Electricity and gas market Observatory

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3rd Quarter of 2011

Market Observatory

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SUMMARY

Introduction ... 3

The electricity market ... 4

The retail electricity market ... 4

1. Introduction ... 4

2. Customer segments and their respective weight... 5

3. Status on September 30^th 2011 ... 6

4. Dynamic analysis: 3^rd Quarter of 2011... 14

5. Electricity retail prices ... 17

The wholesale electricity market... 22

2. Wholesale market activity in France ... 23

3. Prices on the French wholesale market and European comparison ... 27

4. Fundamentals on the electricity market ... 33

5. Imports and Exports ... 35

6. Concentration on the French electricity market ... 36

The gas market ... 39

The retail gas market ... 39

2. Customer segments and their respective weights ... 40

3. Status on September 30th, 2011 ... 41

4. Dynamic analysis: 3rd Quarter of 2011 ... 48

5. Natural gas retail prices ... 51

The wholesale gas market ... 55

1. Main steps in the French Wholesale gas market... 55

2. Gas pricing and gas markets in Europe... 55

3. Evolution of gas consumption in France ... 56

4. The wholesale market in France... 59

5. Activity on organized markets and international comparison ... 61

6. Gas infrastructures... 62

7. Concentration of the French gas market ... 63

Electricity and gas market observatories combined glossary ... 65

Specific electricity market observatory glossary... 66

Specific gas market observatory glossary ... 68

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Introduction

The purpose of the observatory is to provide the general public with indicators for monitoring market deregulation. It both covers the wholesale and retail electricity and gas markets in Metropolitan France.

This observatory is updated every three months and data are available on CRE website (www.cre.fr).

Since the 1^st of July 2007, all customers can choose their gas and electricity suppliers.

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The electricity market

The retail electricity market

1. Introduction

The deregulation of the French electricity market took place in several stages:

− In June 2000, all sites with annual electricity consumption over 16 GWh became eligible.

− In February 2003, all sites with annual electricity consumption over 7 GWh became eligible.

− In July 2004, all companies and local government agencies became eligible.

− In July 2007, all customers became eligible, including residential customers.

On September 30^th, 2011, the French retail market represents 35.3 million sites¹, which account for 446 TWh² of annual electricity consumption.

Each client has the choice between three types of contracts:

− Contracts under regulated tariffs (offered by incumbent suppliers only)

− Contracts at market prices (offered by incumbent suppliers and alternative suppliers) Distribution of electricity contracts

– illustrative diagram –

The data sources of the observatory originate from the incumbent suppliers, RTE and from the seven largest distribution system operators : Electricité Réseau Distribution France (ex EDF Réseau de Distribution), Electricité de Strasbourg, Gaz et Electricité de Grenoble, URM (ex Usine d’Electricité de Metz), SICAE de l’Oise, Géredis Deux-Sèvres (ex Sorégies Deux-Sèvres) and SRD (Sorégies). These networks operators cover over 98% of French sites and national electricity consumption.

1 Excluding non-interconnected territories (see electricity glossary for definition)

2 In the rest of the document, the study boundaries are shortened to the customers linked to the main distribution system

Contracts under regulated tariffs

Incumbent suppliers

Alternative suppliers Contrats

Contracts at market prices

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2. Customer segments and their respective weight

Typology of sites

13%

1%

15%

86%

33%

10%

42%

0,1%

Number of sites Electricity consumption

Large non residential sites Medium non residential sites Small non residential sites Residential sites

Sources: DSO, TSO, suppliers – Analysis: CRE

The market consists of four segments:

• Large non residential sites: sites whose subscribed power level is at least 250 kW. These sites include large industrial sites, hospitals, hypermarkets, large buildings, etc. (with an annual consumption generally over 1 GWh).

• Medium-sized non residential sites: sites whose subscribed power level is between 36 kVA and 250 kW. These sites correspond to SME premises, for example (with an annual consumption generally between 0.15 GWh and 1 GWh).

• Small non residential sites: sites whose subscribed power level is below 36 kVA. These sites correspond to the professional mass market (private professionals, trades, etc.). Their annual consumption is generally under 0.15 GWh.

• Residential sites: Residential sites whose subscribed power level is below 36 kVA. Their annual consumption is generally under 10 MWh.

