EDF and TotalEnergies confident on winter supplies, but flag prices tensions

"We are approaching this winter - the next one - with serenity," Luc Remont, CEO of state-owned electricity company EDF, told a business conference organised by the Medef employer association. However, power prices looked set to remain high in what Remont referred to as a "war-time" economy.

France's power supplies will be significantly less strained this winter than the last one, the bosses of main energy companies EDF and TotalEnergies said on Monday, though they warned that prices were likely to remain high.

The government last winter had to call on the French to reduce their consumption and even warned of the risk of load shedding as the country was hit by an unprecedented nuclear production low just as Europe scrambled to replace Russian gas. "We are approaching this winter - the next one - with serenity," Luc Remont, CEO of state-owned electricity company EDF, told a business conference organised by the Medef employer association.

However, power prices looked set to remain high in what Remont referred to as a "war-time" economy. "The effect of the war-time economy is not going to disappear completely in 2024, but it has already started to ease significantly", he said.

EDF will likely be in a position to offer cheaper long-term contracts for 2027 and 2028 to wholesale clients in the coming weeks that will be below the over €100 per megawatt-hour (MWh) currently, he added. Patrick Pouyanne, CEO of TotalEnergies, who spoke at the same event, reiterated his view that price of oil was also unlikely to fall anytime soon and that the European gas market would remain "fragile" until 2026 because of its dependence on liquefied natural gas (LNG).

"We are starting the winter of 2023-2024 much better, but all it takes is for a plant to break down somewhere for us to suffer the repercussions," Pouyanne said. (reporting by Benjamin Mallet, writing by Tassilo Hummel, editing by Ingrid Melander)

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