EDF: battle ahead over the price of electricity

While electricity prices have never been so volatile, the question of EDF's production costs is the subject of fierce discussions. The government has mandated the Energy Regulatory Commission (CRE) on the subject. The full cost stands at 60.70 euros per megawatt hour (MWh), for nuclear power for the period 2026-2030, well above the 42 euros of the Arenh (Regulated access to historic nuclear electricity), mechanism which ends in 2025.

The CRE estimate does not take into account the financing of the new nuclear program involving the construction of at least six reactors. For the rest, two logics clash. The government preaches in favor of a price directly linked to the cost of production, increased by a margin (for the return on capital, to finance future investments, etc.).

When EDF would be more in favor of a market price, depending on supply and demand. This price would be more volatile but could sometimes be higher and sometimes lower. “Industrialists could be tempted to use this reference cost to negotiate the prices of their long-term contracts with EDF as closely as possible,” explains Emmanuel Fages, senior associate at the Roland Berger consulting firm.

In its latest prospective report, the transmission network manager estimates the cost per megawatt hour of all types of production at 80 euros over the period 2025-2026. It could then evolve in a range between 70 and 75 euros, until the end of the decade. This decline is linked to the fact that the means of producing renewable electricity which are arriving on the market are more competitive than those which are currently in operation. The production costs of solar panels and wind turbines have fallen sharply.