EDF sues French government for €8.4bn

According to the nuclear giant, the price cap could be a huge cost for it over the next year.

EDF sued the French government for EUR8.3bn. (£7bn). This lawsuit was initiated after Emmanuel Macron made it impossible for the nuclear giant to sell its energy at a profit.

The company filed a claim for compensation with the Conseil D’Etat, France’s administrative supreme court, regarding “losses incurred” due to a January price cap extension.

Paris ordered EDF (currently 84pc state-owned) to sell more power to French competitors at below market prices to help support households and businesses in the face of rising energy costs.

EDF, which is currently in the process of being fully nationalized by the French state said that the EUR8.3bn figure reflected losses, “estimated so far”, suggesting that the price cap could have a cost of EUR15bn for the entire year.

EDF had estimated that the changes would run it EUR7.7bn to EUR8.4bn at their initial announcement and stated that it would consider any measure to protect its interests.

To balance EDF’s monopoly position, competitors could buy 100TWh of EDF electricity at a heavily discounted price before the measure was passed. The Elysee ordered the cap to be raised by a fifth in January.

EDF reported its biggest ever half-year loss last month of EUR5.3bn. This compares to EUR4.2bn profit a year ago.

The company is also struggling with outages, in addition to the price cap. It has had to close half of its nuclear fleet for repairs and maintenance, costing it EUR24bn. EDF relies on river water to cool its reactors due to heat waves. The French government has lifted environmental restrictions related to river water use to allow reactors to stay online.

EDF’s nuclear power was responsible for 69pc last year of France’s electricity generation, but it is expected that it will fall to a three-decade high this year.

Macron will nationalize the debt-laden utility by purchasing the 16pc it doesn’t already own. As it seeks to boost supplies in the face of an energy crisis, the government offered EUR12 per share for an estimated EUR9.7bn.

EDF in the UK operates Hinkley Point B, Somerset. It closed at the beginning of the month after 46 years.

Hinkley Point C will replace it. It has been delayed and is not expected online until June 2027.

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