Paris, April 19. 2012
The AFIEG (French Independent Association of Electricity and Gas) is pleased by the position taken by the Autorité de la Concurrence (Competition Regulation Authority) on the prospective capacity mechanism. The Authority’s analysis is balanced and legitimate in highlighting the lack of fair competitive conditions in the French electricity sector.
AFIEG shares most of the Authority’s conclusions, notably concerning:
– The risk of a continuous weakening of competitive conditions on the French electricity market.
– The financing of the transitory call for tender, which should not affect new alternative suppliers.
– The need for clear information from EDF concerning internal transfer prices, which should be conveyed to the CRE.
– The prospective need of splitting, at least from an accounting perspective, EDF’s production and supply activities.
AFIEG is pleased by the Authority’s warnings concerning the increasing price squeeze, which is due to the fact that regulated prices will not be based on costs addition until December 31. 2015 (comprising the ARENH and an electricity supply complement including the capacity guarantee), while the capacity mechanism will affect suppliers as soon as 2013. Moreover, there is a need to avoid any double remuneration for production assets benefiting from a purchase obligation.
AFIEG also agrees with the Authority’s conclusion concerning NOME Act’s implementation, which notably states that “the ARENH doesn’t have the same impact on EDF and on alternative suppliers”, therefore advocating for an open access to baseload and peakload production assets in addition to the ARENH.
AFIEG is also in line with the Authority’s recommendation concerning the inclusion of pro-competition criteria in the reallocation process for French hydroelectric concessions. AFIEG also notes that the vast majority of concessions that will be part of the coming call for tender are peakload hydropower plants, while the question of how to share baseload hydropower assets remains unanswered.
AFIEG therefore asks the government to take the Authority’s recommendations into account, without overlooking the essential factors in favor of a competitive French energy market benefiting final consumers.