It can only get financed by banks or "normal" commercial equity with a full public guarantee. Strategic equity (like EDF, which is semi-public anyway) can take some risk construction budgets and delays, but they still need government underpinning of revenues, and insurance for catastrophic risk - and in case of serious cost overruns they are likely to negotiate again anyway.
If ARENH only benefits a few intermediaries, why did the French government increase the amount of electricity sold under the regulation to 120TWh once the energy crisis started? I do not think that this is really the case. The EDF sued the government last year over this and it was widely reported the government did it to keep the prices in check.
Also I don't think that France wants to subsidize plants to steal German industry, it wants to do it so it can have functioning plants and EDF cannot pay on its own. But the issue is real because the price of building and maintaining plants should be in the price of electricity. If the government covers those instead, then the low price on the bill is just artificial. Otherwise it's like an Uber driver happy with his income, but 10 years later it's time for a new car which he can't afford. Turns out the price was too low. But I think in this case if it ever comes to this Germany will just subsidize its own electricity for the industry so it doesn't matter that much.
On the first point, I think the increase in ARENH volumes was driven by a desire to avoid the abrupt failure of some of the retailers, who depended on wholesale purchases and could have been bankrupted by the massive price increases (when most of their consumers were on price formulas that would not move so quickly or abruptly). This is dealt with in the new EU package by authorizing a distributor of last resort, which can take over the portfolio of such distributors.
On the second point, what i means is that economically it is identical to support EDF revenues by providing a CfD or by beefing up the regulated tariff. The underlying industrial reality is that consumers need to pay for the cost of producing the electricity. The Grand Carénage has a price which is competitive enough (whether it's 50 or 80 EUR/MWh) and compatible with current retail prices. If that was not the case, whatever price formula used would not make a difference: electricity prices would need to increase.
Interesting that you think no new nukes will attract finance (I agree). So from a UK perspective (how) do you think Sizewell C will get financed?
It can only get financed by banks or "normal" commercial equity with a full public guarantee. Strategic equity (like EDF, which is semi-public anyway) can take some risk construction budgets and delays, but they still need government underpinning of revenues, and insurance for catastrophic risk - and in case of serious cost overruns they are likely to negotiate again anyway.
If ARENH only benefits a few intermediaries, why did the French government increase the amount of electricity sold under the regulation to 120TWh once the energy crisis started? I do not think that this is really the case. The EDF sued the government last year over this and it was widely reported the government did it to keep the prices in check.
Also I don't think that France wants to subsidize plants to steal German industry, it wants to do it so it can have functioning plants and EDF cannot pay on its own. But the issue is real because the price of building and maintaining plants should be in the price of electricity. If the government covers those instead, then the low price on the bill is just artificial. Otherwise it's like an Uber driver happy with his income, but 10 years later it's time for a new car which he can't afford. Turns out the price was too low. But I think in this case if it ever comes to this Germany will just subsidize its own electricity for the industry so it doesn't matter that much.
On the first point, I think the increase in ARENH volumes was driven by a desire to avoid the abrupt failure of some of the retailers, who depended on wholesale purchases and could have been bankrupted by the massive price increases (when most of their consumers were on price formulas that would not move so quickly or abruptly). This is dealt with in the new EU package by authorizing a distributor of last resort, which can take over the portfolio of such distributors.
On the second point, what i means is that economically it is identical to support EDF revenues by providing a CfD or by beefing up the regulated tariff. The underlying industrial reality is that consumers need to pay for the cost of producing the electricity. The Grand Carénage has a price which is competitive enough (whether it's 50 or 80 EUR/MWh) and compatible with current retail prices. If that was not the case, whatever price formula used would not make a difference: electricity prices would need to increase.