EDF demands $8.5bn to compensate for capped electricity prices

Electricite de France (EDF) has asked its main shareholder, the French state, for €8.34 billion ($8.5bn) in compensation after the government forced it to sell power at cut-rate prices to protect consumers from surging inflation. EDF said in a recent statement that “Following an in-depth legal analysis, and in light of the losses incurred,” it had requested the Conseil d’Etat, France’s highest administrative court, to overturn orders requiring it to sell electricity at a discount.

In order to limit, as promised, the increase in regulated electricity prices to 4% in 2022 the government has forced EDF to increase by 20% the annual quota of electricity sold at a reduced price to its competitors, to 120 TWh (compared with 100TWh previously). This is done within the framework of the “regulated access to historical nuclear electricity” (Arenh) mechanism which obliges EDF to sell its production at a reduced price when electricity is fetching high prices on the wholesale markets.

France is currently in the process of acquiring the 16% of EDF that it does not own, aiming to nationalise the company in order to keep consumer electricity bills in check while making the huge investments needed to reduce dependence on imported fossil fuels. The government said on 10 August that it will defend its decision to force EDF to sell more of its nuclear power output to rivals at a discount because the measure was taken in the wider interest of consumers amid surging energy prices

EDF’s legal action and request for compensation “do not in any way modify” the government’s plan to fully renationalise the utility, a Finance Ministry official said in an emailed statement.

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