced on 23 March that it had authorised, under EU state aid rules, the compensation granted by France to EDF following the early closure of the Fessenheim plant. In 2015, France decided to cap nuclear energy production capacity in order to diversify its energy sources. EDF was forced to close the Fessenheim plant, and the damage linked to the cap was covered by a compensation protocol between the state and the operator. The protocol provides for several mechanisms for adjusting the amount of compensation: the fixed part, amounting to €370.2 million ($437m), was paid in full in 2020; the amount of the variable part, determined by parameters set in the protocol, will be paid later. The EC said that after analysing the protocol, the Commission “concluded that a selective advantage for the benefit of the operator (within the meaning of …the Treaty on the Functioning of the European Union -TFEU) could not be excluded”. Without commenting on the existence of aid, the Commission “confirmed the proportionality of the measure, provided that the latter was intended to cover the anticipation of duly established and justified costs”.

The EC noted that the measure “makes it possible to diversify the French energy mix by stimulating the production of electricity from sources other than nuclear power and to optimise the dismantling operations of the Fessenheim plant”. It said this “is necessary and appropriate, since it allows France to implement a policy of diversifying sources of electricity production, in accordance with the TFEU”. The Commission concluded that the positive effects of the measure outweigh any possible distortions of competition and trade and cleared the measure under EU state aid rules.

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