The end of an impasse for a crucial sector: Parliament definitively adopted on Wednesday June 17 a bill which should make it possible to relaunch investments in French hydroelectric dams, the country’s second source of electricity, by putting an end to an old dispute with the European Commission.
The text, which transforms the legal regime for large hydroelectric installations, was adopted in the Assembly by 290 votes to 59. Supported for a long time by MP Marie-Noëlle Battistel (PS), who said she was “moved”, and supported by the government, it had been adopted the day before in the same terms in the Senate. Only the rebels voted against. The Ecologists and the National Rally abstained.
It was eagerly awaited: in 2025, hydroelectricity represented the second source of electricity production after nuclear power, and the first renewable source, before wind and solar power.
“Our energy mix is among the most carbon-free in Europe” and hydroelectricity “has a lot to do with it,” said the Minister for Energy, Maud Bregeon, on Wednesday. The text “opens the way to a new dynamic for French hydroelectricity”, with a “prospect of several billion euros of investments in our valleys”, she added.
These investments, essential for these sometimes aging works, are currently prevented because of legal insecurities, linked to two procedures by the European Commission against France. The first dates from 2015 and concerns EDF’s dominant position in hydroelectricity. The second, from 2019, concerns the absence of re-competition for expired concessions.
The dams are in fact currently operated under a concession regime (more than 340): the works belong to the State and operation is entrusted to an operator. The two main concessionaires are EDF and Compagnie nationale du Rhône.
As the oldest contracts expire, the concessions should have been put back into competition, but France refuses this. “None of the groups in the Assembly want it, the unions don’t want it, the operators don’t want it either, the citizens don’t want it either,” insisted Marie-Noëlle Battistel.
Long discussions were therefore initiated with the European Commission to seek a compromise. An agreement in principle was finally reached with Brussels, which said it agreed to abandon the disputes on condition that the French legal regime for dams is reformed. That’s the whole point of the text.
“Balance point”
Very technical, it plans to move from a concession regime to that of “authorization”. The State, which will retain ownership of the works, will have to buy back the concessions and compensate the operators. It is up to them to then pay an occupancy fee for 70 years.
An expertise will calculate the amount of these balances, which should be “overall favorable” for the State, estimates Bercy, who estimates the time between the adoption of the law and the transition to the new regime at around 18 months.
A measure divided the hemicycle: an opening of the hydroelectricity market, thought of as compensation for the continued existence of historic operators, in particular EDF, to make the agreement compatible with European competition requirements.
The text provides that at least 40% of the country’s hydroelectric capacity be auctioned to companies other than EDF. “I would have happily done without it,” conceded Marie-Noëlle Battistel. “But it is obviously the point of balance”, which will make it possible to resolve the dispute over the dominant position of EDF, she explained, deeming this solution “acceptable”.
The auction price must take production costs into account. A “fundamental” provision, to remind you that in no case is this mechanism comparable to Arenh”, she repeated on Wednesday, in reference to a mechanism which required EDF to sell part of its nuclear electricity at a knockdown price.
An argument which did not convince the National Rally. Energy “must be managed according to the interests of the nation and not according to the requirements of a market designed in Brussels,” said RN deputy Lionel Tivoli.
Environmentalists were concerned that the system would lead EDF “to cede volumes of electricity at periods incompatible with optimal flow management,” explained MP Julie Laernoes. LFI MP Matthias Tavel criticized the abandonment of “hydroelectricity, its safety, its development, at the discretion of the operators”.
