The Court of Auditors presents its report on the organization of the electricity markets

Enabling competition between suppliers, guaranteeing consumers stable prices that reflect the competitiveness of the existing nuclear fleet, ensuring the financing of this fleet and having sufficient capacity to guarantee the balance between electricity supply and demand. The report published today by the Court of Auditors answers three evaluative questions on the main mechanisms of the public policy for the organization of the electricity markets. He stresses that the combined implementation of these mechanisms over the past ten years no longer guarantees that the initial objectives will be achieved. This observation, illustrated to the extreme in the recent context of soaring gas and electricity prices, calls for taking advantage of the next deadlines for the revision or lapse of existing systems, to clarify the objectives and revisit the tools of intervention in the electricity markets...

A public intervention that responds to issues specific to France

The French production system stands out within Europe by the weight and competitiveness of the historic nuclear fleet. Consequently, in the absence of public intervention, the opening up of the electricity market to competition on a European scale would result in the supply of French customers at price conditions likely to clearly exceed the costs production of the French fleet.

Intervention tools whose implementation no longer guarantees the achievement of objectives

To allow the development of competition on the retail market, the regulated sales tariffs (TRV), to which two-thirds of households still subscribe, are now established on the basis of supply costs representative of those of alternative suppliers (for opposition to incumbent suppliers, including EDF). The stability and competitiveness of these tariffs increasingly depend on the proper functioning of the regulations put in place on the wholesale markets (between producers and suppliers), and in particular on regulated access to historical nuclear power (ARENH). Since 2019, these tariffs have been increasingly affected by changes in wholesale market prices, at the risk of diverging significantly from the production costs of the French fleet. Thus, without the exceptional price shield measures put in place by the government in early 2022, regulated sales prices would have jumped by 35% including tax on February 1, 2022.

Regulated access to historic nuclear power (ARENH), which was supposed to allow alternative suppliers to obtain supplies under conditions equivalent to EDF's production costs, is found to be at fault, because its price could never be set at the level of these production costs. Its volume cap, linked to the temporary nature of the system, has not been adjusted to the progression of the market shares of alternative suppliers, thus leading to a "capping" of requests from these suppliers since 2019. Despite everything, it has allowed EDF to cover its accounting production costs over the period 2011-2021, even if this coverage is less and less ensured over the years.

The capacity mechanism put in place in 2016 to guarantee sufficient availability of the means of production during winter consumption peaks is the source of significant financial transfers between producers and consumers. It remunerates certain sectors, and in particular the nuclear fleet, in a way that is disproportionate with regard to the strict requirements of security of supply.

Overall, the Court observes that the combined implementation of these different tools results in an organization that is no longer legible or controllable, and that no longer guarantees the achievement of the initial objectives.

A public policy whose objectives must be clarified and the instruments revisited in the short term

In the short term, the Cour des Cours above all called for a review of the method of calculating the regulated sale tariffs in the event of a peak in ARENH's demands, in order to limit the exposure of these tariffs to sudden changes in the market price. In the medium term, given the still preponderant role of the nuclear fleet in the production of electricity in France, the public regulation of access to this production will remain a major issue beyond the term assigned to ARENH (i.e. end 2025). The Court thus calls on the public authorities to clarify, from 2022, the objectives that would be pursued within the framework of a new nuclear regulation, to determine the new modalities and guarantee its articulation with the other public policy mechanisms.