That's irrelevant to electricity prices. Amazon made huge losses early in its history, but their unit costs were sound (ie they made money for every item they sold). Likewise, EDF makes money for every kWh they sell. Their debt is unrelated to their activity as an electricity producer.
> France has a price of 22c per kWh for consumers.
It's more like 20.5cts right now. A decade ago, it was 13cts [1], and EDF was profitable [2].
> despite the fact that wholesale prices in Germany have been drastically below that of France for at least a year now.
EDF doesn't usually need to buy power on markets. They produce what they sell. This year, exceptionally, they needed to buy for two reasons:
1) some of their reactors were down, which hurt a bit.
2) the French government forced EDF to buy an extra 20 TWh on the markets at the worst moment (market price > 200€/MWh), and sell back this power to its competitors at 46€/MWh [3].
Do you understand how some losses showed up now?
> The additional irony of that is that prices in Germany and other European countries shot up last year because of electricity deficit partially caused by France's nuclear plants going belly up.
Yeah, well, you could also say that the prices were low for the last 20 years because France consistently exported power when its neighbours needed it. Or that Germany's (and other European countries') reliance on gas for power generation contributed heavily to European electricity markets' exposure to Russian gas squeeze. I guess the narrative you subscribe to depends on what you want to believe.
> Our consumption is a lot lower than that, we are almost always around 1500kWh per year
4 kWh per day is pretty rad when it comes to optimizing power. Kudos for your efforts! I assume you have extremely recent appliances, considering an old fridge would be almost 1/4th of it. Would you have a breakdown of your electric uses and material age?
It's relevant because they are making less than what they spend. Amazon did not run its business on 40 year old power plants that were designed to run for just over 30 [1]. All things break down eventually, write-offs exist in business for a reason. The replacement was supposed to be Flamanville 3, but it turned into an embarrassment. How much will it cost to replace 50+ reactors? Do the math. The EDF is not Amazon, it's more like an Uber driver that runs a "profitable" business, that is suddenly out of work because it needs a new car. Cars break down after 200k? Who knew.
"Some" reactors were not down. Half of the fleet was down, and half of that entirely unplanned. Maybe they made a 20 billion hole because they couldn't fix the problem for months and had to fly in welders from the US? [2] ARENH exists for a decade now, and whether it's the right thing or not is for the sake of this discussion entirely irrelevant (I really don't have an opinion, you can argue either way). What's relevant is that it exists, and if you run a business you can't say "well, we only made a loss because of reality". If you are sane, you include that risk into the price and insure yourself of the risk. Once those 100TWh per year caps started getting maxed out a couple years ago it should've been a clear signal they will be in deep shit if something bad eventually happens. And their electricity output has been going down every year for years now to boot.
> Yeah, well, you could also say that the prices were low for the last 20 years because France consistently exported power when its neighbours needed it. Or that Germany's (and other European countries') reliance on gas for power generation contributed heavily to European electricity markets' exposure to Russian gas squeeze. I guess the narrative you subscribe to depends on what you want to believe.
Both of those things can be true, my point was that if you are creating a hole of 1-2 billion per month, you at some point need to plug the hole. Especially if what you're selling you don't have enough. Law of supply and demand? My electricity provider didn't jack up prices the moment the prices started going up, but eventually when it became clear they need to, they did. Same thing for my heating. Otherwise they would be bankrupt because they are not too big to fail. But this was a signal to consumers to be more conscious about how they spend electricity or energy in general.
As for my appliances, the only new one we have is a washing machine. The fridge we inherited from the previous tenants, so I don't really know, but 400kWh is quite a lot for a fridge these days. Even something like 250 would get a very low rating. I was thinking about a new one and you can even find some larger ones at 50kWh per year. It really doesn't take much of an effort. I guess the only thing "modern" households usually do that we don't is tumble drying, but every time I do do it, I mess some clothes up, so I don't like it anyway. I only use my laptop since a couple years, but more for convenience than for saving electricity by avoiding desktop machines.
