EDF to trial auction of electricity contracts for 2027-2028

FILE PHOTO: The Tricastin nuclear power plant site in Saint-Paul-Trois-Chateaux

PARIS (Reuters) - EDF said it will this month trial a new wholesale model by auctioning electricity to be delivered in 2027 and 2028, as the French nuclear power giant seeks better visibility on revenues.

Last year, EDF's finances were hit hard when an unprecedented number of its reactors had to be taken offline for repairs and it had to buy electricity on the market at record high prices in the wake of Russia's invasion of Ukraine.

It also suffered as a result of a government decision to cap the increase in electricity prices to protect households from soaring inflation.

The group, which targets competitors like oil major TotalEnergies, gas company Engie and traders, expects to sell 100 megawatts (MW) of electricity for each contract through a series of daily auctions for a maximum of 5 MW starting from Sept. 18.

"It's a trial, so we start small, and when there'll be more demand we will put larger volumes on the market," Marc Benayoun, EDF's Senior Executive Vice-President in charge of customers and energy services, told reporters

Wholesale power markets in France currently allow the purchase of electricity for 2024 through 2026.

But EDF wants to promote the development of longer-term contracts which it says help stabilise prices and make them more competitive for final users.

The prices of the electricity contracts to be put at auction "should not be too different from what we have seen (on the market) in recent weeks... so a bit below 100 euros," Benayoun said.

(Reporting by Benjamin Mallet, writing by Silvia Aloisi, editing by Alexander Smith)