French minister says EDF must justify power production costs

• 11 years ago (2013-02-23)
• David Flin

Europe 1061 Nuclear 640

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Electricité de France (EDF), the world’s biggest nuclear reactor operator, must justify its costs of power production and sales before the French government makes a decision on raising prices, according the Delphine Batho, the French Energy Minister. Batho said: “There is a principle that prices must cover costs, so we have to know what is behind the prices. There is a need for transparency. I have asked the regulator for an audit of production and sales costs.”

EDF has sought higher electricity prices from the government to help finance investments and to cover its expenses. While the regulator has pushed for an increase of almost 30 per cent in tariffs over five years, President Francois Hollande has pledged to contain household energy bills and drive an expansion in renewable power generation.

EDF is also required to sell nuclear power to competitors at a regulated rate. That tariff does not reflect generation costs or allow the utility to fund investment needs, Henry Proglio Chief Executive Officer for EDF said.

Batho met with Proglio, and acknowledged a “structural trend” toward higher oil and electricity prices, and said: “Something must be done.”

Hollande has promised to reduce France’s dependence on nuclear power, and decided in September that EDF’s oldest reactor at Fessenheim must shut in 2016. While Batho did not exclude the possibility of more reactors closing down permanently, she said that France must keep a “portion of nuclear” in the energy mix and invest in aging reactors.