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3. Status on September 30^th 2011

A) Summary tables

Synthesis in number of sites

Residential sites Non residential sites Situation (number of sites) September 30^th

2011

June 30^th 2011 September 30^th 2011

June 30^th 2011

Total number of sites 30,490,000 30,300, 000 4,909,000 4,907,000

• Sites under regulated tarifs 28,739,000 28,626, 000 4,209,000 4,202,000

• Sites with contracts at market

prices, among which : 1,751, 000 1,674,000 700,000 705,000

• Sites at TaRTAM all suppliers,

among which : – – – 7,220

o Incumbent suppliers – – – 1,790

o Alternative suppliers – – – 5,430

• Sites not at TaRTAM all

suppliers, among which : 1,751,000 1,674,000 700,000 698,000

o Incumbent suppliers 12,000 13,000 333,000 337,000

o Alternative suppliers 1,739,000 1,661,000 367,000 361,000

Alternative suppliers’ market

share within all sites 5.7 % 5.4 % 7.5 % 7.4 %

Sources: DSO, TSO, Incumbent suppliers– Analysis: CRE

Synthesis in annualized consumption

Residential sites Non residential sites Situation

(annualized consumption)

September 30^th 2011

June 30^th 2011 September 30^th 2011

June 30^th 2011

Total number of sites 143.2 TWh 142 TWh 293.5 TWh 295 TWh

Consumption contracted at

regulated tariffs 135 TWh 134,2 TWh 162 TWh 162 TWh

• Consumption contracted at

market prices. among which : 8.2 TWh 7.8 TWh 131.5 TWh 133 TWh

• Consumption at TaRTAM all

suppliers. among which : – – – 75 TWh

o Incumbent suppliers – – – 35.7 TWh

o Alternative suppliers – – – 39.3 TWh

• Consumption not at TaRTAM

all suppliers. among which : 8.2 TWh 7.8 TWh 131.5 TWh 58 TWh

o Incumbent suppliers ~ 0.1 TWh ~ 0 TWh 74.2 TWh 43 TWh

o Alternative suppliers 8.1 TWh 7.8 TWh 57.3 TWh 14 TWh

Alternative suppliers’ market

share within all sites 5.6 % 5.4 % 19.5 % 18.0 %

Sources: DSO. TSO. Incumbent suppliers– Analysis: CRE

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B) Evolution of the number of sites with contract at market prices Number of sites with contract at market prices

– NON RESIDENTIAL sites –

333 000

367 000

0 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000

oct.-10 nov.-10

déc.-10 janv.-11

fév.-11 mars-11

avril-11 mai-11

juin-11 juillet-11

août-11 septem

bre-11

Incumbent suppliers Alternative suppliers

, , , , , , , ,

Sources: DSO. TSO. Incumbent suppliers – Analysis: CRE

Number of sites with contract at market prices – RESIDENTIAL sites –

1 739 000 12 000

0 200 000 400 000 600 000 800 000 1 000 000 1 200 000 1 400 000 1 600 000 1 800 000

oct.-10 nov.-10

déc.-10 janv.-11

fév.-11 mars-11

avril-11 mai-11

juin-11 juillet-11

août-11 septembre-11

, , , ,

, ,

On September 30^th, 2011. approximately 700,000 non residential sites and 1,751,000 residential sites have contracts at market prices.

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C) Evolution of the annualized consumption of sites at market prices

The establishment of “ARENH” became effective on 1^st of July 2011 and is changing the market conditions. Between May 2011 and September 2011, alternative suppliers gained up to 7.2 TWh of new customers, most of which were already at market price within EDF and some at regulated tariffs, thus a 16% increase in portfolio volume. These movements have mostly been observed in the segment of large non-residential customers. However, no significant movement has been identified for residential sites, small and medium industrial sites.

