Current low electricity market prices are a problem for French utility EDF’s earnings and the company’s ability to leverage debt if they persist at a time when EDF is gearing up to build six nuclear reactors, Fitch Ratings’ senior director Antonio Totaro said on Thursday.
The average power price in France for 2026 is now down about 30% since January to the lowest level since mid-2018 after rocketing during the 2022 energy crisis, which caused industries to shutter factories and cut consumption, leaving France in a power surplus.
Expectations around demand growth in the next couple of years are limited, which means there should not be major price changes either up or down, Totaro said.
“For now, the electrification is on paper … You need some contribution from the demand (for prices to rise), which we don’t see at the moment. It will come, but it’s taking more time than expected,” he said.
Fitch Ratings forecast EDF’s earnings before interest, taxes, depreciation and amortization at between 20 and 25 billion euros a year over the next several years on lower market prices, down from the 36.5 billion euros the company reported for 2024, Totaro said.
EDF will also have to organise a large maintenance program for the existing nuclear fleet, which is expected to cost over 100 billion euros by 2035. Nuclear power provides about 70% of the electricity in France.
EDF did not respond to a request for comment.
One of the positives for EDF in recent years was the return of the nuclear fleet following the mass outages in 2022, but the more they produce, the more the price goes down without additional demand in the system, Totaro said.
(Reporting by Forrest Crellin)
