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EDF seeks hydro classification to avoid climate change levy

ELECTRICITE DE FRANCE IS seeking to avoid paying the UK’s climate change levy by applying to have its electricity exports to Britain classified as hydroelectric, rather than nuclear generated. The French utility, whose exports to the UK via the interconnector sometimes reach 5% of UK consumption, has sent a request for levy exemption to the UK energy regulator, the Office of Gas and Electricity Markets (Ofgem).

edf is predominantly a nuclear power producer but it buys or generates 15% of its power from small hydro projects in the Pyrenees, the Rhine and the Massif Central. Many of these projects have a capacity of less than 10MW and thus qualify for a climate change levy exemption in Britain.

If EDF were to win an exemption, it may go on to pursue a subsidy from the Renewable Obligation Certificate (ROC) scheme which the UK government has developed. The climate change levy amounts to 0.43p/kWh (61 US Cents), but the suggested subsidy level from the ROC scheme would amount to a more substantial 3p/kWh (4.3 US Cents).

Ofgem said it was in consultation with EDF about the application but was reluctant to say how likely it was that the company would be successful. ‘We are in discussions with EDF about the justification for its application,’ said a spokesman. ‘We have to look at the implications of allowing a reclassification, but hopefully a decision will be made in the near future.’