Annualized consumption in number of sites - NON RESIDENTIAL sites -

Annualized consumption in number of sites - RESIDENTIAL sites -

Sources: Analysis: CRE 57

74

0 20 40 60 80 100 120 140

oct-10 nov-10 déc-10 janv-11 févr-11 mars-11 avr-11 mai-11 juin-11 juil-11 août-11 sept-11

Incumbent suppliers Alternative suppliers en TWh

57 74

0 20 40 60 80 100 120 140

oct-10 nov-10 déc-10 janv-11 févr-11 mars-11 avr-11 mai-11 juin-11 juil-11 août-11 sept-11

Incumbent suppliers Alternative suppliers en TWh

8 172 57

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000

oct -10 nov-10 déc -10 janv-11 f év r-11 mars-11 avr-11 mai-11 juin-11 juil-11 août -11 sept -11

Incumbent suppliers Alternative suppliers en GWh

8 172 57

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000

oct -10 nov-10 déc -10 janv-11 f év r-11 mars-11 avr-11 mai-11 juin-11 juil-11 août -11 sept -11

Incumbent suppliers Alternative suppliers en GWh

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D) Market shares on September 30^th, 2011. in number of sites

Share of sites for each type of contract on September 30^th, 2011

12%

5%

93%

82%

95%

8% 6%

0%

6%

7% ~ 0%

1%

94%

85%

All sites (35.3 M sites)

Large non residential sites

(34,000 sites)

Medium non residential sites (432,000 sites)

Small non residential sites

(4.4 M sites)

Residential sites (30.4 M sites)

Contracts under regulated tariffs

Contracts at market prices incumbent suppliers

Contracts at market prices alternative suppliers

On September 30th, 2011, around 7% of sites have contract at market prices and 6% have chosen an alternative supplier.

E) Market shares on September 30^th 2011. in electricity consumption Share of consumption for each type of contract on September 30^th 2011

15%

7%

20%

5%

65%

30%

6%

0%

8%

37%

~ 0%

33%

95%

85%

94%

All sites (437 TWh)

Large non residential sites

(181 TWh)

Medium non residential sites

(67 TWh)

Small non residential sites

(46 TWh)

Résidential sites (143 TWh)

Contracts under regulated tariffs

Contracts at market prices incumbent suppliers

Contracts at market prices alternative suppliers

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F) HHI Index

The Herfindahl-Hirschman Index³ is a measure of market concentration. The figure below shows this index of the level of concentration on the retail electricity market in terms of number of sites and consumption.

Evolution of the HHI index for each type of contract in number of sites and in consumption

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000

All sites (35.2 M sites) (437 TWh)

Larges non residential sites (34, 000 sites) (181 TWh)

Medium non residential sites (432 000 sites) (67 TWh)

Small non residential sites (4.4 M sites) (46 TWh)

Residential sites (30.3 M sites) (143 TWh)

number of sites

consumption

Low concentrated market Concentrated market Highly concentrated market

Sources: Analyse CRE

G) Data on the ARENH system

The law of December 7, 2010 established the system of regulated access to nuclear power history (ARENH), which gives the right to any provider to purchase electricity from nuclear power from EDF at regulated price. This electricity is only intended to supply end customers located in France.

The implementing regulations define the terms of access to ARENH: the Decree of April 28, 2011 describes the procedure for a supplier to be declared and eligible for the ARENH, then make the request and the principle of an additional price that ensures financial neutrality for EDF and the supplier if the amount allocated is higher than the supplier's ex post found.

The volume of ARENH allocated to a supplier depends on the consumption forecast, measured on a number of hours set by the decree of May 17, 2011, its portfolio of customers in the delivery period to come.

The delivery periods are twelve months with biannual desks that allows providers to review the volume of ARENH necessary to cover the consumption of their customers, under the constraints of monotony and a total volume not exceeding the 100 TWh per year for all suppliers.

The delivered product is defined by the decree of May 16, 2011 and it can be of two forms, depending on the supplier’s supplies to customers within profiles PRO and RES, known as small consumers

3The HHI equals the sum of the actors’ market shares squared, and measures market concentration (the higher the index, the more concentrated the market). Generally, a market is considered to be weakly concentrated if its HHI is below 1,000, and highly concentrated if it is over 1,800.

Given the specificities of the gas market, this index should only be used cautiously as an indicator of the competition level.

Indeed, regarding the gas market, concentration and competition are not as directly linked as in most markets.

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(category C2) or clients outside of this category, known as major consumers and buyers for losses (C1). Until 2015, the product delivered to the category C1 is flat, while the product delivered to the category C2 is modulated.

