In compensation for the 2021 charges, France’s initial finance law for 2021 introduced a €9.1 billion “public energy service” item in the general budget, to cover additional costs incurred on support contracts (purchase obligations and additional remuneration) for renewable energies and biogas, solidarity charges borne by gas and electricity suppliers, costs associated with support for non-renewable energy production (essentially cogeneration), and the cost of applying the standard national tariffs to zones that are not connected to France’s mainland network.
Income generated by the domestic tax on the final consumption of electricity, now renamed the Compensation for Public Electricity Charges (CSPE), goes directly into the general budget. The CSPE tax is collected directly from final consumers of electricity in the form of an additional levy on the electricity sale price (collected by the suppliers), or directly from electricity producers that produce electricity for their own uses.
The level of the CSPE tax was set in 2016 at a full rate of €22.5/MWh, and eight reduced rates ranging from €12/MWh to €0.5/MWh depending on criteria of electro-intensiveness, business category and the risk of carbon leakage from installations (the risk of industries relocating to countries where greenhouse gas emissions are higher due to their electricity mix). These rates remain unchanged in 2021.
The amount of expenses to be compensated to EDF for 2021 is €5,472 million. The amounts received in 2021 from the State’s General Budget totalled €8,085 million.
The surplus compensation principally results from changes in market prices between 2020 and 2021. The renewable electricity support charges to be compensated decreased significantly due to the rise in market prices in 2021, whereas the compensation received from the State (defined in the Finance Law for 2021 on the basis of 2020 market prices, which were particularly low) was very high.
Consequently, at 31 December 2021, EDF recognised an operating liability due to the State of €294 million (compared to a receivable of €1,974 million at 31 December 2020).
During 2021 EDF also bore an amount of €255 million in repayment of excess amounts received in 2016 under the former CSPE mechanism.
Finally, in accordance with decree 2016-158 of 18 February 2016 concerning compensation for public energy service charges, on 22 July 2021 the CRE published its decision 2021-230 of 15 July 2021 setting out a forecast of EDF’s public service charges for 2022 (€7,620 million), a revised forecast of charges for 2021 (€7,142 million), and the actual charges recorded for 2020 (€8,034 million).
The French capacity mechanism took effect on 1 January 2017. It was introduced by France’s Energy Code to contribute to guaranteeing a secure power supply in France.
As a result of the capacity mechanism review clause, in 2021 RTE published a report on the mechanism’s first few years of operation and performance. On the basis of this report, on 29 November 2021 RTE submitted rule change proposals to the CRE for its opinion. In decision 2021-370 of 16 December 2021, the CRE issued a favourable opinion of these proposals and of changes to certain parameters for delivery years 2023 and 2024 (the contribution by interconnections, the extreme temperature vector and the safety coefficient). The CRE considered that the proposed changes will simplify the capacity mechanism for all actors, and improve visibility for capacity market participants. The new rules were approved by decision of the Ministry for the Ecological Transition on 21 December 2021. They set the opening date for trading of capacity guarantees for delivery years 2023 and 2024 at 1 March 2022.
The auctions organised by EPEX Spot for delivery years 2023 and 2024 will be held from March 2022.
Another consultation phase is due to take place in 2022. It will concern structural changes to the capacity mechanism starting from delivery year 2025, which will require approval by the European Commission.
The trading sessions of 2020 registered a significant increase in capacity prices for the 2020s and subsequent years from the auction in June 2020. This is mainly explained by the market actors anticipating lower fleet availability for peak periods, in the context of the Covid-19 crisis. In 2021, prices generally remained high, sustained by electricity prices and tensions on the electricity system for the winter 2021-2022.
For delivery years 2017 to 2021, the mean market prices resulting from capacity auctions ahead of the delivery year were as follows:
| Delivery year | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Price (€/kW) | Price (€/kW) 201710.0 |
Price (€/kW) 20189.3 |
Price (€/kW) 201917.4 |
Price (€/kW) 202019.5 |
Price (€/kW) 202131.2 |
The delivery year 2022 was opened to auction in 2020, and ten auctions have been held since then, six of them in 2021. These capacity auctions resulted in the following prices, in chronological order:
Initially planned for the period 2018-2020, the fourth period of France’s energy savings certificates scheme was extended by one year (by law no. 2019-1147 of 8 November 2019 on Energy and the Climate). This period substantially raised the energy savings obligation levels (to 1,600TWhc for the “standard” obligations and 533TWhc for the obligations intended to benefit households in situations of energy poverty), and added a new chapter on antifraud measures concerning energy savings certificates (increasing the number and effectiveness of controls and sanctions).
If there is a shortfall in certificates surrendered at the end of the period, obligated actors must pay a fine of €15 per MWhc of shortfall.
In order to fulfil these obligations, EDF has made every effort to increase its number of energy savings certificates, taking advantage of the “Coup de pouce” operations launched in France early in 2019 (subsidies for insulation, financial aid for replacing oil heating by heat pumps, 50% additional energy savings subsidy for heat pump users, special offers for heat pump maintenance contracts, etc.).
Despite a substantial increase in the energy savings obligation in the fourth period of the scheme (2018-2021), the EDF group met its energy savings target and has a stock of certificates for the start of the fifth period (2022-2025).
