French utility EDF sues the government over mandatory nuclear power sales

The French state-owned power utility EDF has filed a legal claim with the Conseil d'Etat (the French administrative supreme court), as well as a claim for indemnification, for an amount estimated to date at €8.3bn, with the French state. Indeed, in January 2022, the French government forced EDF to sell off an additional 20 TWh of nuclear power generation in 2022 under the ARENH (Accès régulé à l'électricité nucléaire historique) to alternative suppliers at a regulated price of €46.2/MWh to limit the rise in electricity tariffs. The company already submitted a preliminary administrative recourse to the French government to request the withdrawal of the Decree and the Orders of March 2022 relating to this allocation.

The ARENH law (2010) obliges EDF to sell part of its nuclear generation (up to 100 TWh/year, i.e., around a quarter of its production) to alternative suppliers on the wholesale market at a regulated price, which has been set by the CRE at €42/MWh since 2012. In early December 2021, the CRE received requests for 160 TWh of nuclear power generation under the ARENH mechanism from alternative suppliers for 2022, which is 10% more than in the previous year (146 TWh). As demand was higher than the 100 TWh cap, the regulator decided that all the 81 electricity suppliers that passed an order would receive around 62% of the amount they requested.

The extension of the mandatory power delivery by EDF to alternative suppliers occurs while the company is facing a sharp drop in its power generation. Indeed, more than half of EDF's reactors are on planned and unplanned maintenance, reducing significantly the volume of nuclear electricity that the company can directly sell to customers. Consequently, EDF posted its largest ever half-year loss in the first semester 2022 reaching €5.3bn.