EDF sues French state over price cap, claims it has to sell at loss

EDF, a French nuclear company, is suing its own government for €8.3 billion 7 billion after it was forced to sell energy to consumers at a loss.

The company, which is being nationalised by the French state, has filed a compensation claim over the extension of the country's price cap in January.

EDF was forced by Emmanuel Macron to sell more power to rivals at prices less than market rates as officials tried to tackle the cost of living and support households.

The energy company has to sell electricity to rivals at a heavy discount as a counterbalance to its monopoly position. French officials increased the cap on the discount by a fifth in January, hitting its finances.

EDF said the move meant it had to sell energy at a loss. The claim, filed in the French administrative supreme court, the Conseil d Etat, said losses totalled €8.3 bn, meaning that the measure could cost the company more than €15 bn over the year.

The nuclear energy giant had previously estimated that the administrative changes could cost between €7.7 bn and €8.4 bn. It posted its largest ever half-year loss last month, up €5.3 bn, compared with a year ago's profit of €4.2 bn.

EDF is owned by the French government and last month officials revealed plans to buy the remaining 16% for €12 a share, which is an estimated total of €9.7 bn.

The government hopes that nationalising the debt-laden company will help secure energy supplies in the country after the war in Ukraine left countries looking for new sources of power to replace Russian imports.

An association of EDF employee shareholders said last month it plans to sue the French state over its nationalisation plans, arguing that the decision is against the interests of the company and minority shareholders.

EDF, which is developing the Hinkley Point C nuclear power station in Somerset, is already dealing with problems with its nuclear plants in France.

The power stations provide over 70% of France's electricity but this is expected to hit a three-decade low this year due to a string of technical and maintenance issues.

EDF said last week it was temporarily reducing output at its nuclear power stations in the Rh ne and Garonne rivers because of the heatwave sweeping Europe, which has led to problems with the company's ability to use river water to cool the plants.

On Monday, France's nuclear power regulator extended temporary waivers allowing five of the company's power stations to continue discharging hot water into rivers.

EDF shut the Hinkley Point B power station in Somerset after 46 years of operation this month. The Hinkley Point C development has been delayed and is over-budget, while the company plans to develop a sister power station at Sizewell C in Suffolk received planning approval last month.