EDF seeks concessions on electricity prices

18 May 2022

French utility EDF said in written answers to shareholders' questions that it had asked the authorities to retract earlier decisions forcing it to sell nuclear power at low prices to its rivals, Reuters reported on 12 May. It added that it has the right to seek legal redress over this matter. EDF CFO Xavier Girre said the focus of the new presidential and legislation period to 2027 in France was reform of the Accès Régulé à l'Electricité Nucléaire Historique (ARENH) mechanism, under which EDF has to sell 100 TWh/year of nuclear to domestic suppliers at €42/MWh expiring in 2025 and a financing mechanism for the six new EPR2 reactors proposed by President Emmanuel Macron.

Nuclear production in France declined by 7.5 TWh year on year in the first quarter of 2022, due to an unprecedented high number of outages with over half of its 56 reactors offline for various reasons. Three reactors were confirmed for stress corrosion (Civaux 1, Chooz 1 and Penly 1), with another nine units showing indications of stress corrosion awaiting further analysis of lab test results, according to EDF management. The entire nuclear fleet is undergoing tests for signs of stress corrosion first detected late 2021 at Civaux, with the programme to be completed by the end of 2023, the company's management said at an analysts' call presenting Q1 results.

An assessment by French nuclear regulator ASN is expected by the end of the month following further lab analysis, EDF said. Girre said it was too early to quantify the impact of the issue on capital expenditure and reactor availability, but a high level of requirement was to be expected. S&P Global forecasts monthly output to average around 28 GW for May and June, with annual output currently on course to be just below the top end of the estimate's range, implying a drop of over 45 TWh, the biggest annual decline on record.

EDF said earlier in May that it had launched the second phase of its Grand Carenage programme for 2022-2028 at an estimated cost of €33 billion ($34.50bn), not including any costs related to solving corrosion problems at its reactors. The first phase (2014-2025) expected to cost €55 billion sought to extend the lifespan of its 900MWe reactors beyond 40 years. The second phase is now preparing to extend the lifespan of its second generation 1,300MWe units.

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