Total ARENH volume previewed for the first delivery period July 2011- June 2012

The list of the suppliers (33 suppliers in total) that asked for ARENH is available on the CRE’s website:

http://www.cre.fr/media/fichiers/marches/liste-des-fournisseurs-ayant-signe-un-accord-cadre-avec- electricite-de-france

Small customers (C2) Big customers (C1) Small customers (C2)

Big customers (C1)

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H) Active suppliers on September 30^th, 2011

List of national active suppliers declared at CRE⁴ on September 30^th, 2011

Suppliers. trademark(s)

Large non residential sites

Medium non residential sites

Small non residential sites

Residential sites

Alternative suppliers⁵

Atel Energie

Direct Energie

Edenkia

E.ON Energie

Enercoop

EGL

Endesa Energia

Enel France

Energem

GDF Suez

Lampiris

VATTENFALL

4 The list of suppliers and trademarks is an extract from CRE’s suppliers list updated on November 17^th 2011.

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Suppliers, trademark(s) Large non residential sites

Medium non residential sites

Small non residential sites

Residential sites

Iberdrola

Oddo Power

Planète UI

Poweo

SNET

Incumbent suppliers⁶

Alterna

EDF

GEG Source

d’Energies

Sources: DSO. TSO. energie-info – Analysis: CRE

The table lists suppliers who. in the last day of the quarter of the observatory and for each segment of customers:

• are registered in the search engine of suppliers by zip code. online on the website www.energie-info.fr ⁷

• are national i.e. they did declare offering contracts in at least 90% of the French cities connected to the electricity network (excluding Corsica);

• are actives if they fulfil at least one of these conditions:

- they supply at least one site with integrated contract.

- they are a balancing responsible entity of at least one site with a transmission contract/distribution contract.

- they are a balancing responsible entity and they delivered part of a site consumption during the last quarter.

Suppliers who did not wish to appear in the suppliers lists or did not declare offering contracts in more than 90% of the French cities for at least a segment of customers are not quoted.

On September 30^th, 2011 about 160 local suppliers are active within the territory including the incumbent suppliers (local distribution companies⁸). These suppliers operate locally or regionally and offer contracts to one or more segments of customers.

6 See electricity glossary for incumbent supplier definition.

7 Online since September 2008, the search engine is built from the information volontarily provided by suppliers.

8 See electricity glossary for local distribution company.

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4. Dynamic analysis: 3^rd Quarter of 2011

A) Summary table for the last two quarters

The gross sales per month are equal to the number of sites which have signed a contract within the given month (sites which have been connected or sites which have switched to another supplier). The gross sales at market prices or regulated tariffs are a relevant indicator for measuring the commercial competitiveness of the different suppliers. in terms of acquisition of new sites.

Residential sites Non residential sites During quarter

(number of sites)

3^rd Quarter 2011

2^nd Quarter 2011

3^rd Quarter 2011

2^nd Quarter 2011 Total gross sales, including : 1 638 000 1 294 000 161 000 163 000

o Incumbent suppliers 1 448 000 1 146 000 149 000 154 000

o Alternative suppliers 190 000 148 000 12 000 9 000

Alternative suppliers’ market share within

total gross sales 11,6 % 11,4% 7,4 % 5,5 %

Sources: DSO, TSO, Incumbent suppliers – Analysis: CRE

Technical information: gross sales data are rounded, but alternative supplier’s market are calculated from real figures.

B) Gross sales for the last semester

Decomposition of monthly gross sales

64 000 576 000

0 100 000 200 000 300 000 400 000 500 000 600 000

Apr-11

Mai-11 Juin-11 Juil-11 Aout-11 Sept-11

64 000 576 000

0 100 000 200 000 300 000 400 000 500 000 600 000

Apr-11

Mai-11 Juin-11 Juil-11 Aout-11 Sept-11

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Decomposition of gross sales by provider type during the 3^rd quarter of 2011

91%

24%

9%

76%

Connections (total 1,541,000)

Suppliers switch (total 258,000)

Note: During the 3^rd quarter of 2011, 9% of 1,541, 000 connections originated from alternative suppliers.

C) Switching rate

According to ERGEG’s definition, switching supplier is defined as "the action through which a customer changes supplier". More detailed: A switch is essentially seen as the free (by choice) movement of a customer (defined in terms of an overall relationship or the supply points and quantity of electricity or gas associated with the relationship) from one supplier to another. Switching activity is defined as the number of switches in a given period of time.

Switching and moving: When a customer moves, a switch should only be recorded if a customer switches to a supplier other than the supplier which is incumbent in the area where he/she is moving to.

