At 31 December 2020, Enedis and EDF were co-concession holders of421 concessions contracts, covering around 95% of the population in continental metropolitan France. The concession contracts are generally concluded for a period of 25 to 30 years.
On 21 December 2017, the French National Federation of Licensing Authorities (Fédération Nationale des Collectivités Concédantes et Régies , FNCCR), France Urbaine, EDF and Enedis signed a framework agreement based on a new concession agreement model. Twenty-five years after the 1992 agreement with FNCCR, this new framework agreement includes France Urbaine which represents municipalities, large urban inter-municipalities and cities of which the majority of the members have contracting authority status for the public distribution of electricity. The new standard agreement endorsed by this agreement restates the principles of the French concession model: public service, regional solidarity and national optimisation, whileat the same time taking into account issues involving energy transition. The official introduction of this new model opens the way to a modernised and lasting relationship between Enedis and the concession contracting authorities. Despite the health crisis and municipal elections delaying the closing of certain negotiations, renewal of concession agreements continued at a sustained pace in 2020. At 31 December 2020, 240 concession contracts had thus been entered into on the basis of the new model. Other negotiations have been undertaken or scheduled, with the goal of renewing almost all the contracts signed using existing contract templates by the end of 2021.
Regulatory notice
In accordance with Articles L. 121-4 et seq. and L. 322-1 et seq. of the FrenchEnergy Code, and Article L. 2224-31 of the French Local Authorities Code, the public distribution of electricity is operated under a system of public service concessions. Pursuant to this body of law, the contracting authorities organise the public electricity distribution service through concession agreements and general specifications that set forth the respective rights and obligations of the contracting authority and the operator. Currently, the contracting authorities are most often public institutions formed by associations of several municipalities cooperating together, some of which may have a departmental coverage.
The separation of production and supply activities on one hand, and network activities on the other imposed by European Directives has led to the identification of a public service with two distinct missions: on the one hand, the regulated tariff supply mission entrusted to EDF and the LDCs in their respective exclusive service areas and, on the other hand, the development and operation of the public electricity distribution networks, entrusted to Enedis and the LDCs in their respective exclusive service areas, and EDF for areas not interconnected to the continental metropolitan network.
Article L. 334-3 of the French Energy Code specifies that concession contracts must be tripartite, signed by the contracting authority, the distribution network manager (or the territorially competent LDC) for aspects relating to the management of the public distribution network, and by EDF (or the territorially competent LDC) for aspects relating to regulated tariff distribution.
Within the limits fixed by the law and by the jurisprudence, the contracting authorities are the owners of the distribution networks which constitute returnable assets(1).
Pursuant to Article L. 3213-1 of the French Public Procurement Code, transposing Article 10.1 of the Community Directive no. 2014/23/EU of 26 February 2014 into national law, concession contracts for the operation of the public distribution network and the supply of electricity at regulated tariffs are concluded by mutual agreement, that is to say without publicity and competitive bidding procedures.
The ELAN Housing bill adds chapter 5 about rising mains to the section of the French Energy Code on accessing and connecting to electricity networks. Rising mains put into service after the law is published will belong to the public distribution network. Those put into service before the law is published were integrated into the public distribution network on 24 November 2020. Until such date, owners and joint owners had the opportunity to apply to have their rising mains integrated ahead of time. They could also choose to retain ownership of the mains.
The common service function shared by Enedis and GRDF is defined byArticle L. 111-71 of the French Energy Code. Its missions in the electricity and gas distribution sector are building structures, site project management, network operation and maintenance, and metering operations. This service is not a legal entity in its own right. Enedis and GRDF’s relations in this common service are governed by an agreement that defines the scope of the service and the resulting division of costs.The agreement has an unlimited term and can be terminated at any time subject to18 months’ notice: in such a case, the parties undertake to renegotiate the agreement during the notice period. It is updated regularly. In 2019, the governance agreements between Enedis and GRDF were completely reviewed.
Enedis, guarantor of the electricity distribution public service, invests at all times to develop, modernise and secure the electrical network. The adaptation of the electricity grid to the new needs of French society is a major strategic challenge. To achieve this, Enedis is continuing the industrial deployment of the Linky system, based on a new generation of meters, called “smart meters” that can receive orders and send data without the physical involvement of a technician. This system represents the first stage of smart grid implementation or “Smart networks”.
It involves equipping the distribution network with connected objects, including the Linky meters, in order to integrate renewable energy electricity generation, which has undergone a significant expansion, further ensuring the balance between generation and consumption at all points of the electricity grid, and enabling suppliers and other customers to offer new energy solutions to their customers. The large-scale advent of Linky meters also accelerated the implementation of new contractual offers (differentiated and lower tariffs, for the use of “green” electricity generated by solar panels). With Linky, electricity consumption curves per day, per week or per month are available to customers. This facilitates the management of energy consumption and is a concrete lever that meets the expectations of the public authorities responsible for energy transition.
Enedis launched on 1 December 2015 the widescale deployment of Linky meters, representing total investment of €3,972 million(2) over the 2014-2021 period. At the end of 2020, the cumulative investment (2014-2020) already carried out amounted to €3,415 million, for 29.66 million Linky meters installed (including those used in the experiment), of which 29.03 million open to all services. The percentage of Linky meters installed was 78.6%, compared to a target determined by the CRE for the end of 2020 of 80%. Almost four out of five households in France are now equipped with Linky smart meters.
Enedis has structured the French industrial sector for smart electricity grids with otherFrench players in this sector through the “Thinksmartgrids” association which now numbers around one hundred members (major industrial players, startups, universities, research institutes, etc.).
Its purpose is to maintain its leadership in Europe and to expand in the rest of the world. Belgium, Egypt, Indonesia and India have selected solutions proposed by Enedis and its expertise. In India in particular, deployment of smart meters in the region of New Delhi entered its operational phase in 2019.
(1) Returnable assets are those that must imperatively be returned to the granting authority at the end of the concession. Such property is deemed to belong to this local authority from the outset. They are defined by the concession contract or even by the law. By default, generally qualified as such are the assets that are indispensable to the performance of the concession service.
(2) The programme completion costs were reviewed downward, from €4,455 to 3,972 million for the period 2014-2021, after taking into account prices of the latest contracts signed for equipment (meters and concentrators) and for installation services.
