The ARENH mechanism
ARENH, which stands for 'Regulated Access to Incumbent Nuclear Electricity', is a right that entitles suppliers to purchase electricity generated by nuclear power plants at a regulated price, in volumes determined by the French Energy Regulatory Commission, CRE.
This mechanism stems from the law relating to the new organization of the electricity market (NOME) of 7 December 2010 and is aimed at the development of competition on the retail market. It has been in effect since 1 July 2011 for suppliers and was opened on 1 January 2014 to system operators to compensate for their losses.
How it works
Electricity suppliers wishing to exercise their ARENH rights make an application to CRE, based on demand forecasts. The CRE then calculates the ARENH rights to assign. Today:
- The total ARENH volume sold each year cannot exceed 100TWh
- The regulated price is currently set at 42 €/MWh.
The CRE then notifies these volumes to suppliers, EDF, the Caisse des Dépôts et Consignations and RTE.
- The role of RTE is to transfer electricity to the perimeters of the balance responsible parties designated by the suppliers activating their ARENH rights. The transfer is done in such a way that EDF has no knowledge of the quantities transferred to each balance responsible party.
- Financial flows are handled by the Caisse des Dépôts et Consignations.
To avoid any windfall effects, a retrospective mechanism has been set up to offset any surplus volumes allocated, in the event that the supplier's portfolio has not developed in line with forecasts. This mechanism takes the form of a price premium for any surplus quantities of electricity allocated. It is done by the CRE on an ex post basis, according to actual electricity consumption observed by the supplier's customers.
Calculating observed consumption
The calculation methods and the terms for consumption transmission proposed by RTE were approved by the CRE on December 15 2011. The methods serve to accurately identify consumption by each of the consumer categories (≤ 36 kVA and >36 kVA), for the purposes of determining suppliers' ex post ARENH entitlements.
Data exchanges between a DSO and RTE
The distribution system operators send RTE the PDS load curves aggregated by BRP, which are described in the calculation method for the observed consumption of a supplier under the ARENH scheme. RTE aggregates these with the PTS load curves and publishes them for balance responsible parties.
A balance responsible party whose perimeter includes end customers served by multiple suppliers, at least one of whom enjoys ARENH rights, is qualified as a multi-supplier BRP. In this case, the multi-supplier BRP must send RTE the detailed load curves for each supplier.
Following data transmissions by the DSOs and multi-supplier BRPs, RTE calculates and sends to the CRE by the end of April at the latest, the observed consumption of the past calendar year and for each supplier who has acquired electricity under the ARENH arrangement.
More information in the following documents:
In order to exercise their ARENH rights, suppliers are required to sign a standard agreement with EDF. The supplier can then send an application file for ARENH to the CRE, at least 40 days before the start (1 January and 1 July of each year) of each delivery period of one year.
The DSO and balance responsible parties designated by a supplier having acquired electricity under the ARENH scheme must sign a contract with RTE which is based on the Rules on the transmission of data for Regulated Access to Incumbent Nuclear Electricity.
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