Changes of tariffs: A change of tariff with the same retailer is not equivalent to a switch (this exclusion extends to: changing to a new tariff; changing from a regulated to a non-regulated tariff with the same supplier or a subsidiary of the same supplier).

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Switching rate evolution for each type of contract

0,00%

0,20%

0,40%

0,60%

0,80%

1,00%

1,20%

1,40%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2008 2009 2010 2011

Households Industrial sites All sites combined

Source : Analysis: CRE

Note: During the third quarter of 2011, 1.2% of the residential sites either:

- changed supplier

- was connected by choosing an alternative supplier

- was connected by choosing an incumbent suppliers other than the supplier which is incumbent in the area where he/she is moving to.

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5. Electricity retail prices

A) Regulated tariffs costs covered by a bill as of September 30^th 2011

* According to the Eurostat definitions on types of clients:

Dc : Household client with consumption of 2500-5000 MWh Ib : Industrial client with consumption of 20-500 MWh Ig : Industrial client with consumption of 20 000-70 000 MWh

**Note: VAT is excluded from the costs for the yellow tariffs and green A tariffs.

Type of client Ib* at yellow tariff

8,6%

2,9%

4,1%

40,8%

43,6%

Type of client Ig* at green tariff*

24,3%

56,5%

1,8%

6,2% 11,2%

Type of client Dc* at bleu residential tariff

6,3%

2,2%

37,0%

33,2%

15,0%

Network(TURPE 3) Supply

CTA Local taxes CSPE VAT

8,6%

2,9%

4,1%

40,8%

43,6%

8,6%

2,9%

4,1%

40,8%

43,6%

24,3%

56,5%

1,8%

6,2% 11,2%

24,3%

56,5%

1,8%

6,2% 11,2%

Type of client Dc* at bleu residential tariff

6,3%

2,2%

37,0%

33,2%

15,0%

CTA Local taxes CSPE VAT Type of client Dc* at bleu residential tariff

6,3%

2,2%

37,0%

33,2%

15,0%

CTA Local taxes CSPE VAT

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B) Electricity retail regulated tariffs evolution

Date Blue tariffs Yellow tariffs Green tariffs

16th August 2008 + 2% + 6% + 8%

15th August 2009 * + 1,9% + 4% + 5%

15th August 2010 * + 3,2% + 4,5% + 5,5%

1st July 2011 + 1,7% + 3,2% + 3,2%

*Average increase taking into account the structural tariffs’ movement.

Source : Analysis: CRE Evolution of the regulated tariffs (no taxes included)

(local taxes, CSPE, VAT) in Euros 2010)

On the basis on the EDF client portfolio at the end of 2010

40 50 60 70 80 90 100 110 120 130

janv.-94 janv.-95 janv.-96 janv.-97 janv.-98 janv.-99 janv.-00 janv.-01 janv.-02 janv.-03 janv.-04 janv.-05 janv.-06 janv.-07 janv.-08 janv.-09 janv.-10 janv.-11

Time Price(€₂₀₁₀/MWh)

Blue Residential Blue Professional Yellow Green Separation of CSPE from

tariffs (-3,7€₂₀₁₀/MWh)

Separation of CTA from tariffs (-1,3€2010/MWh)

Evolution of the regulated tariffs (no taxes included) (local taxes, CSPE, VAT) in Euros 2010)

On the basis on the EDF client portfolio at the end of 2010

40 50 60 70 80 90 100 110 120 130

janv.-94 janv.-95 janv.-96 janv.-97 janv.-98 janv.-99 janv.-00 janv.-01 janv.-02 janv.-03 janv.-04 janv.-05 janv.-06 janv.-07 janv.-08 janv.-09 janv.-10 janv.-11

Time Price(€₂₀₁₀/MWh)

Blue Residential Blue Professional Yellow Green Separation of CSPE from

tariffs (-3,7€₂₀₁₀/MWh) Separation of CTA from tariffs (-1,3€2010/MWh)

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C) Evolution of a regulated tariff annual bill

The annual bill is given for an average consumer at Blue tariff Base for 6kVA power level subscribed (2 400 KWh of consumption, and for an average consumer at Blue tariff Peak/Off Peak for 9 kVA power level subscribed (8 500 KWh consumption, 54% Peak and 46% Off Peak). The bill covers the regulated tariff, the CSPE, the CTA, the local taxes and the VAT.

