EDF has never been like any other company. But the chain of events that culminated, on Friday, March 21, in the ruthless replacement of its CEO, Luc Rémont, raises the question of what the public electricity giant really is. Is it a company that must ensure its long-term survival through the profits it generates, or is it a public utility with a public service mission to provide the cheapest possible energy to facilitate the country's reindustrialization and ensure its energy independence? When he thanked the outgoing EDF head, President Emmanuel Macron gave an answer akin to his catchphrase "at the same time" – neither one way nor the other, which may be practical in politics, but is problematic in the business world.
Rémont's ouster as head of EDF comes after just over two years in the job, during which he succeeded in restoring the company's electricity production levels, which had been jeopardized by corrosion problems and led to the shutdown of two-thirds of the nuclear reactor fleet in the midst of the energy crisis. Since then, production has increased by 30%, enabling France to become a net exporter of electricity once again.
This return to better fortunes has enabled EDF to stabilize its debt, return to profit and focus on two issues that will shape the company's future. The first is the question of the price at which EDF can sell its electricity, while the second concerns the construction of six new nuclear reactors, which Macron announced for 2022. Although the two issues do not have the same timeframe, they are closely linked, as the company's ability to invest in the long term depends on its ability to generate profits in the short term.
The question is how to find a balance between EDF's interests (because the company must take on considerable investments) and defending French industry's competitiveness thanks to affordable energy. This squaring of the circle has led to tensions that have risen to a crescendo in recent months.
It's hard to blame the CEO for acting as the guarantor of the company's social interest. EDF is 100% state-owned since 2023, but that doesn't mean that the company is obliged to give priority to the public interest at the expense of its economic viability.
It's just as strange that some so-called "electricity-intensive" customers are accusing Rémont of having turned his back at French industry by offering them a pricing system that is more expensive than what they have been paying up to now under the so-called "regulated access to historical nuclear electricity" (ARENH) regime. How can these companies, which are always quick to defend free competition and the market economy for their own business, criticize EDF for charging prices that simply comply with Europe's regulatory and competition framework?
Asking EDF to sell its electricity at low prices is all the less reasonable given that the French government is simultaneously urging the group to finance the relaunch of French nuclear power with a type of EPR (evolutionary power reactor) whose design has not yet been completely decided, in order to rebuild a sector battered by Macron's procrastination during his first term in office. Rémont's successor Bernard Fontana, the current director general of Framatome, will surely have to be more diplomatic than he was, but he won't be able to work miracles in the face of so many contradictory injunctions.