On will be careful not to add more: EDF is going through a very bad financial and industrial period. Arrived three months ago in the monumental Parisian office on the avenue de Wagram decorated with engravings of the “electricity fairy” by Raoul Dufy, the new CEO was prepared for it. Luc Rémont still had to announce, on February 17, a historic loss of 17.9 billion euros in 2022 and a debt of 64.5 billion, which has doubled since 2018. It remains sustainable, if the financial agencies do not degrade not yet the note of the group; and, above all, if he manages to bring in new money, by selling more electricity and at a higher price.
Coming from Bank of America Merrill Lynch and Schneider Electric, following a long stint at Bercy, Mr. Rémont no doubt dreams of making EDF a normal company. A losing bet. The historic operator, renationalized this year, is more than ever under the eye of the government. Too strategic for the country and irreplaceable for supplying competitive electricity, too politically sensitive when prices need to be increased. The only advantage of this exorbitant status: the State would come to its aid in the event of bankruptcy, as Germany did, at the end of 2022, for Uniper, an importer of vital gas for its economy. For the rest, EDF is under pressure in Paris and in danger in Brussels.
In France, it is the cash cow that is milked if necessary, even if the State has recapitalized the company by 7 billion euros in five years. Since 1946, the group has been the armed wing of its energy policy. From 1970, he asked him to finance the nuclear power stations by borrowing. Once the fleet was amortized, it bowed to European decisions, throwing the former monopoly into the maelstrom of the market. In 2011, this policy was baptized with the sweet name of “regulated access to historical nuclear electricity” (Arenh), forcing EDF to share its “annuity” to remain the one and only operator of its reactors.
It has enabled alternative suppliers, including groups as prosperous as TotalEnergies or Engie, to buy part of EDF’s current at a good price. Most of its competitors have not taken the risk of investing in production tools, remaining mere suppliers bringing no real gains to consumers. You have to hear the last three bosses of EDF denounce in chorus the « poison » of Arenh, who a “destroys the financial balance of EDF”.
“Relief Provider”
In 2022, the government reinjected a dose by decreeing that the company would finance the “tariff shield” to protect households and businesses from soaring energy prices. A cost of 8 billion for EDF, forced to buy exorbitant prices on the market for electrons resold ten times cheaper to honor its contracts. And when alternative suppliers were unable to meet their commitments, the government designated it as a “relief supplier” to fish out a million “stranded” consumers.
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