Evolution of an annual electricity bill for an average consumer at tariff Base 6 kVA

0 50 100 150 200 250 300 350 400

15/08/2006 15/08/2007 15/08/2008 15/08/2009 15/08/2010 01/01/2011 01/07/2011

Evolution of an annual electricity bill for an average consumer at tarif Peak/OffPeak 9 kVA

0 200 400 600 800 1000 1200

15/08/2006 15/08/2007 15/08/2008 15/08/2009 15/08/2010 01/01/2011 01/07/2011

€ TTC/an

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D) Price comparison as of September 30^th 2011

There are 2 types of offers that exist on the market:

- Regulated tariffs

- Market prices, either indexed to the regulated tariffs, either fixed prices independent from the regulated tariffs.

Price comparison for a 6kVA Base consumer

*Fixed price offers for the validity period of the contract and revised once the contract expired.

** Prices indexed to the regulated tariffs, except the Off Peak.

Comparaison for a household customer with the following characteristics :

• Power level of 6 kVA,

• Annual consumption of 2 400 KWh Base

• Based in Paris

Bill VAT included, discounts excluded. Source: Comparateur d’offres energie-info

Supplier’s logo:

Name of offer: Regulated price Price difference

to the regulated prices Regulated price Annual bill estimation 363€/year

Source: Comparateur d’offres énergie-info

- 5%

Domelia Base

351 €/year

- 4%

Offre Directe

358€/year

- 3%

Objectif élec Domestique

363 €/year Tarif règlementé

363€/year

*Dolce Vita Prix fixe 1 an ou 2 ans

0% + 3,0%

374 €/year

+ 4,4%

379 €/year 391 €/year

+ 7,7%

***Mon contrat Electricité 2011

409 €/year

+ 12,7%

- 3,3%

348 €/year

**Offre Electerocolo de Planète Oui

- 1,4%

Planet Elec

Regulated price

100% Energie Verte

*AlpEnergie prix fixe 1 an ou 2

ans Idea Vert

360 €/year

- 0,8%

Offre 100%

Pur Jus

Domelia Alpenergie 26 %

20 %

100 %

9 %

100 % 100 % 21 %

100 %

9 %

- 4,1%

% of green energy _{100 %} 0 %

Comparaison for a household customer with the following characteristics :

• Power level of 6 kVA,

• Annual consumption of 2 400 KWh Base

• Based in Paris

Bill VAT included, discounts excluded. Source: Comparateur d’offres energie-info

Supplier’s logo:

Name of offer: Regulated price Price difference

to the regulated prices Regulated price Annual bill estimation 363€/year

Source: Comparateur d’offres énergie-info

- 5%

Domelia Base

351 €/year

- 4%

Offre Directe

358€/year

- 3%

Objectif élec Domestique

363 €/year Tarif règlementé

363€/year

*Dolce Vita Prix fixe 1 an ou 2 ans

0% + 3,0%

374 €/year

+ 4,4%

379 €/year 391 €/year

+ 7,7%

***Mon contrat Electricité 2011

409 €/year

+ 12,7%

- 3,3%

348 €/year

**Offre Electerocolo de Planète Oui

- 1,4%

Planet Elec

Regulated price

100% Energie Verte

*AlpEnergie prix fixe 1 an ou 2

ans Idea Vert

360 €/year

- 0,8%

Offre 100%

Pur Jus

Domelia Alpenergie 26 %

20 %

100 %

9 %

100 % 100 % 21 %

100 %

9 %

- 4,1%

% of green energy _{100 %} 0 %

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Price comparison for a 9kVA Peak/Off Peak consumer

*Fixed price offers for the validity period of the contract and revised once the contract expired.

** Prices indexed to the regulated tariffs, except the Off Peak.

- 5,0%

Domelia HC

1041€/year

- 4,0%

Offre Directe HP/HC

1031 €/year 1069 €/year

**Offre Electrecolo de Planète OUI HP/HC

- 1,5%

Objectif élec Domestique Class.+double tarif

1085€/year Tarif règlementé

Regulated tariff

1085 €/year

*Dolce Vita Prix fixe 1 an ou 2 ans HP/HC

100% Energie Verte HP/HC

0% + 3,8%

AlpEnergie HP/HC

1126 €/year

Idea Vert HC

+ 5,2%

1142 €/year 1180 €/year

+ 8,7%

***Mon contrat Electricité 2011 HC

1196 €/year

+ 10,2%

Comparaison for a household customer with the following characteristics:

