EDF takes hit as Macron shields public from soaring energy bills
EDF’s shares fell by 14.6 per cent after Macron ordered the company to sell cut price energy to its rivals to stave off price hikes.
The scheme will cost EDF €8bn (£6.7bn), the French state-controlled energy group warned yesterday, forcing the company to revise annual earning estimates. French President Macron promised in September to cap power price increases at four per cent this year, passing the cost of a 44 per cent rise in energy prices onto suppliers in order to protect households.
The announcement compounded the woes of EDF investors, who have seen shares shed 25 per cent of their value in a month.
The energy company, which is helping to build a new British nuclear power point at Hinkley Point, spooked markets on Thursday after revealing it would extend the shutdowns of five nuclear reactors because of safety concerns, leading to a reduction in nuclear energy production forecasts. Ten of the companies fifty six nuclear plants are now out of action.
It comes as governments across Europe face taking decisions over soaring wholesale gas and electricity prices which are putting a strain on households and businesses.
The UK government and energy regulator Ofgem will revise the price cap for bills in April and are reportedly mulling the introduction of loan mechanisms to spread the cost of price increases over the next five to ten years for customers. The price cap could rise to an annual limit of £2,400 by October unless legislators step in, according to analysis by the FT.
Read more: Energy Bills: PM mulls bank loan plan with price cap set to hit £2,400