Regulated Access to Historic Nuclear Electricity (ARENH)—a unique feature of the French electricity market introduced in 2010 following France’s integration into European energy markets—is set to end sometime in 2025. A look back at the history of a controversial—yet all too often misunderstood—system.
On December 31, 2025, a provision specific to the French electricity market—the Regulated Access to Historic Nuclear Power (ARENH)—will come to an end. This provision, introduced in 2011, allowed EDF’s competitors to access a total volume of 100 TWh of nuclear electricity at a fixed price of 42 euros per megawatt-hour (MWh).
Often portrayed by its critics as either an authoritarian mandate from European authorities or a form of expropriation of EDF, the objectives and terms of this provision are frequently misunderstood or poorly understood. Let’s take a look back at the history of this measure.
The Origins of ARENH
France’s integration into the European energy markets following their deregulation led to rising prices beginning in 2004. French industrial customers lobbied heavily to be protected from this increase, prompting the government to implement a new regulated rate for businesses in 2006. The same approach was taken when the markets opened to residential customers in 2007, with the government deciding to maintain a regulated rate based on production costs.
However, rising prices on the wholesale markets created a “price squeeze.” This prevented alternative suppliers—who purchased electricity on the wholesale market—from expanding. In fact, these suppliers were unable to compete with the regulated rate and EDF’s offers, which were based on the more competitive costs of the established nuclear power sector.
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Thus, the political will to protect businesses and consumers through the regulated rate effectively blocked the opening of the market to competition. ARENH was created in this context: it made it possible to fulfill the European commitment to foster competition while ensuring that French consumers continued to benefit from the economic advantages of legacy nuclear power.
A useful mechanism, but one that is gradually becoming weaker
The choice of this mechanism was driven by a desire to maintain the economic balance that existed prior to liberalization. It has indeed allowed French consumers to benefit from the economic advantages of existing nuclear power, while shielding them from fluctuations in the European wholesale market price, regardless of the rate plan or supplier. The allocation of the ARENH volume to alternative suppliers is strictly regulated both upstream and downstream to prevent them from making an immediate profit by reselling the electricity on the wholesale market. It provides for financial settlements in the event of a discrepancy with the needs of the customer portfolio.
Nevertheless, the mechanism encountered several unexpected scenarios that undermined its stability. In 2015, the European wholesale market price, which was falling, dropped below the price set for the ARENH. In this situation, the ARENH lost its appeal for alternative suppliers.
This alternative revealed the asymmetric nature of the system: it does not guarantee that EDF’s costs will be covered if market prices fall below the ARENH rate. In November 2016, fluctuations in futures contract prices allowed alternative suppliers to engage in financial arbitrage involving the ARENH.
This period of low prices in the wholesale markets also allowed alternative suppliers to expand their market share, which they maintained when prices began to rise again in 2018.
In 2019, the 100 TWh volume mandated by law was insufficient to cover all of the alternative suppliers’ nuclear power needs (130 TWh). A cap on the ARENH was then implemented. This rationing had the effect of increasing supply costs for alternative suppliers, since a portion of EDF’s nuclear-generated electricity had to be purchased at the wholesale market price to make up for the shortfall in the ARENH volume.
As a result, these suppliers had to adjust their supply contracts accordingly. In 2019, the Energy Regulatory Commission (CRE) raised the regulated electricity rates to reflect these new supply costs, so that the regulated rate would remain “open to competition” (i.e., subject to competition from alternative suppliers). One effect of the price cap is to increase the value of nuclear energy, part of which is now sold by EDF at market prices, which are higher than the ARENH rate.
An advantage for EDF over its competitors
The 2019 Energy and Climate Act provided for an increase in the ARENH volume to 150 MWh in order to end the cap. At the same time, there were plans to raise its price to keep pace with rising costs in the nuclear power sector. The HERCULE corporate restructuring project, launched to improve the company’s financial valuation, also presented an opportunity to redesign the ARENH mechanism and make it symmetrical, guaranteeing EDF a minimum level of revenue in the event of falling prices.
However, the HERCULE project was abandoned in the face of union mobilization because it undermined the company’s cohesion. The proposed changes to the ARENH were also scrapped at that time. Noting that the wholesale market price was trending upward, EDF had more to gain by leaving the ARENH unchanged: it could earn more through price capping than it would from a hypothetical revaluation of the ARENH price.
The French electricity sector thus entered the 2022 European energy crisis with an unbalanced and asymmetrical system. Due to rising gas prices, an increase in the prices of electricity futures contracts for 2022 was observed as early as the beginning of fall 2021.