• Powel level of 9 kVA,

• Annual consumption of 8 500 KWh Peak/OffPeak

• Based in Paris

Bill VAT included, discounts excluded Source: Comparateur d’offres énergie-info

Offre 100%

Pur jus HP/HC

Planet Elec HP/HC

*AlpEnergie prix Fixe HP/HC 1 an ou 2 ans

+ 5,4%

1144 €/year

20 % 26 % 100 % 9 %

100 % 100 % 21 %

100 %

100 % 9 %

Supplier’s logo:

Name of offer: Regulated tariffs Price difference to the

regulated tariff Regulated tariff Annual bill estimation 1085€/year

% of green energy _{100 %} 0 %

- 5,0%

Domelia HC

1041€/year

- 4,0%

Offre Directe HP/HC

1031 €/year 1069 €/year

- 1,5%

1085 €/year

0% + 3,8%

AlpEnergie HP/HC

1126 €/year

Idea Vert HC

+ 5,2%

1142 €/year 1180 €/year

+ 8,7%

1196 €/year

+ 10,2%

• Based in Paris

Offre 100%

Pur jus HP/HC

Planet Elec HP/HC

+ 5,4%

1144 €/year

20 % 26 % 100 % 9 %

100 % 100 % 21 %

100 %

100 % 9 %

Supplier’s logo:

% of green energy _{100 %} 0 %

- 5,0%

Domelia HC

1041€/year

- 4,0%

Offre Directe HP/HC

1031 €/year 1069 €/year

- 1,5%

1085 €/year

0% + 3,8%

AlpEnergie HP/HC

1126 €/year

Idea Vert HC

+ 5,2%

1142 €/year 1180 €/year

+ 8,7%

1196 €/year

+ 10,2%

• Based in Paris

Offre 100%

Pur jus HP/HC

Planet Elec HP/HC

+ 5,4%

1144 €/year

20 % 26 % 100 % 9 %

100 % 100 % 21 %

100 %

100 % 9 %

Supplier’s logo:

% of green energy _{100 %} 0 %

- 5,0%

Domelia HC

1041€/year

- 4,0%

Offre Directe HP/HC

1031 €/year 1069 €/year

- 1,5%

1085 €/year

0% + 3,8%

AlpEnergie HP/HC

1126 €/year

Idea Vert HC

+ 5,2%

1142 €/year 1180 €/year

+ 8,7%

1196 €/year

+ 10,2%

• Based in Paris

Offre 100%

Pur jus HP/HC

Planet Elec HP/HC

+ 5,4%

1144 €/year

20 % 26 % 100 % 9 %

100 % 100 % 21 %

100 %

100 % 9 %

Supplier’s logo:

% of green energy _{100 %} 0 %

(22)

The wholesale electricity market

1. Introduction

A) Main steps in the French wholesale electricity market

- November 2000: CRE validated the initial version of the Balancing Responsible Entity (BR) contract

- Early 2001: first purchases of losses on the market by RTE

- May 2001: first OTC quotations published regarding the French electricity market - September 2001: first virtual power plant auctions set up by EDF (VPP)

- November 2001: launch of the Powernext Day-ahead market - June 2004: launch of the Powernext Futures market

- July 2004: first purchases of losses on the market by the distribution system operator (ERDF) - January 2006: implementation of explicit capacity auctions on interconnections (except for

Switzerland)

- November 2006: launch of the market coupling between France, Belgium and the Netherlands

- July 2007: launch of Powernext Intraday and Continuous markets

- March 2009: a sixth broker active on the French electricity wholesale market

- April 2009: Merger of Powernext and EEX - launch of EPEX Spot and EPD for futures contracts

- November 2010: Market coupling with France, Belgium, Netherlands, Luxembourg and Germany

- July 2010: first ARENH subscription.

B) Balance of the French wholesale market

The graph below shows energy flows between the different upstream and downstream segments of the French wholesale market in the third quarter 2011. It shows flows injected and delivered as well as the transactions on the intermediated French wholesale market.