First off, you seem to be making claims about the way EDF is run rather than the core discussion we were having, which was about production cost for nuclear power. I'm assuming, since you change topic, that my explanation about cheap legacy nuclear not being related to shady tax funding was clear.
That being said, a few notes on your other points:
> It's relevant because they are making less than what they spend.
It's not necessarily a big issue. A large expense item for 2022 was the work necessary to extend plants' life by 10 years. That is the reason for about 60% of the plants being down last summer. Sure, the timing was unfortunate, but the production loss was offset ahead of time, and the return on that investment should be extremely profitable.
> ARENH exists for a decade now, and whether it's the right thing or not is for the sake of this discussion entirely irrelevant
My link wasn't about the mechanism itself but about its surprise extension. There is a difference between knowing ahead of time that you need to provision 100tWh for your competitors, and learning overnight - at the same time as any market participant - that you need to provide an extra 20 tWh, on short notice, while market prices are already over the roof, while your own production is already sold. The cost to EDF of this one political decision was about €8bn [1].
EDF wasn't doing great before that, but it had a positive EBITDA, which should tell you that its core business is profitable.
> How much will it cost to replace 50+ reactors?
It is no big secret that EDF is under-capitalized. That's expected when your main shareholder raids your coffers [2] and uses you to buy and recapitalize its other companies [3]. As I said previously, the issue here is government decisions, not EDF's electricity pricing.
> you can even find some larger ones at 50kWh per year
That's low, 50kWh per year means the fridge draws 6 watts on average, that's less than a LED. I guess nothing prevents it theoretically, but I suspect that was calculated for a perpetually shut fridge. The numbers I find are around 100-200 kWh per year depending on the rating, more for one with a freezer.
Anyhow, that's interesting numbers. I guess I'll have to recheck my appliances (even though, since I heat on electricity, that's not my main draw).
It doesn't make much sense to say the company is making a profit, but it's only losing money because of maintenance and it will not be able to replace its current plants because it's undercapitalized. All those things are a part of running a business. The cost of electricity is not fuel plus operations, it's the funding for a plant, the maintenance, and once that's paid off the depreciation of the asset which will eventually need to be replaced. I don't understand why this is so difficult.
Also for the EDF being forced to buy Areva, I mean, you need to pick a side. Either you are a real business and you don't need to do that, or you are a state owned political tool. If it's a real business, will it go to a bank or issue bonds for hundreds of billions it will take to eventually replace the current plants? If not, then that investment in Areva will be very cheap when the time comes for the state to fund the new plants. Macron is talking about new ones for at least four years.
The "grand carénage" isn't maintenance, it's an investment to extend the lifetime by 10 years. Operations and maintenance are factored in electricity prices and aren't the reason these plants were shut down in 2022.
> I don't understand why this is so difficult. [...] I mean, you need to pick a side.
It feels like you're misinterpreting my position. My point is that 1) production costs are low and well reflected in consumer prices and 2) the business is viable.
It is completely unrelated to whether EDF is a private company or a state-owned company, whether the leadership and shareholders and are making sound decisions or whether the money made from current operations will be reinvested into new production facilities.
Whatever it is, it costs EDF money, and therefore it needs to be a part of the price. Also we were at this point previously so I can only repeat what I'd already said: almost a quarter of the total plants were out last year for unplanned maintenance, meaning they had cracks in the pipes and couldn't even run. This year started in a similar way: more unexpected problems, this will again cost money. I also posted a link to the president of the EDF at the time the plants were built. His quote: "the plants were designed to run for just over 30 years". So where are the replacements. And if they were starting to get built, who will pay for it? EDF is 65 billion in debt, Flamanville 3 cost 15 billion and is unfinished etc. etc. Does not sound viable to me. Can they go somewhere and borrow hundreds of billions for new plants? Here is an article from 2012, where it was already back then clear change is needed: https://www.reuters.com/article/uk-france-nuclear-watchdog-i... . But it never happened. My guess is there was no money for it.
