French EdF develops more nuclear supply contracts

French state-owned utility EdF has signed five letters of intent for long-term nuclear supply contracts for power-intensive industries, EdF executive director Marc Benayoun said at the Europ'Energies conference in Paris today.

The five nuclear power supply contracts represent over 10 TWh/yr of consumption and will last for at least 10 years. Payment will be upfront. "We are still far from the [24TWh] maximum that we were aiming for but, in a context of low prices, some actors prefer medium-term contracts", Benayoun said. The utility had signed three letters of intent for nuclear power supply contracts as of April, including one with steel manufacturer Arcellor Mittal and another with green iron consortium GravitHy.

French nuclear power supply contracts — or CAPNs — are designed for power-intensive industries, defined by the share of energy expenses in their revenue. French state-owned rail company SNCF consumes an average of 9 TWh/yr of power so does not fall under the power-intensive category, making it ineligible for a CAPN. Discussions on widening the scope of CAPNs have been ongoing with EdF, SNCF operations director Khadidja Haned Bouaddou told Argus.

Nuclear supply contracts will partly replace France's Arenh scheme, under which EdF is obliged to sell nuclear power at a fixed price to competitors. The Arenh mechanism is due to expire at the end of next year. The French state reached a deal with EdF at the end of last year that sets a price for nuclear power sales, but the agreement has not yet become law. The prices of the contracts could be renegotiated, French economy minister Bruno Le Maire said recently. France's current parliamentary elections add further uncertainty to the future of the mechanism.

EdF has concluded 2,000 contracts for around 40TWh, or 11.7 TWh/yr, of power over 4-5 years, with the power coming not only from its nuclear fleet. This compares with the 20TWh of power that the utility had sold as of the beginning of April.

In parallel, the utility is conducting pay-as-clear auctions for delivery in 2028-29, offering 1-5MW. But the auction has not cleared, as prices have decreased and bids received by EdF were below its reserve price, Benayoun said. Power-intensive industries union Uniden president Nicolas de Warren welcomed the initiative of the auctions and said they represent a complementary source of supply.

By Tatiana Serova