Rare are the subjects able to unite almost unanimously LFI, LR, the RN, EELV, the PCF and the non-registered. Yet this is what happened Friday in the National Assembly, during the examination of the famous bill on purchasing power. Indeed, against the opinion of the majority, the opposition deputies joined forces to raise the price at which EDF is forced to sell part of its electricity, via the Arenh mechanism (regulated access to electricity historical nuclear power. Consequently, this tariff should thus reach “ at least 49.5 euros “per megawatt hour (MWh) from January 1, 2023 against 42 euros today, according to an amendment tabled by LR and adopted at first reading, with 167 votes in favor and 136 against.
And yet, “ it is actually a legislative rider “, that is to say a provision that does not resolve the subject dealt with by the bill on purchasing power, believes Jacques Percebois, economist and director of the Center for Research in Energy Economics and Law ( Creden). So why did parliamentarians pass it by force in this way, thereby tackling a subject as complex as it is divisive?
The essential question of volume
Rather than containing the bills of the French, the purpose of the maneuver is in fact to protect the flagship EDF, whose financial situation worries despite the recent announcement of renationalisation. In fact, while the price of electricity now reaches up to several hundred euros per MWh on the markets, forcing the incumbent supplier to sell part of its electrons at only 42 euros/MWh makes the opposition. Above all, the executive decided at the beginning of the year to increase from 100 to 120 TWh the volume of Arenh that EDF will sell at a low price in 2022 in order to contain the rise in prices for consumers, which should lead to a shortfall for the group of nearly 10 billion euros, according to its latest estimates. By raising the price of the purchase of precious electrons by the company’s competitors by a few euros, which has not been reviewed since 2012, the deputies hope to limit the damage from next year.
Only here: such a measure would not reduce the bills of the French. Because the core of the problem actually lies elsewhere. ” What matters is not the price, but the volume of Arenh sold each year “, explains Jacques Percebois. And on this thorny subject, the deputies’ coup does nothing to reduce the central perverse effect caused by the mechanism of the Arenh when prices soar.
Arenh’s request explodes quotas
To understand it, you have to go back to the origins of the Arenh. In 2010, nuclear production amounting to approximately 400 TWh per year in France, ” it was decided that alternative suppliers could access 25% of this at cost price “says Jacques Percebois. This is why the ceiling was set at 100 TWh, in order to allow EDF’s competitors to play on equal terms with the incumbent operator, and to maintain competition that some describe as artificial. “Each customer of an alternative supplier thus entitles him, in theory, to 67 MWh of Arenh »emphasizes Jacques Percebois.
But the number of these sales representatives has exploded, reaching nearly 80 today in France, from EkWateur to Ohm Energy, via Enercoop, Ilek and Mint Energy. Result: these last years, while more and more customers have deserted EDF to compete, the volume of Arenh required has also skyrocketed. For several years now, this has largely exceeded the overall volume available; it even reached more than 165 TWh in 2021, a figure that is expected to rise further.
Result: even with the increase in the quota to 120 TWh, the alternative suppliers must return the quantity of Arenh which is due to them in principle if this exceeds the authorized ceiling. This difference, which is called capping, pushes them to buy the missing production directly on the markets, thereby increasing their supply costs.
The regulated sales price must adapt to alternatives, and not the other way around
And this is where the shoe pinches: the prices offered by EDF to consumers and set by the public authorities must adapt to these cost increases. In fact, the regulated sales tariff (TRV), or blue tariff, is not built independently of the wholesale electricity market: each time the share purchased by EDF’s competitors outside Arenh increases, ” we also revalue the part indexed to the wholesale market in the TRV “, explains Jacques Percebois
“In concrete terms, to ensure that the incumbent electrician does not have too strong an advantage, the volume of Arenh requested by the alternatives beyond the authorized ceiling (the capping), affects the TRV, in order to that it is contestable by EDF’s competitors. In fact, it is not the competitors who adapt to the TRV, but the TRV which adapts to the price structure of the competitors” continues the economist.
In other words, the share of the market complement assumed by the other suppliers, i.e. the quantity of electricity that they will have to buy on the markets due to the lack of Arenh, is artificially replicated in the tariff regulated sales of EDF, and therefore in the consumer bill. To perfect the symmetry, this share is calculated by the Energy Regulatory Commission (CRE) on the basis of spot prices (established by the stock exchanges on D-day for the following day) for the last 24 months.
Consequently, when prices soar and Arenh’s quotas do not meet demand, mechanically, the TRV also increases. ” This is the reason why it should have grown by more than 35% in 2022 in the absence of the tariff shield put in place by the State. “says Jacques Percebois. Without the effort of taxpayers, the bills of the French would therefore have exploded.
The government will have to present an alternative system
This is why the increase in the price of the Arenh does not respond to the problem of purchasing power, since it does not solve the central equation: should we give up this mechanism, or rather reverse increase the amount of electricity delivered through this channel to alternative suppliers, in order to minimize capping? For the moment in any case, the deputies have not decided. In fact, contrary to the price of the MWh, they did not review the ceiling of 120 TWh decided by the government.
However, a clear answer will have to be found quickly, while Bercy is considering removing the tariff shield to prefer targeted aid to the most modest French people. The subject is also one of the files closely studied by the executive since the regulatory texts provide for the Arenh to end on December 31, 2025 anyway. It remains to be seen what alternatives will emerge, but also what the real impact will be. of the current system on consumers over the next three years.