Phuc-Vinh Nguyen, chercheur sur les politiques de l

“There is a dissonance between the role of EDF and the one the State wants it to play”



Tension is rising between the State and EDF. The latter announced on Tuesday that he had filed an appeal with the Council of State claiming compensation from the State for 8.34 billion euros. The electrician thus intends to obtain compensation for the losses caused by the “tariff shield” imposed by the State. Intended to contain the rise in regulated electricity prices to 4% in 2022, this system forced it to increase by 20% the annual quota of electricity sold at a reduced price to its competitors, to 120 TWh (compared to 100 TWh previously) according to the principle of regulated access to historical nuclear electricity” (Arenh). The latter requires EDF to sell its energy at a very advantageous price to its competitors, compared to current market prices, to promote the diversity of offers and allow consumers to benefit from attractive prices.

EDF must remain a “unique” group, not having renewable energies is a “utopia” (Jean-Bernard Lévy, CEO)

A conflict which intervenes whereas the State announced, at the beginning of July, the nationalization of EDF by September. Beyond acquiring the remaining 16% of the capital of the electrician – the State already owns 84% ​​- this operation raises many questions, starting with that of the role of EDF and that which the State wants to give him, as explained Phuc-Vinh Nguyen, researcher on European and French energy policies at the energy center of the Jacques Delors Institute at La Tribune.

Why is the tariff shield at the center of EDF’s grievances against the State?

EDF is in a difficult situation for two reasons. On the one hand, because of the weakness of the production of its nuclear fleet which will cause it a significant shortfall. Indeed, traditionally, France exports electricity in the summer. However, this year, we are going to have to import it. And the weakness of the nuclear fleet will also be felt this winter. There is also this question of tariff shield » which is partly financed by EDF within the framework of Arenh.

This appeal launched by EDF, which therefore finds itself involved, can therefore also be seen as a means of contesting this measure. Indeed, the fact that it finances the tariff shield may raise questions, because EDF is not necessarily intended to protect the consumer from a possible rise in the price of energy. Rather, it is up to the government to introduce measures to support consumers. The system currently in force was put in place in an emergency, allowing the executive to react quickly. But it should not be intended to be permanent.

Especially since if the Arenh is a European rule, the State has accepted its establishment in France in exchange for other concessions on the subject. There is a dissonance to be clarified about the image and the role that EDF must play and that which the government intends for it to play. The nationalization of EDF can, perhaps, clarify this situation.

What will the nationalization of EDF change?

The state already owns 84% ​​of EDF’s capital, so the fact that it goes up to 100% won’t change much. It is, in a way, the first stage of a rocket that will allow a large-scale reform of EDF. Although the government justifies this nationalization as essential to its new energy policy, it is above all a clarification of EDF’s role in this new policy. This therefore has more of a symbolic significance, if only for the signal that is sent to public opinion. When you want to take over the country’s energy policy, it’s better, in terms of publicity, to own EDF 100%.

Renationalisation of EDF: understand everything in seven questions

What challenges does this nationalization pose?

Although it has already been announced that the government will launch a public takeover bid (OPA) at 9.7 billion euros by the beginning of September, we still know little about the timetable for the takeover and there are several questions that need to be answered in a short time. This is particularly the case for the Arenh mechanism, which expires at the end of 2025. It is therefore necessary to agree on this subject with the European Commission and to obtain an agreement, at least broadly, before the next European elections which are in 2024. Because the key players in this file are not only Emmanuel Macron and the Minister of the Economy, Bruno Le Maire, but also the European Commissioner for Competition Margreth Vestager. However, it is not certain that she will still hold this position after the elections.

Another subject is likely to raise tensions: that of the Hercules reform (this project plans to split EDF into three entities: a public company for nuclear power plants, another listed on the stock market for the distribution of electricity and renewable energies, and a third devoted to hydroelectric dams, editor’s note). When it was debated in 2019, the subject aroused strong tensions among unions who feared a dismantling involving a form of privatization. However, the question of the Hercules project could well come back on the table. The State will therefore have to clarify the direction in which it wishes to go.

Renationalisation of EDF: this difficult balance between public finances and shareholder satisfaction

Finally, it will above all be necessary to provide guarantees of the technical feasibility of the energy policy desired by the State by nationalizing EDF and this remains a great unknown. The State will get its hands on the wallet, but will EDF be able to deliver the EPR orders? Does the group have the necessary manpower and expertise? What does not seem obvious for the moment. Answers are also expected concerning the succession of its CEO, Jean-Bernard Lévy. The challenges ahead for EDF are considerable and we need to find someone who is familiar with energy issues. Finding the ideal candidate is not an easy task, especially in such a short time, as all these questions require answers quickly.