EDF / 2018 Reference document

FINANCIAL STATEMENTS Notes to the financial statements

ARENH 3.8 ARENH applications for 2018 deliveries totalled €96.3TWh: 87.1TWh for supplies to final customers and 9.2TWh to compensate network operators for network losses. These applications were made at a time when the ARENH price (which includes a capacity guarantee in its €42/MWh) was competitive in comparison to forward baseload prices for 2018 (from early September 2017). For the ARENH applications of November 2018, total demand from alternative suppliers was above the legal maximum, at 132.98TWh excluding EDF subsidiaries, and EDF will deliver the maximum ARENH volume of 100TWh for supply to competitors’ final customers in 2019. Subscriptions to cover network losses amounted to 20.4TWh.

In a decision no. 2018-222 of 25 October 2018, as required by the Energy Code the CRE set out the method for allocating ARENH volumes when applications exceed the legal maximum. This decision stipulated that if the ARENH was oversubscribed in November 2018, curtailment would only apply to new ARENH applications made in that session, and that EDF-controlled subsidiaries’ excess applications would be fully curtailed (this does not apply to distributors). Finally, it stated that EDF-controlled subsidiaries could enter into contracts with the parent company replicating the ARENH system and the terms of supply, particularly the curtailment rate for alternative suppliers. This curtailment mechanism, when applied, makes reference to market prices more influential in determining regulated sales tariffs, and all other things being equal, also increases the price of the energy component.

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EDF I Reference Document 2018