I am not a free market zealot, but you cannot compare the final price to the one in Germany. The electricity market there contains hundreds of companies that all need to be profitable, or at least not lose money, or they will simply be removed from the market. The only exception I can think of are the four electricity distributors which have regional monopolies for obvious reasons. Even the made up number of 500 billion for renewables, even if true, would not mean it cost anybody anything other than what they paid for electricity - the renewables surcharge was always a part of the bill until it was removed. Every model has flaws, but at least here you always know what the true price is, and Scholz or Merkel or whoever doesn't go around making plans on how they will build nuclear plants, which Macron does all the time.
> I am not a free market zealot, but you cannot compare the final price to the one in Germany.
Well, I don't disagree with this. You were the one claiming that electricity is cheaper in Germany, and trying to find a way to compare the two. Germany's prices are taxed for future investments, while France's prices are calculed to amortize past investments. That's a significant accounting difference.
However, when you measure electricity costs, you have to understand which production systems create it. France's current power (and therefore prices) comes from nuclear system built in the 70's to 90's, which happened to be extremely cheap and reliable, and that is why we have cheap energy 40 years later.
I can't claim that the next generation of nuclear plants (or anything else, it's not obvious that France will have nuclear plants in 30 years at the current pace) will be as cheap, so we may have to pay more in the future.
> Whatever it is, it costs EDF money, and therefore it needs to be a part of the price.
I have no doubt these investments will be amortized in the next 10 years, and factored in French power bills.
> The electricity market there contains hundreds of companies that all need to be profitable, or at least not lose money, or they will simply be removed from the market.
No offense, but as a French person interested in the electricity industry, the German model isn't a great example. With the money poured in the Energiewende (and, I mean, good for them, they have enough money to waste it), the results are almost criminal. France doesn't have that money, so we can't afford quixotic, inefficient policies.
> Here is an article from 2012, where it was already back then clear change is needed
My guess is that after Hollande's election, no one wanted to build new nuclear (which they probably should have considering France's low interest rates) but no one had a good plan for an alternative energy source. Honestly, there's nothing good to say about France's electricity policy between 2007 and 2020.
> Scholz or Merkel or whoever doesn't go around making plans on how they will build nuclear plants, which Macron does all the time.
Well, yes. That's Macron. Be happy you only hear about his international policy lies.
No, I was replying to a person saying how Germany has expensive electricity (because Luddites, I guess opposing nuclear). It's not the case because it's an apples to oranges comparison, and I used France as a counter example for nuclear.
There's a lot of misinformation on the cost of the "Energiewende", I routinely see the same people throwing around numbers of 300 billion, 400 billion, 500 billion etc. 500 is the most common one, but it's baseless. I believe it was an estimate on what it might be in 2025 or something, but it has no relation to reality. In the end, whatever the correct amount may be, the result is not only not criminal, it is amazing. A whole new industry was kickstarted, that resulted in deployment of terawatts of renewables capacity worldwide to date. It almost singlehandedly killed deployment of new fossil fuel plants in many countries of the world and is now starting to retire existing fossil fuel plants. And it's still growing exponentially, we will realistically see 1TW per year deployment very soon. The IEA makes estimates on future deployment and it's a joke at this point because every year their updated estimates for 2030 are shattered. I cannot imagine a more successful policy if your goal is to decarbonize the world.
My point about Macron is not that his policies are wrong or that he is dishonest, I actually don't have a real problem with french nuclear, old or new. The point was that he is involved at all, and that's because the EDF cannot proceed without the government, it cannot really fund them on its own (hence, their prices are not real). You say they should've built new ones 10 years ago, but that's exactly my point. If they'd done that when they should've, the price now would not be 20c per kWh today, but a lot more than that. Now the price is "low" but at the cost of the infrastructure running on fumes.
> If they'd done that when they should've, the price now would not be 20c per kWh today, but a lot more than that.
Why? If we build new plants now, they will be amortized over their lifetime, not the very minute they're out of the gate or using existing plants. For that reason, it would take quite some time before prices shift significantly, even if we had started building 10 years ago.
> the result is not only not criminal, it is amazing.
