The organization of the French market post‑ARENH is becoming clearer

On Thursday 16 January 2020, the government unveiled the main guidelines that it intends to submit for consultation to market players for the implementation of the system that will succeed the ARENH.

This scheme, whose implementation will have for corollary the reorganization of EDF activities, should force EDF to sell the totality of its nuclear production on the wholesale markets. In order to guarantee the producer a level of income that covers its costs and to protect consumers, the government intends to set up an annual price tunnel, which could be €6/MWh wide, around a reference price based on market prices.

The public consultation, carried out under the aegis of CRE, should be closed at the end of the first quarter of 2020. The government subsequently reserves the right to implement this new system without waiting for the termination date of the ARENH mechanism (31 December 2025). However, given the consultation required with the European Commission to obtain approval for this new system, implementation before 2022 does not seem realistic.

Regarding the evolution of ARENH price and volume for the year 2021, no modification is thus to be envisaged compared to 2020, as the government does not wish to hold two discussions in parallel with the European Commission.