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17 January 2007 - Electricite de France (EDF) and intensive power user consortium Exeltium have signed a Memorandum of Understanding over long-term power tariffs.
The supply contracts are to start in the second quarter of 2007 after
Exeltium finalizes "in the next few weeks" the power agreement with EDF and the necessary contracts with partners and banks, the groups said. The agreement is also to be presented to the relevant European competition authorities.
"The agreement defines the terms and conditions of a long-term industrial and commercial partnership, particularly in terms of volume, price and industrial risk-sharing," a statement from the groups said.
EDF would not give any more details on the deal Tuesday. Laurent
Chabannes, chairman of Exeltium, was unavailable for comment.
The tariffs are likely to be between €37/MWh and €40/MWh ($48-$52/MWh), according to French newspaper Les Echos. The tariffs are expected to last for a minimum of 15 years. The current French wholesale market price for power in 2008 is around €52.80/MWh.
Traders fear the long-term contracts may take away much-needed liquidity from the French wholesale power market. Exeltium was founded by seven large companies, including Alcan, Air
Liquide and Arcelor, and represents some 60 companies with more than 160 sites in France. The companies aim to contract for drawing rights to generating capacity for a minimum of 15 years at prices pegged to generation costs.
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