Return to sender. Energy files, passed under the control of Bercy during the last reshufflein January, are returning to the Ministry of Ecological Transition, within a portfolio that also includes Climate and Risk Prevention. And a well-known – and appreciated – figure in the sector will take them over: Agnès Pannier-Runacher, already in charge of the Energy Transition between 2022 and the beginning of 2024, succeeds Christophe Béchu at the Hôtel de Roquelaure.
To untangle the thorny issues that await her, she will be accompanied by Olga Givernet, engineer and Renaissance MP for Ain, the new Secretary of State for Energy. Both will be tasked with ensuring that energy prices do not weigh down household bills or the competitiveness of businesses. They will also have to look to the longer term and ensure that France’s energy policy meets the needs of a country in the midst of electrification. L’Express reviews three priority issues, which the duo will have to tackle very quickly.
The “EDF tax”
By leaving, the outgoing government has allowed itself to leave a major, potentially explosive issue on the table. Bruno Le Maire’s proposal, made before the Finance Committee during its final hearing on September 9, provides for the implementation of a new tax on “installed electrical power”. In other words: a tax on the income of energy companies, in a context of budgetary restrictions. Concretely, the project aims to make all production plants exceeding 260 megawatts contribute. This threshold therefore excludes wind and photovoltaic farms, and would primarily concern EDF’s nuclear reactors and hydroelectric plants – as well as a handful of Engie and TotalEnergies assets. This new tax, which many are already calling the “EDF tax”, would be a way of reversing the failure of the “inframarginal income contribution”. A mechanism that was supposed to capture the superprofits of the electricians, but which only brought in 300 million euros last year out of the 3 billion expected.
Could Bruno le Maire have had worse timing? Three days before his speech, a harsh report from the Court of Auditors called on the authorities to thoroughly review the tax policy on energy, which was deemed poorly distributed and poorly optimized. Unsurprisingly, energy companies were not very fond of the minister’s final bouquet. “It’s a hot topic,” comments Phuc-Vinh Nguyen, researcher and specialist in energy policies at the Jacques Delors Institute. “We haven’t thought about the consequences of these savings in the medium and long term. This risks weighing on EDF’s investment capacity and sends a counterproductive message on the electrification of uses.” With this measure, the administration hopes to recover 2 billion euros this year, according to The Echoes. But the electricity company, still busy mopping up its catastrophic results for 2022, must also double its investments to meet the challenges of new nuclear power. “It is indeed a bad idea to deprive EDF of financial resources. During the first five-year term of the current president, there was talk of reducing production taxes, and now they want to increase them,” laments Jean-Jacques Nieuviaert, president of the Energy Studies and Prospective Society. “The State has a somewhat schizophrenic attitude towards EDF: it wants to protect and tax at the same time,” notes Boris Solier, lecturer in economics at the University of Montpellier. “We have rarely seen a proposal have such unanimity against it,” confirms Phuc-Vinh Nguyen. It will be all the more difficult to get this new tax accepted because it risks increasing household electricity bills, which will absorb the extra cost. The last episode of this kind is not a good memory for the government. It was on fuel, and “then there were the yellow vests,” recalls Boris Solier.
Post-Arenh electricity
This is another hot topic of the new school year. Will the State go back on the agreement between EDF and industrialists who are heavy consumers of electricity? Currently, the latter benefit from a preferential rate for access to nuclear electricity (Arenh). But this system is due to end in 2025. To address the concerns of “electro-intensive” industrialists and to provide them with visibility on their future costs, the State therefore reached an agreement with EDF last November to guarantee them an average price of 70 euros per MWh for the production of nuclear-generated electricity over a period of 15 years. It is based on two principles: long-term contracts and a mechanism that provides for the capture of EDF’s revenues if the market takes off. However, this framework, obtained after intense negotiations, is increasingly being attacked by industrialists, who consider the price too high and fear for their competitiveness. Bruno Le Maire himself took up the issue and negotiations were reopened.
The discussions have been dragging on for almost a year. In July, a Senate inquiry committee on the future cost of electricity came to further weaken the agreement. After six months of work and more than 140 hearings, the (centrist) senator from Essonne, Vincent Delahaye, called for the use of another regulatory tool, not retained by the State: the contract for difference. A mechanism through which “EDF will sell its electricity at a fixed price, with a principle: if its revenues are lower than expected, the State will reimburse the difference; and if its revenues are higher, the State can benefit from the price increase before redistributing it”, explained Nicolas Meilhan, one of the experts interviewed, to L’Express.
At the end of August, Luc Benoit-Cattin, the co-president of the Medef energy commission, warned of the urgency of “stabilizing the contours of the new regulatory framework” and asked the State to take up the issue to find solutions. Will it be able to do so? “Since the government’s lifespan is short, I don’t know how much useful time it is able to devote to these negotiations,” doubts Phuc-Vinh Nguyen. “Whereas we could have resolved this issue even before Covid-19 and the energy crisis,” deplores Boris Solier.
Strategic plans
It was a matter of days. The government should have opened public consultations in mid-July on two essential – and highly anticipated – texts of France’s climate strategy: the PPE, the country’s energy roadmap, and the SNBC, its plan to reduce carbon emissions. But the dissolution has come to disrupt a machine that was already lagging behind. “We need a clear direction,” warns Anne Bringault, director of programs at the Climate Action Network (RAC). These files will logically occupy an important place on the new minister’s desk. “Everything is ready, all we have to do now is press the button. We would not understand why there would be a delay between his appointment and the launch of the consultation,” continues the expert.
While the European Commission has just called France to order to respect its commitment to reach 42.5% of renewable energies in its energy mix by 2030, the PPE must set the State’s priorities for each sector. “On offshore wind, it is extremely urgent. The objectives are ambitious and the uncertainty jeopardizes them. If we want to meet them, we must launch investments, open factories…”, urges Anne Bringault. “The stop-and-go are detrimental to our long-term industries,” warned several federations and professional associations in the sector in mid-summer. They must also face competition from other European countries, which have set themselves similar objectives and horizons.
On nuclear power too, the future is unclear. “Apart from the presidential word, there is no commitment set in stone. Even if the subject is moving forward, officially, EDF has no public order for reactors. And therefore no identified financing mechanism”, recalls Boris Solier. Annoying, while a new public debate has just started in Gravelines (North) for two more EPRs. The National Commission for Public Debate (CNDP), which is organizing its smooth running, has also reminded the State of its obligations regarding the publication of these roadmaps. In a notice published early Septemberafter an initial consultation for new reactors in Penly (Seine-Maritime), the institution – created in 1995 by a certain… Michel Barnier – noted that the “questions on the energy future of France have not been answered”. “Without a global vision, we are blind. It is therefore difficult to give an opinion on such projects”, believes Anne Bringault.
The only positive point: the previous government had – finally – sent its National Integrated Energy-Climate Plan (Pniec) to the European Commission on July 10, just three days after the second round of the legislative elections. For the rest, the French strategy has serious holes in its racket.
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