2023-09-22 04:08:37
Relations are tense with Matignon who is unable to move forward on future regulation. The CEO of EDF attacked the Ministry of Energy during a board meeting.
Tension is growing between EDF and its shareholder, the State. For several months, the two parties have engaged in discussions around the future price regulation which should come into force at the beginning of 2026. We have known regarding the difficult negotiations for three months.
They have now fallen into a “very tense” atmosphere according to several sources close to the matter. “There aren’t even any discussions anymore, everything is blocked,” explains someone close to Matignon. Yesterday, an interministerial meeting was held around the Prime Minister on the regulation of the energy market.
A person close to EDF recognizes a “tension” with Elisabeth Borne’s cabinet and tries to qualify by describing “good relations” with the Ministry of the Economy and the State Participation Agency (APE), its 100% shareholder. On Wednesday, Bruno Le Maire also met the CEO of EDF, whose appointment he had proposed last year.
Because, that very morning, Luc Rémont brought together the board of directors of the public company in a “very tense” context, according to a person close to the group. A “pass of arms” took place between the CEO of EDF and Sophie Mourlon, the Director General of Energy and Climate (DGEC). Luc Rémont criticized the representative of the Ministry of Energy for having published a confidential report on the costs of nuclear power.
“He was furious, it was the first time we saw him like that,” explains a participant. “He deplored that the government had revealed important economic data to the competition.” According to our information, he even threatened to file legal action once morest the State. Contacted, EDF management refused to comment.
The government is playing one-upmanship
On the government side, we hardly appreciate Luc Rémont’s rebellion. “The discussions in the board of directors are confidential, it is surprising that EDF reveals them, replies a source close to the executive. Basically, EDF is a 100% public company. There are no negotiations , but a political direction to follow. The tension is not regarding to subside.
Tuesday evening, Minister Agnès Pannier-Runacher published a report from the Energy Regulatory Commission which estimates that the cost of nuclear power amounts to 60 euros per megawatt hour. This level now anchors in people’s minds the idea of a floor of 60 euros because Emmanuel Macron promised to set electricity prices as close as possible to the costs of nuclear power, to protect the consumer.
But EDF considers it far too low while market prices are today twice as high, at €130/MWh. Luc Rémont has been fighting for several months once morest overly strict regulation which would limit EDF’s financial room for maneuver. The CEO says privately that he is ready to set a ceiling of around 120 euros/MWh. A high level intended to redress the accounts of EDF which is crumbling under 60 billion euros of debt.
Prices still high in five years?
“This figure does not even take into account the climate cost and especially that of the EPRs whose construction will begin next year! annoys someone close to EDF. Cheap nuclear power is over.” Luc Rémont also hopes to rebuild the margins of the company which will have to invest 25 billion euros per year to finance the extension of nuclear power plants and the construction of six future EPR reactors.
Two gigantic projects worth 50 billion euros each over twenty years. “It is a mistake to want to finance the EPRs with electricity produced by existing power plants,” explains a source close to the public authorities. “The European Commission will never accept this plan.”
Basically, the CEO of EDF is campaigning for the establishment of long-term contracts with its major customers (companies and competitors), which would be a way of only applying market prices. The government is in favor of implementing only part of the nuclear electricity production. The subject was raised at the EDF board of directors on Wednesday by the director of the commerce division. Marc Benayoun gave price forecasts of 130 euros for 2024, 100 euros for 2027 and 85 euros for 2028. Far from the 60 euros calculated by the regulator…
Negotiations actually began within the EDF board of directors. The government will have to decide between its political desire to set low prices for consumers and its financial desire to restore EDF’s accounts. He must define this new regulation by the end of the year so that it can be applied at the end of 2025.
Matthieu Pechberty Journalist BFM Business
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