The PPE covering the periods 2019-2028 was adopted by decree 2020-456 of 21 April 2020, published in the Journal officiel of 23 April 2020. The points on which the final programme differs from the drafts published on 25 January 2019 and 20 January 2020 essentially relate to renewable energies. The PPE sets a target of doubling the 2017 level of installed capacity for electricity from renewable energies by 2028, and increasing offshore wind power capacities, with 6 project tenders to be launched in the first PPE period. EDF’s strategy is entirely consistent with this aim.
To reduce nuclear power output, as well as the closure of the two Fessenheim reactors in the spring of 2020 (see note 5), 12 nuclear reactors will have to be shutdown by 2035. The reactors concerned will be shut down when their fifth 10 year inspection is due, except for two reactors which will be shut down earlier in 2027 and 2028 (two additional reactors could also be shut down in 2025-2026 if certain conditions, notably relating to electricity prices and secure supply, are fulfilled). Priority will be given to shutdowns that minimise the economic and social impact, have the lowest impact on the electricity network, and do not entail closure of an entire site. At the request of the French government, based on these criteria, on 20 January 2020 EDF proposed to examine the possibility of shutting down pairs of reactors at the sites of Blayais, Bugey, Chinon, Cruas, Dampierre, Gravelines and Tricastin. The PPE stipulates that early reactor shutdowns will be confirmed 3 years prior to implementation.
A draft PPE published on 25 January 2019 by the Ministry for the Ecological and Inclusive Transition stated that the Government, together with the industry, would conduct a programme of work by mid-2021 to examine the questions of the cost of new nuclear energy production and its advantages and disadvantages in relation to other low-carbon generation methods, the possible financing models, the project management modalities for new reactor projects and public consultation, and matters relating to the management of waste generated by the potential new nuclear fleet; based on this information and depending on developments in the energy situation, the Government will make a decision regarding the suitability of launching a renewal programme for nuclear installations. EDF is fully mobilised in the investigation and preparation of all aspects of these matters, in conjunction with the public authorities.
Adoption of the PPE in April 2020 led to re-estimation of nuclear provisions at 30 June 2020, referring to various scenarios for the early shutdowns of two reactors in 2027 and 2028. This resulted in a €32 million increase in nuclear provisions at 31 December 2020 (mainly decommissioning provisions) (see note 28). Accelerated depreciation periods were also estimated based on these scenarios, leading to an increase in depreciation in the second half of the year, with no significant impact on EDF’s financial statements (see note 1.2.1).
The reactor shutdowns at the Fessenheim plant took place on 22 February 2020 for reactor 1 and 30 June 2020 for reactor 2, in accordance with decree 2020-129 of 18 February 2020 terminating the plant’s operating licence (see note 5).
As announced in the draft PPE published on 25 January 2019, in January 2020 the French government launched a call for contributions regarding the fundamental findings driving the plan to reform the economic regulations for existing nuclear facilities, and their construction and operating principles. The proposed regulations would replace the ARENH mechanism and require EDF to provide a service of general economic interest (SGEI) for protection of the consumer and the climate.
This SGEI would be supported by economic regulation of the existing nuclear fleet, to reconcile and contribute to the following aims:
Like many other actors in the sector, EDF participated in this consultation, which ended on 17 March 2020.
In this context, France’s Minister for the Ecological and Inclusive Transition andMinister of the Economy and Finance commissioned the CRE to carry out an assessment of the costs borne by the nuclear operator, and to determine fair remuneration for its nuclear activities under the government’s potential future regulations. At a hearing before the French National Assembly’s Economic Affairs Committee on 7 July 2020, the CRE Chairman Jean-François Carenco stated that the CRE had sent its report on the cost of nuclear power in France to the government.The CRE also presented the conclusions of that report to the European Commission’s Directorate-General for Competition on 16 July 2020.
The terms and conditions of new regulations governing existing nuclear facilities are currently being examined by the French government and the European Commission.
In accordance with Article L. 337-4 of the French Energy Code, regulated electricity sales tariffs are set by the Ministers for Energy and the Economy following proposals by the French Energy Regulatory Commission (Commission de régulation de l’énergie or CRE).
France’s Council of State ruled in decisions of 18 May and 3 October 2018 that the principle of regulated electricity sales tariffs is compatible with European Union law when such tariffs serve the general economic interest objective of guaranteeing consumers an electricity price that is more stable than market prices.
In accordance with European Directive 2019/944 of 5 June 2019 on common rules for the internal market for electricity, the French Energy and Climate law of 8 November 2019 authorises continuation of regulated sales tariffs, but they are reserved for residential or business consumers with a subscribed power level of up to 36kVA, provided they have fewer than 10 employees and their annual sales, income or balance sheet total is below €2 million.
France’s Energy and Climate law, which sets out the terms of the partial discontinuation of regulated sales tariffs for non-residential customers, and the associated implementing decisions, are presented in note 3 to the financial statements at 31 December 2019.
2020 was marked by implementation of laws, particularly regarding:
