The French nuclear giant EDF, forced to sell energy to competitors below market price, is suing the French government for more than $ 8 billion in compensation. The ironic aspect is that the French government is its sole shareholder …
EDF claims to have lost 8.3 billion euros (almost 8.6 billion dollars at today's exchange rate) as of the date of filing the claim against the government and expects to lose more than 15 billion euros for the full year.
The French power company, which is already 84% government-owned and in the process of being fully nationalized, is forced to sell the electricity it produces to rival power plants to increase competition, as EDF holds the monopoly. Despite the public ownership, EDF is still a private company and the Board of Directors has an obligation to protect the interests of the company, even if the losses derive from the decisions of its main, or only, shareholder.
The initial government decree provides that suppliers can purchase up to 25% of EDF's annual nuclear production between July 2011 and December 2025 at a fixed, discounted price of approximately $ 47 per MWh. However, in January of this year, the government introduced a larger one-fifth cap in order to reduce consumers' energy bills for this year. Then, in March, the government issued further decrees, further increasing the volume and lowering the price for EDF. The losses cited by EDF date back to the latter period.
In June, EDF released results showing its largest half-year loss ever. EDF lost 5.3 billion euros in the first half of this year, compared to 4.2 billion euros in profits in the same period of 2021.
EDF's power plants account for 70-75% of France's electricity consumption, and the government is keen to nationalize the giant to secure energy supplies in a looming crisis that began with Russia's invasion of Ukraine.
Losses for EDF are also increasing in other sectors. Last week, EDF was forced to cut production from nuclear power plants on two rivers, as the heatwave spreading across Europe made the rivers too hot to cool the units. Yesterday, however, EDF announced that, given the energy emergency, it will not slow down further production due to the problem of hot water.
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/edf-fa-causa-al-suo-proprietario-lo-stato-francese/ on Thu, 11 Aug 2022 08:00:46 +0000.