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Stop at 4 percent: EDF share collapses by around a fifth: France caps rise in electricity prices | news


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In an interview with the newspaper “Le Parisien” on Thursday, Le Maire said that prices should not be increased by more than four percent. Without such a cap, experts had assumed an increase of up to 20 percent. In order to contain prices, state-owned utility EDF is said to be increasing the volumes of nuclear power it sells to smaller rivals. The EU Commission has already approved the project, the minister added. Increases in the price of electricity in winter have the character of social explosives in France. In addition, the government must fear new protests. Prime Minister Jean Castex promised the price brake in September.

EDF investors run away

Shares in the French utility EDF (Electricit√© de France) then suffered massive losses. At times they lost around a fifth of their value. Most recently, the price fell by 14.78 percent to EUR 8.82. EDF thus marked a level that was last reached in summer 2020. Other utility stocks such as Engie also fell. Alongside news of a cap on electricity prices in France, majority-owned electricity utility EDF is said to temporarily increase the amount of nuclear power it sells to smaller competitors. According to Le Maire, the step already approved by the EU Commission is also intended to cap the electricity bills of customers who do not purchase their electricity from EDF. Analysts reacted coldly. Oddo downgraded BHF EDF from ‘Outperform’ to ‘Neutral’. Barclays analyst Peter Crompton called the losses overdone. Given the massive levies, there could be an entry opportunity at EDF. The uncertainty on the electricity market could even have a positive effect on other European utilities. They could use the situation for price increases. “A lot of funds were caught on the wrong foot here,” says one trader. They got into EDF because of the prospect of nuclear power being classified as sustainable by the EU taxonomy and thus offering high growth opportunities.

RWE and E.ON shares turn positive

After a weak start, marked by the decision to brake electricity prices in France, the shares of RWE and E.ON turned positive on Friday. First of all, the slump in prices at French competitor EDF clouded the entire sector. But then voices arose that problems with the French could even increase electricity prices. E.ON grew particularly strongly with a plus of 1.2 percent. RWE gained 0.36 percent after several strong days recently. Paris (Reuters) / Dow Jones Newswires / dpa-AFX

More news about EDF (Electricité de France)

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