nuclear-news

The Impact of COVID-19 on Nuclear Electricity Sales Contracts in France,

The first two weeks of confinement led to a reduction in electricity consumption in France of around 15 to 20% compared to the consumption usually observed at the same year period under equivalent weather conditions[1]. Such a variation in electricity consumption over such a short period of time is unprecedented, the most recent significant drop in demand having been observed during the economic crisis of 2008-2009, when, in contrast, the contraction in demand spread over the long term, reaching a maximum of -5% from one year to the next.

Concomitantly, electricity prices on the wholesale markets dropped from EUR50-55/Mwh at the beginning of 2020 to around EUR20/Mwh at the end of March.

This distressed economic situation highly impacted the so-called “alternative” electricity suppliers in France, i.e., suppliers other than the incumbent operator, EDF, which entered the retail electricity market in France as a result of its opening up to competition. Several of these suppliers declared force majeure under the contracts entered into with EDF for buying nuclear electricity at a price which became too high compared to the wholesale market price. Several decisions have already been rendered on this issue by the French energy market regulator – Commission de regulation de l’énergie or “CRE”, the Conseil d’Etat (the highest administrative court on administrative matters) and the Commercial Court of Paris, but the legal battle is only just beginning and, given the amounts at stake, we can expect it will be long and bitter……… https://www.jdsupra.com/legalnews/the-impact-of-covid-19-on-nuclear-52378/