The government then decided to implement a tariff shield to prevent this increase from having too great an impact on end consumers—and to avoid a political crisis in the run-up to the election.
From the Energy Crisis to “ARENH+”
To reduce additional costs for the government and protect businesses, he also considered increasing the volume of ARENH to meet a demand of 160 TWh. Reducing the ARENH cap reduces the amount of electricity purchased on the wholesale market, which in turn lowers bills for all customers and thus reduces the cost of the rate protection program. Negotiations with EDF delayed the decision.
An “ARENH+” was finally approved by the government in January 2022 for the period from March through December 2022. Ultimately, this reduction in the ARENH cap did indeed have the effect intended by the government, which was to lower the amount of utility bills for all consumers.
Nevertheless, given its delayed implementation, this expansion of the ARENH by an additional 20 TWh forced EDF to purchase the necessary electricity at market prices in order to resell it at a price of 46 euros per MWh. For EDF, the direct cost was approximately 4 billion euros.
A Critical Situation for EDF’s Nuclear Program
This extension of the ARENH came at a critical time for EDF. Many nuclear power plants were offline. Maintenance on the plants was delayed by the COVID-19 crisis, and the discovery of previously unknown stress corrosion issues led to the shutdown of numerous reactors.
Added to this was the drought during the summers of 2021 and 2022, which reduced water reserves in dams and cut back on hydroelectric and nuclear power generation. Throughout 2022, EDF had to import electricity from neighboring European countries at extremely high prices.
In the fall of 2022, the price-setting mechanism on the European wholesale market became the focus of debate in Europe and France: the aim was to limit its impact on consumers’ bills. Paradoxically, in France, the debate then centered on the ARENH. The parliamentary commission of inquiry “aimed at establishing the reasons for France’s loss of energy sovereignty and independence” provided former EDF executives with an opportunity to condemn the ARENH, which they accused of impoverishing EDF and of being responsible for France’s energy dependence.
The ARENH extension was not renewed for 2023 and 2024, even though demand for ARENH remained high, totaling 148 TWh. As a result, French customers purchased, directly or indirectly, a large portion of EDF’s nuclear electricity at the exceptionally high European wholesale market price. These two years therefore proved to be very profitable for EDF, whose nuclear power plant availability improved.
A new mechanism that exposes market participants to greater market price volatility
In the meantime, the Ministry of Transition has been working to replace ARENH with another symmetric mechanism. The idea was to adapt the “symmetric contracts for difference (CFDs), ” which are used in Europe for renewable energy, to the existing nuclear power sector.
This mechanism was intended to guarantee a price supplement relative to the electricity market, thereby ensuring the producer’s revenue. Conversely, if the market price rises, the government recovers the difference, which it can redistribute to consumers.
At the same time, EDF advocated for another mechanism, which involved eliminating the ARENH and taxing EDF’s profits when they exceed a certain level. In November 2023, Bruno Le Maire formally announced the decision in favor of this second mechanism, which has now been approved as part of the 2025 Finance Act.
Nuclear electricity will therefore be sold on the market, and the government will be able to tax EDF at a rate of 50 percent if market prices exceed an initial threshold calculated based on EDF’s full costs—with a margin yet to be determined—and then cap its revenues if a second threshold is exceeded. The revenue generated by this levy should then be redistributed equitably among consumers.
Beyond the uncertainties surrounding the definition of thresholds and redistribution procedures, the new mechanism values nuclear energy at market prices. EDF remains exposed to the market but retains the ability to benefit from the revenues generated by existing nuclear power to finance its investments, particularly in future nuclear projects. EDF’s preference for this second mechanism also stems from the fact that it enhances the company’s strategic autonomy while preserving its organizational cohesion.
Industrial customers and consumer groups, on the other hand, argue that it reinforces the company’s dominant position and deprives them of economic security. The proposed redistributive mechanism risks creating significant inequalities due to the diversity of supply arrangements. These consumers also anticipate price increases in January 2026, which could jeopardize the momentum toward electrification—the cornerstone of decarbonization.
Thus, the ARENH played a vital role in maintaining stable electricity prices for 15 years, including during the energy crisis, even though the price cap limited its protective effects. Its complexity, technical vulnerabilities, and ambivalent status were all weaknesses highlighted in the public debate to undermine its legitimacy. The abolition of the ARENH has the effect of increasing the market’s role in price formation and, consequently, of increasing economic uncertainty for all stakeholders.
The author would like to thank Ilyas Hanine for proofreading this text.