Well, that's your opinion. My issue with Germany's current plan is that for renewables to effectively become the bulk of a country's production, there are many things that need to be done. Investments in transport infrastructure, in electrification, in storage, in research about how to handle all of those, etc.
But to date, most of the effort goes to the easiest problem (adding renewable production) and the other ones are a bit neglected.
The hands-off stance of Germany's leadership is a direct source of this problem: some planification is required to succeed in this task. As an example, how often have you heard about south Germany's north-south grid issues [1], and why was this not tackled at the very beginning of Germany's renewables push? Why did germany not restructure its 4 (!) TSOs when it started greening its energy?
I get that German HNers would tell me "It's political, things don't work like that in Germany". But the logical consequence is that tons of money have been spent in the wrong place.
Why? Because you can only amortize something if you can afford it. You are labeling a lot of things as one-off items, but the reality is that the EDF is already heavy in debt that it will take a long time to even pay that off, and eventually there will be a straw that breaks the camel's back. And the price of new plants is such that it's a very heavy straw.
Is it really my opinion, or are the things I mentioned actually facts? There was no renewables industry before the Energiewende, Germany implemented a transparent way to fund its creation and the whole thing blew up worldwide. As a consequence of that, a whole lot of co2 emissions in the world were not only removed but prevented entirely. I don't know why anyone would call this a failure.
The North-South issue is discussed frequently, maybe not so much in the mainstream (although I honestly wouldn't know), but e.g. I see it mentioned in social media among people reporting on or dealing with energy. One of the proposals that made sense to me is that Germany should no longer have a single market and a single price, but several regions. This would force states that are blocking development like Bavaria to finally put up or shut up, e.g. either build more or pay more. Regardless of that it's clear there needs to be more grid buildout, it's really not the case this is not discussed.
That you ask me why this issue wasn't solved initially is I guess not an unexpected viewpoint considering the differences in the way France and Germany work. France is more centrally planned whereas the states hold a lot of say on regulations in Germany. For the sake of this discussion it's not important which way is better, but it just is like this and it makes no sense to solve problems in a way they're otherwise never solved. Also in the end the same questions could be raised for nuclear plants: why were any built before e.g. there was a plan to store nuclear waste? We are over 60 years into their commercial use and only a handful of countries even have a plan on what to do with it. A lot of money was spent on temporary storages worldwide, it would've been a lot cheaper to first solve the problem completely. So I'd dare say it's anyway not possible to solve problems completely before you actually did anything, so renewables shouldn't be kept to a non-existing standard.
> Why? Because you can only amortize something if you can afford it.
Money can always be borrowed for a profitable investment.
> Regardless of that it's clear there needs to be more grid buildout, it's really not the case this is not discussed.
Yeah, that was my point. It's been known forever, and is only being tackled now. With proper planning, it would have been online for a while now. France is way lower in terms of renewables use, but we're already pumping investment in our TSO in order to open our options for future electric production and interconnections.
> Also in the end the same questions could be raised for nuclear plants: why were any built before e.g. there was a plan to store nuclear waste?
Work to determine how to store waste has started 30 years ago. That's the reason we have a solution on the way now. That's a good example of long-term planning.
> renewables shouldn't be kept to a non-existing standard.
My point isn't even about renewables, Germany is rich enough to live through that expense. My point is that a little planning would probably have resulted in funding split more evenly between the different issues. The problem Germany currently has is that by offering subventions without much plannings, most of the effort went in problems that could be solved easily, and optimized to extract subsidies. A French approach would have been to nationalize and merge the 4 TSOs. That would be unlikely for Germany. But a more balanced German attempt could have been to earmark a significant share of the subsidies to grid innovations and investments, whether it's batteries, new lines, interconnections, automated stability mechanisms, etc...
Sure it can be borrowed, but only if there's a realistic chance of it being paid back. If you are struggling now with "paid off" plants, try managing your debt when you have the same costs as today, plus debt for new plants. I think the math is pretty simple - you need to earn more to pay it off. Otherwise it would be a bit like saying "I just bought three new houses, but I don't need to earn more to pay it off". It won't work.