Source : RTE – data [Q2] and Q3 2011 - Analysis : CRE NB: due to rounding, numbers may not match totals

Generation

excluding VPPs and ARENH 93 TWh

VPP generation 10 TWh

Physical injections into grids (121 TWh)

Physical withdrawals from grids (121 TWh)

Imports 3 TWh

Exports 18 TWh End-user consumption 97 TWh including:

• customers at regulated tariffs

• customers at market prices

• self consumption

• pumping

Grid losses purchased on markets 6 TWh Transactions on the intermediated

market: 176 TWh

[112TWh]

[10 TWh]

[3TWh]

[163 TWh]

[126 TWh]

[99 TWh]

[7 TWh]

[20 TWh]

[126 TWh]

ARENH generation 15 TWh

[-]

Generation

Imports 3 TWh

• pumping

market: 176 TWh

[112TWh]

[10 TWh]

[3TWh]

[163 TWh]

[126 TWh]

[99 TWh]

[7 TWh]

[20 TWh]

[126 TWh]

[-]

Generation

Imports 3 TWh

• pumping

market: 176 TWh

[112TWh]

[10 TWh]

[3TWh]

[163 TWh]

[126 TWh]

[99 TWh]

[7 TWh]

[20 TWh]

[126 TWh]

[-]

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2. Wholesale market activity in France

A) Activity in the over-the-counter market (OTC)

A great part of the wholesale activity in the electricity market takes place over-the-counter (OTC), through direct transactions or through intermediaries (brokers and trading platforms). The total volume of OTC transactions is not public. CRE issues aggregated volumes on transactions through intermediaries (see: Electricity indicators).

The following graph shows block exchange nominations of companies to RTE. These numbers do not represent the volume of transactions during the period, but net physical deliveries between companies resulting from transactions in the OTC market.

Volume of net deliveries resulting from OTC transactions

0 2 4 6 8 10 12 14 16 18 20 22 24 26

Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11

TWh

Sources: TSO – Analysis: CRE

Volumes of block exchange nominations resulting from OTC transactions were of 66.8 TWh in 2011 Q3, a 4% decrease compared with the previous quarter and a 2% increase compared with the same quarter last year. These volumes represented about 67% of national consumption in the third quarter 2011, similar to the previous quarter, but above the same period last year (63%).

B) Trading trends on the French intermediated market

The French intermediated market covers trading executed on organised markets and brokerage venues (intermediated OTC). Trends commented below can be observed in the section Development of trading in France of the indicators published by CRE.

(24)

Overview of trading in the third quarter 2011

Traded volumes by product on the French wholesale electricity markets

0 100 200 300 400 500 600 700 800

2008 2009 2010 T1-T3 2010 T1-T3 2011

Volumes in TWh

Intraday Day-ahead Week-end Weekly Monthly Quarterly Yearly Others 696 TWh

754 TWh

656 TWh

502 TWh 534 TWh

Q1: 197 TWh Q2: 168 TWh Q3: 137 TWh

Q1: 195 TWh Q2: 163 TWh Q3: 176 TWh

Sources: brokers, EPEX Spot France, EPD France; Analysis: CRE

Spot products

21 TWh were exchanged on the spot market over the third quarter 2011 through around 21,000 transactions. Trading increased compared with the previous quarter in terms of volumes (+3%) and more significantly in terms of number of trades (+17%). Compared to 2010 in the same period, spot products increased sharply: +30% in volumes and +66% in liquidity.

On the intraday market, volumes declined slightly (0.22 TWh, -3%) whilst the number of transactions increased to 5,600. The intraday market represents only 1% of total traded volumes on the spot.

On the day-ahead market volumes increased compared with the previous quarter (+4%) and 2010 (+29%). This is due to a significant increase on the OTC market (+13%) when activity on the exchange stagnated. As a consequence, the share of spot volumes traded on the exchange decreased again to 67%, against 75% in 2010 Q3.

Futures and forwards⁹

Over the third quarter 2011, 120 TWh of futures products¹⁰ were traded, similar to the previous quarter and 19% above the same period in the previous year. Similarly, liquidity for these products also remained steady compared to 2010 Q2 (around 6,000 transactions), a 41%-increase compared to the same period in 2010.

Trading is mostly performed on brokerage venues since EPD France only represents 6% of volumes and transactions. Thus, the decline in trading on the exchange compared to the previous quarter

9 All trends described in the comments are related to futures and forwards of the “Développement du négoce en France” section of the indicators of wholesale electricity markets.