PARIS, Sept 10 – French power producers are bracing for possible tax hikes, according to four people familiar with the matter, as concerns grow that the new government may revive recent proposals to tax large power plants.
The outgoing government is considering imposing a tax of 40,000 euros ($44,000) per megawatt on domestic power plants with a capacity of more than 260 megawatts, a source at a major energy company said.
Three other sources said the offer could raise about 3 billion euros, 80% of which would come from state-owned nuclear power company EDF. They declined to be named as they were not authorised to discuss the matter publicly.
French finance ministry sources confirmed that Bessy has drafted a capacity tax for 2024, but that it now depends on Prime Minister Michel Barnier’s yet-to-be-formed future government.
EDF, Engie (ENGIE.PA) and TotalEnergies (TTEF.PA) declined to comment.
France, which faces legal action from the European Commission for borrowing more than its authorised debt limit , is looking for new ways to raise revenue as the CRIM tax on energy companies’ super-priority rights falls well short of expectations in 2023.
CRIM’s revenue last year fell to around 300 million euros from expectations of 3 billion euros, due to heavy losses at EDF and general volatility in European power prices.
Outgoing Finance Minister Bruno Le Maire on Monday urged new lawmakers to adopt the previous government’s proposals and pass a budget in the coming weeks.
EDF has more than 61 GW of nuclear capacity, meaning its contribution would be €2.4 billion even without including hydro and gas plants.
Engie, which has 2.55 gigawatts of gas and hydropower plants in France, could lose 102 million euros.
TotalEnergies may have to pay around €106.8 million for its five gas-fired power plants with a combined capacity of 2.67 GW.
France’s wind and solar farms are too small to have any impact.
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