Home » Economy » Soaring electricity prices: French factories fear shutdowns in early 2022

Soaring electricity prices: French factories fear shutdowns in early 2022

Energy prices are rising, and all sectors are affected. Some manufacturers fear production cuts or plant shutdowns in France at the start of 2022, due to the surge in energy prices and the low allocation of electricity at guaranteed prices that they received from the regulation system. Arenh Wednesday.

The mechanism called Arenh (for “regulated access to historic nuclear electricity”) has since 2011 allowed alternative suppliers and so-called “electro-intensive” industrialists to purchase EDF nuclear electricity at a fixed and rather modest price. , 42 euros per MWh.

This price, based on nuclear production costs in France, is very advantageous compared to electricity prices on the spot market, which has fluctuated between 200 and 300 euros per MWh in recent weeks, and even by compared to the 2022 futures market (the one on which manufacturers obtain supplies when they can no longer benefit from regulated prices) which listed 170 euros per MWh on Thursday.

“The worst price conditions there is”

On Wednesday evening, large electricity consumers, alternative and industrial suppliers, learned that they would receive only 62.37% of their demand for cheap electricity in 2022, the available ceiling of Arenh set at 100 TWh n ‘not having been identified by the government. Their requests were for 160.36 TWh for the year.

“This is the highest rate of cut-off ever known” noted the Union of industries using electricity (Uniden), in which we find in particular steelmakers, chemists or producers of fertilizers, large users of electricity.

“Concretely, this means that the electro-intensive manufacturers located in France will have to complete a significant part of their supply on the market in the coming days under the worst price conditions” underlines Uniden in a press release. “A certain number of sites are therefore planning to adapt their production accordingly, until the complete shutdown for certain profiles” affirms Uniden.

Factory production drops

Several of them have already made production cuts in recent weeks, such as the Nyrstar zinc plant in Auby (North), the electric steel plant of LME Beltrame near Valenciennes (North), the electrolysis of chlorine at Kem. One in Fos-sur-mer. Not to mention Ascoval, which produces carbon-free steel, came close to relocating part of its production to Germany, where steel, produced from coal, costs less than in France, while it emits a lot of CO2.

The alternative electricity suppliers had asked the State to raise this year the ceiling of the Arenh to 150 TWh this year, but the government did not follow up “officially, because the European Commission would have opposed it. », Notes an industrialist. “Faced with the gravity of the situation, and for a temporary period, this is an obstacle that could have been lifted” considers this industrialist.

Initially, the Arenh system was created and accepted by the European Commission to allow alternative electricity suppliers to access nuclear electricity at low prices, and therefore to create competition for EDF in France.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.