April 5, 2018 / 1:04 PM / 6 months ago

French consumer group says EDF monopoly boosts power prices

PARIS (Reuters) - French consumer group UFC Que Choisir called for an investigation and tighter regulation of state-owned utility EDF, saying its virtual monopoly on power generation in France led to higher prices.

UFC said a five-year study of nuclear plant utilization and wholesale power prices showed that when prices are low, EDF systematically underutilizes its nuclear reactors, leading to greater use of more expensive fossil fuel-fired power stations, which in turn leads to higher retail power prices.

The consumer group estimated that these practices had boosted EDF’s income by about 3.2 billion euros ($3.93 billion) between 2012 and 2016 and had added about 2.4 billion euros to consumers’ bills between 2012 and 2016.

For individual power consumers, whose average bill is around 800 euros per year, the extra cost was about 71 euros over the five-year period for EDF clients and 109 euros for the clients of EDF competitors such as Engie and Direct Energie, which partly rely on EDF-generated electricity.

“The management (of EDF’s nuclear fleet) is completely unfavorable to the consumer and to the exclusive benefit of EDF, because EDF has a monopoly and does what it wants,” UFC president Alain Bazot told reporters on Thursday.

He said it is up to energy market regulator CRE or the French Competition Authority to investigate EDF’s practices.

He also called for tighter regulation of the way EDF operates its nuclear plants, notably an obligation for EDF to justify nuclear output cuts when there is no technical problem.

EDF denied wrongdoing.

“EDF strongly denies UFC’s accusations .... EDF at all times optimizes its power generation fleet ... and operates under the close supervision of market regulator CRE,” the utility said in a statement.

A CRE spokeswoman said the regulator monitors wholesale markets to prevent insider trading and market manipulation.

She said that currently six investigations are under way, but declined to comment on the UFC study.

UFC energy specialist Nicolas Mouchnino said that market data show that a fall in nuclear power output in Germany and Britain typically leads to an increase in wholesale market prices, but that in France nuclear power output typically falls as wholesale prices drop.

“EDF adjusts the capacity utilization of its nuclear fleet in order to boost its profitability, to the detriment of consumers,” he said.

The UFC report also said that since 2015, cross-border power exchanges with Germany have been “dysfunctional”.

It said this was because when wholesale prices are lower in Germany, relatively little power is imported into France, while when power prices are slightly cheaper in France, exports toward Germany are massive.

“There is a need for an investigation into this activity,” Mouchnino said.

France’s interconnectors are operated by EDF grid unit RTE.

Additional reporting by Benjamin Mallet; Writing by Geert De Clercq; Editing by Sudip Kar-Gupta and Adrian Croft

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below