It also stated that EDF-controlled subsidiaries’ excess applications would be fully curtailed (this does not apply to network operators) and they could enter into contracts with the parent company that replicate the ARENH system and terms of supply, particularly the curtailment rate for alternative suppliers. In the method proposed by the CRE in decision 2020-002 concerning regulated sales tariffs for electricity, this curtailment mechanism, when applied, makes reference to market prices more influential in determining regulated sales tariffs.
Decree 2020-1414 of 19 November 2020 modified the regulatory section of theEnergy Code concerning the ARENH and CSPE mechanisms, setting out the method for allocating the ARENH price supplement paid between suppliers and EDF, and assigning to the CRE the task of defining the methods for calculation and allocation of the ARENH price supplement if the maximum volume is reached. The same decree modified the measures applicable in the event of default on payment, stipulating that the purchaser concerned is banned from ARENH sales for a one-year period as soon as the electricity transfer is first stopped.
The Energy and Climate law of 8 November 2019 introduced new measures. It raised this initial 100TWh ceiling to 150TWh from 1 January 2020, allowing the French government to raise the maximum total volume of ARENH deliveries above 100TWh, and to revise the ARENH price by ministerial decision during a transition period. However, the Ministry for the Ecological and Inclusive Transition announced that no change would be made to the ARENH price or volume for 2021.
ARENH applications during the November 2020 session for delivery in 2021 totalled 146.2TWh (excluding applications from EDF subsidiaries). Since the maximum total volume has not been modified, the volume to be delivered totalled 100TWh and as in the previous year the CRE curtailed each supplier’s application. Further volumes were also sold by EDF to its subsidiaries through contracts that replicate the ARENH mechanism, and to compensate for network losses (26.3TWh).
In the context of the Covid-19 pandemic, in decision 2020-071 of 26 March 2020 the CRE introduced measures in favour of suppliers benefiting from the ARENH mechanism. These measures consisted of cancelling the “CP2” (price supplement)(1) penalty for excessive ARENH applications for the year 2020, and deferring settlement of ARENH invoices upon request by the supplier, under the terms defined in ordinance 2020-316 of 25 March 2020 on settlement of invoices, as detailed in CRE decision 2020-076 of 9 April 2020.
EDF has also offered special payment terms to small suppliers in a fragile position.The application methods for these terms were established by CRE decision 2020-076 of 9 April 2020.
Litigation relating to the ARENH mechanism has also been instigated by some energy suppliers in the context of the Covid-19 pandemic. Details are provided in note 2.1.
In its decision 2020-315 of 17 December 2020, the CRE proposed changes to theARENH master agreement model to incorporate the modifications introduced by decree 2020-1414. In decisions 2020-277 of 12 November 2020 and 2020-285 of2 December 2020, it also set out the methods for calculation and allocation of theARENH price supplement if the maximum volume is reached.
Sales are comprised of:
(in millions of euros) | 2020 | 2019 |
|---|---|---|
Sales of energy* | Sales of energy* 2020 41,692 | Sales of energy* 2019 43,831 |
electricity | electricity 2020 37,456 | electricity 2019 38,392 |
gas | gas 2020 4 236 | gas 2019 5,439 |
Sales of services and other | Sales of services and other 2020 2,623 | Sales of services and other 2019 2,324 |
SALES | SALES 2020 4 315 | SALES 2019 46,155 |
*Including a share of delivery costs for sales of electricity and gas.
The variation in electricity sales in 2020 is mainly due to unfavourable volume effects, including:
These effects were partly offset by favourable price effects on market offers and sales at regulated tariffs. For the regulated tariffs, the price effect results from indexing of tariffs from 1 June 2019 (+7.7% on “blue” tariffs for residential and non-residential customers), 1 August 2019 (+1.49% on “blue” tariffs for residential customers and +1.34% on “blue” tariffs for non-residential customers), 1 February 2020 (+3.0% on “blue” tariffs for residential customers and +3.1% on “blue” tariffs for non-residential customers) and 1 August 2020 (+1.82% on “blue” tariffs for residential customers and +1.81% on “blue” tariffs for non-residential customers).
In gas sales, the decrease principally relates to sales with EDF Trading in a context of falling market prices in 2020.
Sales of services were higher as a result of gains on sales of capacity certificates, as the price of capacity certificates for 2020 and subsequent years rose substantially
The estimated impact of the Covid-19 pandemic on sales in 2020 is €(1,117) million (see note 2.1).
(1) Penalities for excessive ARENH applications.
