IERN International Energy Regulation Network

The sector is partially privatised. The state retains majority shareholding in the former monopoly public utility Electricité de France (EDF).

The sector is highly concentrated. EDF is still dominant and is responsible for 86% of national electricity generation. The other main French generators are:

• Electrabel-Suez, which uses the hydro-electric plants of the CNR (Compagnie Nationale du Rhône), of the Société hydroélectrique du midi (SHEM) and holds a share of the nuclear powerplants of EDF Tricastin and Chooz. Its share in overall French electricity generation was 3% in 2006;
• Endesa, which generates electricity in the coal plants of Endesa France. Its share in overall French electricity generation was 1,5 % in 2006;
• Total, which owns the biggest cogeneration plant in France. Its share in overall French electricity generation was 0,3 % in 2006;
• Gaz de France, which owns a combined-cycle gas-fired power plant. Its share in overall French electricity generation was 0,3 % in 2006.

With an export balance of 63,3 TWh in 2006, corresponding to 12 % of total generation, France is the biggest electricity exporter in Europe.

In 2006, the net trade balance with all interconnected countries except Germany was positive. For the last 5 years, the most significant developments have taken place at the Italian border: Exports have declined and imports have taken place at peak periods during the first quarter of 2006 and occasionally in July 2006. Exports to Spain and Belgium have also decreased, but less significantly. With Germany, the net trade balance was negative in 2006. After increases between 2002 and 2005, imports from Germany have decreased in 2006.

The majority of spot transactions in France are carried out on the organised market Powernext. Conversely, futures are mostly traded over the counter.

Activity at Powernext Spot is increasing, variations are largely seasonal. Total trade volume in 2006 has increased by more than 50% compared to 2005.

Activity at Powernext Futures has been on the rise until 2006, when a strong decline set in. This slump in liquidity is linked with the decrease in activity on the entire French wholesale market. However, total trading volume at Powernext Futures has increased by more than 33% in 2006 compared to 2005.

The German energy stock exchange EEX has launched an organised market for the exchange of futures for delivery to France in 2005. After an initial phase marked by increasing volumes, there has been no activity at all at EEX France since August 2006.

At the end of 1st quarter 2007, 101 balancing responsible entities were present on the French wholesale electricity market.

Gestionnaire du Réseau de Transport d’Électricité (RTE) is the fully independent TSO legally separated from EDF. Beyond accounting separation, the deadline for legal unbundling for distribution was 1 July 2007.

Concerning the distribution network, EDF distribution is responsible for operating 95% of the overall distribution network. The other distributors, mostly local public authorities, operate 5%.

The sector is partially privatised

Full market opening has been effective since 1 July 2007.

On 1 April 2007, 17 alternative suppliers had at least one customer. Small and medium-sized customers can only choose from a smaller variety of suppliers than large customers. The same applies to customers connected to the network of local distribution companies, where there are usually only one or two supply companies.

The market shares of alternative suppliers remain small: only 6,4 % out of the 16,5 % of the commercial customers which have subscribed to market offers, have opted for alternative suppliers. Supply from alternative suppliers accounts for only 12,4 % of the total consumption at market prices.

For customers having chosen to enter in the free market, end user prices are not regulated. For other customers, end user prices are still regulated by government on CRE advice.

The law of 7 December 2006 introduces the so-called TaRTAM (tarif réglementé transitoire d’ajustement du marché), a transitional regulated tariff for electricity. Non-residential customers which have exercised their eligibility in the past and have applied for the TaRTAM before 1 July 2007, benefit from a price ceiling at 10 to 23 % above the regulated tariff for their site.

The sector is partially privatised.

France is mainly supplied under long term contracts, agreed between the national companies in the gas producing countries and the incumbent supplier (Gazprom, Sonatrach, Statoil, Gasunie, etc.). Approximately 96% of the gas imported into France was purchased under long term contracts.

Wholesale gas market trading is organised at the Gas Exchange Points (PEGs), set up in 2004. PEGs are virtual points within each balancing zone where different trading operations take place. Trading at the PEGs is carried out on daily basis or under longer term contracts.

Main transmission and distribution system operators are: GRTgaz, Total Infrastructures Gaz France, Gaz de France-Réseau Distribution and 21 local distribution companies.

Beyond the accounting separation, the deadline for legal unbundling for distribution was 1 July 2007.

Third Party Access to storage facilities is negotiated.

The sector is partially privatised

On 1 April 2007, 15 alternative suppliers had at least one customer. The majority of the suppliers serve customers connected to the transport network, who consume large quantities of natural gas. After having gained some experience, some of them have extended their services to supply also customers connected to the Gas de France distribution network. There are hardly any alternative suppliers on the networks of local distribution companies.

The market shares of alternative suppliers remain small: only 7,4 % out of the 17,1 % of the non-residential customers which have subscribed to market offers, have opted for alternative suppliers. Supply from alternative suppliers accounts for only 12,4 % of the total consumption at market prices.

For customers having chosen to enter the free market, end user prices are not regulated. For the other customers, end user prices are still regulated by government on CRE advice.

Full market opening has been effective since 1 July 2007.

Full legal unbundling of DSOs in July 2007.

Regional initiatives.

Customer information campaigns on full market opening.

Law of 10 February 2000, n.108 (Electricity) last amended in 2005.

Law of 3 January 2003, n.8 (Gas), last amended in 2005.

Laws of 9 August 2004 and 13 July 2005, n.803 and 781, transposing the 2003 directives.

Law of 7 December 2007, n. 1537 (Energy Sector)