Tensions rise between EDF and major industrial sectors over high electricity prices, which industries claim threaten their viability. Energy-intensive sectors, represented by Uniden, criticize EDF’s pricing strategy and stalled negotiations for long-term contracts. EDF’s proposed rate of 70 euros per MWh contrasts sharply with the 42 euros previously enjoyed. Despite some state pressure and ongoing negotiations, only one contract has been finalized, prompting industrialists to consider alternative markets with lower future rates.
Growing Tensions Between EDF and Industrial Giants
The ongoing conflict over electricity pricing intensified on Friday, as major industrial players voiced their concerns against EDF. The industrial sector, facing excessively high energy costs, claims these rates threaten their very existence. In contrast, EDF stands firm, stating it does not support relocations tied to electricity expenses.
Industries heavily reliant on electricity, such as aluminum and chemicals, are alarmed by EDF’s recent announcement. The electricity provider revealed plans to offer long-term contracts supported by its nuclear energy production, facilitated through a European auction system. This initiative aims to supply electricity not only to large companies across various sectors but also to electricity suppliers.
Concerns from Energy-Intensive Industries
The Uniden association, representing energy-intensive industries, expressed its discontent over what it describes as EDF’s “incomprehensible attitude” amidst stalled tariff negotiations for over a year. The primary concern revolves around a megawatt-hour (MWh) price that is deemed excessively high, jeopardizing their competitiveness against robust American and Chinese rivals.
Uniden’s representatives voiced their frustration, suggesting that EDF appears to prioritize selling to the highest bidders rather than addressing the needs of struggling industries. Since November 2023, industrialists have been caught in a commercial standoff with EDF, seeking long-term contracts known as nuclear production allocation contracts (CAPN) to replace discounted rates set to expire at the end of 2025.
EDF has proposed contracts targeting an average price of 70 euros per MWh for its nuclear electricity over a 15-year period. However, this offer did not resonate well with approximately fifty major industrial players accustomed to paying only 42 euros per MWh for part of their electricity needs.
Despite the State’s efforts to encourage EDF to finalize more contracts, only a single firm contract has been signed to date, highlighting the dissatisfaction within the industrial sector. As pressure mounts, EDF continues to assert that it remains open to negotiations and aims to sign multiple long-term contracts soon.
EDF’s executive director emphasized that while the auction system complements ongoing discussions, it does not replace them. He remains hopeful, indicating the possibility of a second major long-term contract being signed shortly, following an initial agreement with a chemical industry player.
In light of the evolving situation, industrialists are encouraged to explore markets that currently offer attractive pricing, as the rates are projected to be around 60 euros per MWh from 2026 to 2029. This price is significantly lower than the 85 euros previously discussed at the end of 2023.
Former Minister of Economy Bruno Le Maire has recently voiced his support for the industrialists on social media, arguing that EDF’s auction strategy could undermine the competitiveness of French industry.