Universal Registration Document 2022

This proposed increase was primarily justified by:

• the exceptionally high prices on the wholesale markets for delivery in 2023, which have been at record levels for more than a year;
• the outstanding consequences of the tariff cap applied in 2022, to reflect the ultimate reality of the costs involved in the “cost stacking” including the effects of the additional 20TWh of ARENH supplies.

In line with the tariff cap, this proposal was rejected by the Ministers for the Economy and Energy, who set the increase in the “blue” tariffs for residential and non-residential customers at 15% including taxes (20% and 19.9% respectively excluding taxes) through tariff orders of 30 January 2023, published in the Journal officiel of 31 January 2023 and implemented from 1 February 2023.

“TURPE” Network access tariffs

TURPE 6 Distribution tariffs

The CRE issued two decisions of 21 January 2021 (published in France’s Journal Officiel 0096 of 23 April 2021) on the TURPE 6 Transmission (high voltage) and TURPE 6 Distribution (medium voltage – low voltage), after the Higher Energy Council (Conseil supérieur de l’énergie) gave its approval. These tariffs apply from 1 August 2021 for a period of approximately 4 years.

For distribution expenses, in its tariff decision 2021-13 of 21 January 2021, the CRE set the margin on assets at 2.5% and the additional return on regulated equity at 2.3%. The average tariff increase was +0.91% at 1 August 2021. In decision 2022-158 of 9 June 2022, the CRE set the increase in the average TURPE Distribution tariff from 1 August 2022 at +2.26%.

For transmission expenses, in its tariff decision 2021-12 of 21 January 2021, the CRE set a nominal pre-tax weighted average cost of capital (WACC) of 4.6% for the return on RTE’s regulated asset base. The average tariff increase was +1.09% at 1 August 2021. In decision 2022-157 of 9 June 2022, the CRE set the change in the average TURPE Transmission tariff from 1 August 2022 at -0.01%.

In its decision 2022-317 of 1 December 2022, the CRE adapted the price regulation framework to make the TURPE 6 (high voltage) and TURPE 6 (medium voltage – low voltage) tariffs incorporate the impact of wholesale electricity prices on the business of RTE and Enedis, particularly by refocusing certain incentives on purchase volumes and losses, rather than on prices.

Supplier commissioning

In application of the CRE’s decision of 18 January 2018, energy suppliers receive remuneration from distribution network operators for the service of managing single-contract customers on their behalf.

The commissioning principle is identical for all suppliers selling single-contract market-price offers. Only regulated electricity tariffs have given rise to slightly lower commissions (€4.50 instead of €6.80 per point of delivery until 1 August 2019), with progressive reduction of this difference to zero by 1 August 2022.

For remuneration of past customer management charges (prior to 1 January 2018), the CRE’s decision set an amount it considered as a cap that can be passed on through the TURPE tariff.

Law 2017-1839 of 30 December 2017 introduced a measure intended to rule out the possibility of suppliers receiving remuneration from network managers for past customer management services.

Electricity Equalisation Fund

The TURPE tariff for the medium and low-voltage network is identical for every electricity network operator. It is determined on the basis of forecast expenses to be borne by Enedis, provided they correspond to an efficient network operator, and forecasts of the number of consumers connected to Enedis’ networks, their consumption, and the power level subscribed.

As this tariff cannot always cover the specific needs of certain service zones, the Electricity Equalisation Fund (FPE) exists to compensate for disparities in network operating conditions. The Energy Code requires electricity distribution costs resulting from public network operation to be shared between public distribution network operators. There are two equalisation mechanisms: one based on fixed amounts, the other set by the CRE based on analysis of the network operators’ accounts. The calculation method for the fixed-rate allocation mechanism is defined by decree and ministerial order. At EDF, this concerns the Island Energy Systems (SEI).

In a decision of 13 July 2022, the CRE set the final amount of the allocation from the Electricity Equalisation Fund to SEI, based on analysis of its accounts, at €158.1 million for 2022.

Capacity mechanism

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.

Another consultation phase concerning structural changes to the French capacity mechanism has been in progress since April 2022. The future mechanism could be introduced from delivery year 2026, subject to approval by the European Commission after the necessary examination period.

For the delivery years shown below the mean market prices resulting from capacity auctions ahead of the delivery year were as follows:

The delivery year 2023 was opened to auction in 2022, and six auctions have been held since then. These capacity auctions resulted in the following prices: €42.4/kW in March; €42.5/kW in April; €41.9/kW in June; €41.9/kW in September; €45.0/kW in October; €60.0/kW in December.

Four auctions were also held in 2022 for the delivery year 2024, with the following results: €20/kW in April and June, €34.1/kW in October, and €23.1/kW in December.

ARENH

The ARENH (Accès régulé à l’énergie nucléaire historique) scheme for regulated access to historic nuclear power, set up in 2011 and due to end on 31 December 2025, allows alternative suppliers to purchase electricity from EDF to supply their final customers, after signing a framework agreement, at a regulated price for set quantities determined under the provisions of the French Energy Code. This scheme is also open to network operators to cover their energy losses.

The ARENH price, determined by the Ministers for Energy and the Economy following a proposal by the CRE, has been fixed at €42/MWh since January 2012. This includes delivery of the electricity and has incorporated the associated capacity guarantees since 2017.

The maximum total ARENH volume that can be sold by law to suppliers who apply to the scheme to cover the needs of their final customers is set by ministerial order and cannot exceed a legal ceiling. Until 31 December 2019, the ceiling was 100TWh per year. It was then raised to 150TWh by the Energy and Climate law of 8 November 2019.

The “MUPPA”* law of 16 August 2022 law introducing urgent measures to protect purchasing power reduced this legal ceiling to 120TWh. The MUPPA law also set a minimum ARENH price of €49.50/MWh, although its application is conditional on prior approval by the European Commission.

On 13 January 2022 the French government announced further exceptional measures to limit the rise in electricity tariffs for consumers in 2022. These measures included EDF making an additional ARENH volume of 20TWh available to eligible suppliers over the period 1 April to 31 December 2022, at the price of €46.20/MWh.

The terms for application of this measure were laid down in a decree of 11 March 2022 and four ministerial orders. Eligible suppliers wishing to benefit from these additional volumes at the price of €46.20/MWh during the period 1 April to 31 December 2022 were required by the decree to sell EDF an equivalent volume to the volume sold to them by EDF under the ARENH scheme, at the price of €256.98/MWh (the average wholesale market price between 2 and 23 December 2021 for baseload electricity supplies in