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By Bate Felix
PARIS, Nov 29 (Reuters) - French power suppliers have requested 147 terawatt hours (TWh) of utility EDF’s nuclear power generation for 2020 through the ARENH auction window, the energy market regulator CRE said on Friday, the strongest demand to date.
Under the so-called ARENH mechanism, set up in 2011, EDF’s rivals have the right to buy up to 100 TWh, or about a quarter of its annual nuclear output, at a fixed price of 42 euros ($46.29) per megawatt hour (MWh).
The strong demand signals a likely increase in French retail power prices next year because the suppliers will have to buy from the wholesale market to meet the needs of their clients.
EDF, which operates France’s 58 nuclear reactors, cut the target output for French nuclear generation in 2019 to between 384 TWh and 388 TWh from 390 TWh on Nov. 14 due to extended outages of its reactors.
The regulator said it will publish an analysis looking at the consequences of the strong demand above the 100 TWh ceiling.
In 2018, suppliers requested 133 TWh of French nuclear power through the ARENH scheme, contributing to a more than 6% rise in French retail power prices this year.
The CRE said that because demand was higher than the 100 TWh ceiling, the 73 suppliers who placed a bid will each receive around 68 percent of the amount they requested.
The scheme, which was approved by European competition authorities following the liberalisation of the French power market, has come under increasing criticism from both suppliers, who want the ceiling raised, and EDF, which argues that the fixed price of 42 euros/MWh is too low.
France’s baseload power price for year-ahead delivery has averaged 49.2 euros/MWh this year, down from an average of 54.8 euros/MWh last year.
The French government is in talks with the European Commission to reform the system and the French energy market.
The energy market regulator in the statement on Friday, renewed its call for an increase the ARENH volume cap, saying it was no longer in line with the current situation in the French electricity market.
Power providers in the French market include energy giant Total, gas and power utility Engie and Italy’s Eni, along with dozens of smaller players.
$1 = 0.9073 euros Reporting by Bate Felix; Editing by Maya Nikolaeva, Kirsten Donovan