EDF develops more nuclear power contracts for energy-intensive industry

French state-owned company EDF is continuing talks with industrial companies about options for long-term contracts for nuclear power. The company currently has to sell a relatively large share of its nuclear generation to competing suppliers at a fixed price. However, this mechanism, known as ARENH, is due to end at the end of next year. Direct long-term contracts for supplying nuclear power to industry could therefore partly replace it.

EDF recently concluded five letters of intent for long-term contracts with energy-intensive industries, according to Argus. The contracts have a combined volume of more than 10 TWh per year and will run for at least 10 years.

By April this year, the company had concluded a total of three letters of intent for long-term nuclear contracts with various companies, according to the news outlet. The counterparties included steelmaker ArcelorMittal and GravitHy, which plans to produce low-emissions, sustainable iron and steel.

“We are still far from the maximum (24TWh) we were aiming for, but in the context of low prices, some players prefer medium-term contracts,” EDF Executive Vice President Marc Benayoun said at a recent conference.

French long-term contracts for nuclear power, known as CAPN, are designed for energy-intensive industries. In this case, however, eligibility is determined not by companies’ electricity consumption, but by the size of their energy costs relative to their revenues.

According to Argus, state-owned rail operator SNCF, for example, is not eligible for these contracts, even though it consumes around 9 TWh of electricity a year. The operator’s chief operating officer nevertheless told the news outlet that the company is negotiating with EDF about a possible expansion of the CAPN contracts.