France, EDF strike compromise deal on electricity prices

The French government confirmed on Tuesday it had reached a deal on future nuclear power prices with utility EDF (EPA:EDF), striking a compromise which the finance minister said would allow EDF to make profits while shielding consumers from spikes in energy prices.

The two sides agreed on 70 euros per megawatt hour (MWH) as a reference level for power prices, the government said, confirming a Reuters report on Monday.

The deal puts an end to months of fraught negotiations between EDF, which is eager to maximise revenues to fund investments, and the government, which wants to keep electricity bills for French households and businesses as low as possible.

“This deal was indispensable to guarantee the competitiveness of our industry, the visibility and stability of prices for our households, and the development of EDF,” Finance Minister Bruno Le Maire told reporters.

He said the fact that EDF was fully nationalised this year did not mean it could function at a loss.

“We are not in the Soviet Union,” Le Maire said.

The deal sets out mechanisms that would protect consumers if power market prices rise above 110 euros/MWH, while it also includes clauses that would provide a price guarantee for EDF.

France, EDF strike compromise deal on electricity prices