The ARENH 2025 window closed this Friday, November 29, 2024.

For you, consumers and customers, this device dedicated to electricity suppliers may seem remote and obscure and may not concern you.
Think again. The ARENH law of suppliers has a direct impact on your energy bill.

In recent years, traffic jam has contributed to the rise in electricity rates. You are concerned as soon as you have taken out an electricity contract with ARENH indexed prices.

But what is clipping? What is its impact on invoices? Can businesses take action now to limit the impact on their energy costs?

Here is all the information on ARENH to anticipate and secure your electricity budget.

What is the ARENH device?

ARENH, a system in favor of competition

The ARENH system was set up in 2011 by The NOME law on the New Organization of the Electricity Market, following the work of the Champsaur Commission.

This device aims to promote fair competition between the historical electricity supplier, EDF, and alternative suppliers.
The objective? Ensuring affordable electricity prices for all consumers, as part of The opening of energy markets to the competition in France.

Regulate access to historic nuclear electricity

ARENH signifies Regulated Access to Historic Nuclear Electricity. Thanks to ARENH, each alternative supplier can cover part of the electricity consumption needs of its customers by buying a share of Nuclear power generation. This access to more competitive electricity promotes the control of the prices of electricity offers.

What is ARENH capping?

What is the ARENH ceiling?

The volumes of nuclear electricity sold at advantageous prices by EDF to alternative suppliers are capped by law. This cap was put in place to preserve the financial capacities of the main French electricity producer and supplier.

For many years, The ARENH ceiling is set at 100 TWh, with an exceptional increase to 120 TWh in 2022. This ceiling corresponds to around a third of France's current nuclear production.

Why the clipping?

ARENH's 100 TWh is divided between all alternative suppliers who have filed an ARENH application with the Energy Regulatory Commission (CRE). However, since 2018, the total volume of ARENH requested by all suppliers has exceeded the ARENH ceiling.

The clipping mechanism was put in place to regulate requests and Guarantee access to historic nuclear electricity for all, within the framework of healthy competition.

The capping is based on the following principle: allocating a share of ARENH, even partial, to all suppliers, rather than giving 100% of their demand to some and 0% to others.

How do you calculate the ARENH peak?

The capped ARENH portion corresponds to the calculation of Difference between the overall volume of ARENH requested by alternative suppliers and the annual ARENH limit available.

Evolution of ARENH orders (in TWh) since 2018:

For example, for the year 2024, the total quantity of ARENH requested was 130.41 TWh for a maximum volume of 100 TWh. The CRE therefore carried out a shearing of 30.41 TWh, i.e. a shearing rate of 23.32%.

In concrete terms, this means that the alternative suppliers have all seen their ARENH demand met by 76.68%.

ARENH 2025: what peak?

This Friday, November 29, 2024, as part of the historic ARENH 2025 regulated access to nuclear electricity mechanism, the CRE (Commission de Régulation de l'Énergie) has just announced the allocation rate.

It amounts to 74.12% with a controlled volume of 134.93 TWh, i.e. a peak of 25.88% (versus 23.32% in 2024).

The CRE recalls that the quantity of electricity allocated to suppliers has been set at a price of €42/MWh and is still capped at 100 TWh for the year 2025.

The impact of ARENH capping on electricity suppliers' offers

All consumers who have subscribed to ARENH indexed price contracts are entitled to a share of electricity from nuclear sources at a more competitive rate. But The locking mechanism reduces everyone's ARENH right, with repercussions on electricity bills.

Indeed, alternative suppliers must buy the limited portion of electricity on the energy market. However, prices on the wholesale market are volatile and much higher than those for nuclear electricity. The ARENH is now fixed at €42/MWh. These higher supply prices are passed on by suppliers in their electricity offers, with an upward revision of contract rates.

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Market prices

Regardless of the supplier, a high ARENH cap rate therefore results in a Inevitable increase in bills electricity for consumers, businesses, communities and individuals.

Businesses: what solutions are there to limit the impact of ARENH capping?

As a business, you don't have no control of the ARENH locking mechanism applied by CRE. But you can take action to limit its impact on your electricity bills.

Subscribe to an electricity offer under ARENH 2024 conditions

In the short term, to secure your energy budget, you can subscribe to a new electricity offer before the ARENH 2025 counter. Until December 31, 2024, you can still benefit from the known and advantageous pricing conditions of ARENH 2024.

Anticipate the purchase on the market on your part ARENH limited

If you anticipate significant ARENH losses, you can also ask your energy supplier tobuy your capped electricity share in advance on the market, without waiting for the end of the year when prices are in the habit of soaring.

However, this requires expert knowledge to estimate the ARENH limit and identify the most financially favorable period for the supply of electricity on the wholesale market.

Control your energy consumption

In the longer term, the best way to lower your electricity bill is to reduce your consumption at the source. Investing in energy sobriety, energy efficiency and renewable energies, it is the winning trio to control your energy expenses and improve your carbon footprint.

Towards the end of ARENH

The end of ARENH is announced for December 31, 2025. The State and EDF signed a first agreement in November 2023, outlining the outlines of the new price control system from 1 November 2023.^Er January 2026. However, voices are being raised to call for new negotiations in 2025.

Encouraging long-term contracts

EDF is banking on the signing of long-term contracts of at least 5 years. This period should allow businesses to secure their energy supply, by benefiting from a better visibility on prices.

With more stable prices, long-term contracts must protect companies from market vagaries and optimize energy purchases.

The creation of a redistributive system

The bill provides for a Nuclear universal payment financed by a nuclear contribution. These would be levied on sales of electricity produced by the national nuclear park, above a reference price.

EDF and the State have set the nuclear energy reference price around €70/MWh. The bill provides for a 50% levy of EDF's additional income when the price increases between €78 and €110/MWh. This rate rises to 90% above €110/MWh.

To avoid an increase in electricity prices, the revenue collected will be directly redistributed to consumers individuals and professionals, regardless of their supplier. However, the terms of this payment remain to be specified.

The extension of TRV to sites greater than 36 kVA

The regulated electricity sales tariff is now available to companies with less than 10 employees, whose turnover does not exceed 2 million euros and whose subscribed power is less than 36 kVA.

The law of 11 April 2024 removed this last threshold. From the 1^Er February 2025, all companies meeting the workforce and turnover conditions will be able to subscribe to a TRV contract regardless of the power subscribed.

Until the end of ARENH, suppliers will communicate to their customers in January 2025 the new electricity rate applicable to their contract for the year. These will have to take into account the share of ARENH allocated and the share of electricity purchased at the end of 2024 on the wholesale market.

SirEnergies recommends that you check your first invoices carefully to ensure that your supplier did not make a mistake in calculating any additional costs associated with the ARENH cap.
Our experts are at your side to optimize your energy purchases and anticipate the end of ARENH today.

Did you know that?

The Sirenergies firm provides you with an innovative tool allowing you to Easily calculate your ARENH fees

Source: Sirenergies tool

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