The additional remuneration paid to electricity producers using renewable energies was introduced by France’s law on the Energy Transition for green growth. It is a support mechanism intended to guarantee reasonable remuneration for producers who sell their energy directly on the markets, by compensating for the differential between the revenues from those sales and a reference amount. Conversely, when these revenues are higher than the reference amount, the producer must repay the differential received. This mechanism complements the purchase obligation system in France.
From the first half of 2020, other items also include income and expenses related to closure of the Fessenheim plant.
In accordance with the application for termination of operations and the declaration of the permanent shutdown of both reactors at Fessenheim nuclear power plant sent by EDF to the Minister for the Ecological and Inclusive Transition and to the ASN on 30 September 2019, EDF shut down reactor 1 on 22 February 2020 and reactor 2 on 30 June 2020.
On 27 September 2019, due to the cap on nuclear power output set by the “energy transition for green growth” law of 17 August 2015, the French State and EDF signed a protocol agreement whereby the State will compensate EDF for the early closure of Fessenheim.
The compensation paid under the terms of this protocol comprises:
This compensation is recognised as income in profit and loss as and when the associated costs are incurred;
Since its decoupling from the network, the Fessenheim plant has entered a post- operating phase that will last approximately five years. During that period, units 1 and 2 will continue to be operated and maintained as “defueled core” and “evacuated fuel” reactors. This will require a series of technical and administrative operations. A significant milestone was reached on 18 October 2021 when the last two packages of spent fuel were dispatched from Fessenheim unit 1 to the Orano site at La Hague. The dismantling decree for Fessenheim is expected to be issued in 2026.
The post-operating expenses and income for these two reactors mainly comprise:
In France, the Law of 13 July 2005 introduced a system of energy savings certificates. Suppliers of energy (electricity, gas, heat, cold, domestic fuel oil and fuel for vehicles) with sales above a certain level became subject to energy savings obligations, initially for a three-year period.
To meet this obligation, three sources are available to the EDF group: supporting consumers in their energy efficiency operations, funding State-approved energy savings certificate schemes, and purchasing certificates on the secondary market.
Expenses incurred for this purpose are recorded in expenses of the year concerned, in “Other operating income and expenses”. Expenses in excess of the accumulated obligation at year-end are included in inventories and may be used to cover the obligation in later years.
A provision is recognised if the volume of energy savings certificates obtained is lower than the cumulative energy savings obligation at the year-end. The amount of the provision is equal to the cost of actions still to be taken to extinguish the obligations related to the energy sales made.
The fourth period of France’s energy savings certificates scheme (2018-2021) ended on 31 December 2021. Despite the substantially higher energy savings targets, the EDF group met its obligation and had a stock for the start of the fifth period.
Decree 2021-712 on the fifth period of the energy savings certificates scheme (2022-2025) was published in the Journal officiel of 5 June 2021. The decree made the scheme more effective (for example by significantly reducing special measures and bringing calculations close to the real savings), increased funding for very vulnerable households (higher obligations intended to benefit households in situations of energy poverty, restriction of the scope to very vulnerable households, an increase in the penalties in this category to €20/MWhc) and encouraged development of carbon-free energies:
However, given the low level of market prices observed in the first few months of the fifth period of the energy savings certificate scheme (the first half of 2022), the number of new energy savings projects decreased significantly. To launch a new dynamic, the DGEC decided to revise the scheme obligations upwards for the fifth period, through decree 2022-1368 of 27 October 2022.
This new decree officially raised the obligations for the fifth period (2022-2025) as follows:
The obligation for the fifth period of the energy savings certificate scheme (2022-2025) is thus significantly higher than in the fourth period (2018-2021) (from 3100TWh versus 2133TWh).
