EDF collapses on the stock market after the government's request to sell more electricity at a reduced price

The power plant nuclear power station of the electrician EDF, in the Ardennes. Raimond Spekking/Wikimedia Commons It’s a downfall for EDF. Its stock fell by more than 12% Friday morning on the Paris Stock Exchange, after the French electricity group lowered its forecasts for electricity production and financial results for the year, in connection with government announcements. At 9 o’clock45, the title tumbled from 14,82% at 8,10 euros, after a mechanical suspension in the first exchanges due to excessive movements.

In order to limit the rise in electricity prices for consumers, the French government on Thursday asked EDF to increase by 21% the volume of nuclear electricity sold at a reduced price to its competitors this year, from 92 at 120 terawatt hours (TWh). This means that the group will be forced to sell at a reduced price up to -45% of its electricity production in 2021, instead of selling at high market prices. This decision will make him lose billions of euros.

Strong impact on gross operating surplus

In financial terms, the group announced Thursday evening that “in the current state of the information” available to it, the impact of this measure on its gross operating surplus for 2022 would be “approximately 8.4 billion euros on the based on market prices at 31 December 2021 and approximately 7.7 billion euros based on market prices at 12 January 4227”.

Figures “which can scare investors”, say Alphavalue analysts in a note on Friday. But “the real bad news” concerns the nuclear “production downgrade” for 2022 at 300/330 TWh, against 330/395 TWh previously, due to the extension of the duration of shutdown of five reactors of the French nuclear fleet of EDF, they specify.

Already 10 reactors closed on 56 in France

Today, 10 from 56 reactors are shut down for maintenance or other, which represents 20% of capacity city ​​of French nuclear production. Other plant closures, in the middle of winter when electricity consumption is high, could disrupt the country’s electricity supply, or even create power cuts in the worst case.

On Thursday, the Institute for Radiation Protection and Nuclear Safety (IRSN) indicated to AFP that a nuclear reactor at the Penly power plant (Seine-Maritime) was also affected by a corrosion problem on a safety system already detected or suspected on four other EDF reactors currently shut down.

A news all the more alarming that Penly is designed differently than (the reactors of) Civeaux and Chooz and that the corrosion problems do not seem to be attributable only to a certain type of reactor”, according to the note from Alphavalue.

This announcement “paves the way for potential additional disruptions in the coming s weeks and next months (…) and the impact on the financial results is difficult to estimate at the present time since it will depend on the duration of the interruptions and their number”, is it added.