Renewables exist realistically for 20 years now, with a big expansion in the last 10. Nuclear exists for 60 years now, and still has no real long term storage solution, spending dozens or probably hundreds of billion worldwide on temporary storage. In the first case you say "wait until you figure everything out", in the second "the research is ongoing". I understand both approaches, as long as it's consistent, so either "plan and solve everything ahead", or "solve issues along the way".
> Nuclear exists for 60 years now, and still has no real long term storage solution
I can't do much in terms of discussion if you're not willing to accept the existing designs for subterranean storage as a long term solution.
> If you are struggling now with "paid off" plants
Besides the scare quotes, the previous plants were, indeed, paid off. That is the proof that they worked as an investment.
But, as with storage, you seem to be uninterested in how the company works, what the unit costs are, or where the debt comes from. It seems pointless to keep discussing the matter, as you're unwilling to listen.
> In the first case you say "wait until you figure everything out", in the second "the research is ongoing".
I have explained my position in the previous message. It's ok if you don't want to acknowledge it, but please don't put words in my mouth.
Also, storage research has been completed for about a decade now.
What is important is that not a single country had a solution when they started their programs. That is the point. You said it's been researched for 30 years now. But why is that ok when you insist that renewables should've figured out details like grid improvements before doing anything? Why is it ok to waste billions on temporary storage solutions for decades if it's not ok to invest in renewables before you improve the grid first. Both things can be viewed as wasteful, but you only have a problem with the second. It's nit-picky in the case of renewables and inconsistent. It's what you said, I am not putting anything in your mouth.
They are paid off, but if you are struggling with debt with those, you will not be able to finance anything new. Look at residents of South Carolina: their cancelled nuclear plant cost 9 billion, and they are now paying for non-existing electricity on their bills because the company needs to pay it off [1]. It's simple. Relevant quote:
"Thanks to a state law passed in 2007, residents in South Carolina are footing the bill for a massive failed nuclear reactor program that cost a total of $9 billion. Analysts say that corporate mismanagement and poor oversight means residents and their families will be paying for that failed energy program — which never produced a watt of energy — for the next 20 years or more."
That's irrelevant to electricity prices. Amazon made huge losses early in its history, but their unit costs were sound (ie they made money for every item they sold). Likewise, EDF makes money for every kWh they sell. Their debt is unrelated to their activity as an electricity producer.
> France has a price of 22c per kWh for consumers.
It's more like 20.5cts right now. A decade ago, it was 13cts [1], and EDF was profitable [2].
> despite the fact that wholesale prices in Germany have been drastically below that of France for at least a year now.
EDF doesn't usually need to buy power on markets. They produce what they sell. This year, exceptionally, they needed to buy for two reasons:
1) some of their reactors were down, which hurt a bit.
2) the French government forced EDF to buy an extra 20 TWh on the markets at the worst moment (market price > 200€/MWh), and sell back this power to its competitors at 46€/MWh [3].
Do you understand how some losses showed up now?
> The additional irony of that is that prices in Germany and other European countries shot up last year because of electricity deficit partially caused by France's nuclear plants going belly up.
Yeah, well, you could also say that the prices were low for the last 20 years because France consistently exported power when its neighbours needed it. Or that Germany's (and other European countries') reliance on gas for power generation contributed heavily to European electricity markets' exposure to Russian gas squeeze. I guess the narrative you subscribe to depends on what you want to believe.
> Our consumption is a lot lower than that, we are almost always around 1500kWh per year
4 kWh per day is pretty rad when it comes to optimizing power. Kudos for your efforts! I assume you have extremely recent appliances, considering an old fridge would be almost 1/4th of it. Would you have a breakdown of your electric uses and material age?
[1]: https://prix-elec.com/tarifs/evolution/2013 [2]: https://www.edf.fr/sites/default/files/uploads/2013edfgroupr... [3]: https://www.enerdata.net/publications/daily-energy-news/edf-...