The French utility Électricité de France (EDF) is facing mounting financial pressure as electricity market prices have plunged sharply, dragging down earnings and complicating plans for nuclear expansion, according to a Fitch Ratings assessment.
Current market prices in France — down roughly 30% from their levels at the start of the year — are now at their lowest since mid‑2018, a reflection of oversupply and weak demand growth.
Why Prices Are Falling
After spiking during the 2022 energy crisis, electricity prices in France and much of Europe have eased back as nuclear output and renewable generation have rebounded. Meanwhile, industrial electricity demand has lagged, leaving producers with surplus power and limited price momentum.
This imbalance has pushed wholesale power prices lower, benefiting households but squeezing utility margins.
Impact on EDF’s Finances
Fitch notes that prolonged low market prices could dampen EDF’s earnings before interest, taxes, depreciation, and amortization (EBITDA) — forecast at around €20–€25 ($23.25 to $29.10 USD) billion annually, down from 2024 levels. The ratings agency warns that weaker revenue and persistent surplus capacity may constrain EDF’s ability to leverage debt as it prepares to build six new reactors.
The pricing environment also complicates EDF’s sales of long‑term contracts: industrial buyers are hesitant to lock in power at higher rates if spot prices remain depressed.
Broader Energy Market Considerations
France’s situation reflects a broader European challenge: balancing growing power supply from renewables and nuclear with stagnant demand, which limits price growth and hinders utilities’ investment plans.
Policy decisions — including France’s long‑awaited energy planning law — are expected to play a role in shaping future demand, pricing structures, and the pace of electrification.
