The government’s “dumpling” on the electricity price cap

Cleaning manufacturers are protesting against an amendment which sets the level of their contribution to the energy crisis. The showdown began with the government.

The boss of Veolia must discuss a sensitive file with the Minister of the Economy. Estelle Brachlianoff is meeting Bruno Le Maire this Friday to discuss a government imbroglio that concerns her group and the entire cleaning industry.

Last Thursday, the major players in the environment discovered, dumbfounded, an amendment voted in the Senate which plunges them into the red. The executive plans to set a price cap for incinerators for the electricity they produce, thanks to the combustion of waste, and resell. The price had been set at €180/megawatt hour during the examination of the text in the National Assembly.

A measure similar to that put in place for the levy of surplus profits from wind and solar farms: this is the contribution of companies in the sector to the energy crisis. Except that last Thursday, the government presented a new amendment to the Senate in which this ceiling was suddenly divided by three.

“It’s nonsense nobody consulted us, gets carried away an industrialist. At 60 euros the price of electricity, everyone loses money because of soaring costs”.

A final amendment proposed to rectify the situation by proposing a price of 145 euros, but the Minister of Public Accounts, Gabriel Attal surprisingly opposed it…

“He was not even alerted to the subject, he was floundering, adds another leader of the sector. But even at 145 euros, we are just starting to make money”.

The seven manufacturers write to Elisabeth Borne

A rare union in this highly competitive sector, the seven incineration companies (Veolia, Suez, Paprec, Séché, Pizzorno, Idex and Urbaser) wrote together to Prime Minister Elisabeth Borne last weekend. In their letter that BFM Business has obtained, they point to the “lack of consultation” of this measure which “will strongly impact the development of the sector”. There are around a hundred incinerators in France which supply about 1% of electricity production. “This winter, we will be needed,” slips one of the signatories of the missive, alluding to the shortage of nuclear electricity.

Manufacturers have started discussions with the government and the Ministry of Energy Transition. “It’s an unfortunate ball but it will be rectified” confides a large company in the sector. “The subject of incineration had not been pointed out, we recognize in the cabinet of Minister Agnès Pannier-Runacher. We became aware of it after the tabling of the amendments”. It is all the more embarrassing because it also affects local communities.

The mayors of France get involved

The incinerators belong to the municipalities which delegate the management to the operators, on the same model of water management. A portion of the revenue goes to them. The letter sent to the government also points to the risk of seeing “an increase in local taxation”. If too low a ceiling were set, it would also have consequences on the tax revenues of municipalities, which could drop by several hundred million euros. It only took 24 hours for the president of the Association of Mayors of France to react.

“The government wants to cap for the benefit of the State the revenue from the sale of energy produced by the incineration of waste above €60/MWh, while the capping at European level is €180/MWh This puts the finances of the industry and communities at risk,” David Lisnard said on Twitter on Saturday.

At Bercy, we are trying to calm things down pending the new reading of the text in the National Assembly in early December, as part of the finance bill (PFL).

“The government has provided for the deduction of income already paid to local authorities, in order to avoid taxing them. This contribution on ‘inframarginal rents’ aims to capture only abnormal income generated by the production of electricity and it has no not intended to undermine the profitability of electricity production” confides the cabinet of Gabriel Attal, the Minister of Public Accounts. “We have to deal with the subject almost site by site, adds the cabinet of Agnès Pannier Runacher. The ceiling of 180 euros is a little high but that of 60 euros a little low… “. Meetings will take place in the coming days between the industrialists of the sector and the ministries concerned.

Matthew Pechberty Journalist BFM Business

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