EdF has started the process of granting its competitors in France access to its electricity, a move that opens up the country’s commercial and domestic supply markets to competition.
The giant state owned utility announced that it has begun an invitation to tender process giving competitors access to 1500 MW – or around 10 TWh/year – of electricity over periods of up to 15 years. It follows a ruling by the French competition authority in December 2007 made in response to a complaint filed by Direct Energie.
EdF says that the initiative gives substance to its wish to promote competition in the market. It will hold three invitations to tender over the next two years, the first taking place in March 2008 for 500 MW.
Over the initial five-year period, from 2008 to 2012, EDF is offering an average baseload supply price of EUR42/MWh. The price will be set at EUR36.8/MWh for the first year, increasing progressively up to 2012. In the ensuing ten-year period, the price will be set to cover the development cost for EdF of the EPR reactor at Flamanville, that is EUR46/MWh in euros at 2005 values.
Following a complaint filed by Direct Energie in early 2007, the French competition authority ordered EdF to market baseload electricity in order to allow alternative suppliers to effectively compete in the retail sales market.
The quantity of electricity offered by EdF exceeds the free market’s current consumption and will allow alternative suppliers to increase their electricity sales volumes on the retail market fourfold.
In December 2005, Direct Energie signed a five-year electricity supply contract with EdF with price conditions such that the company was unable to market viable commercial products to small enterprises at levels competitive with EdF’s “EdF Pro” price range. The competition authority ruled that this situation could create a margin squeeze effect and therefore constituted an abuse of dominant market position by EdF.
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