Energy supply difficulties: what mechanisms has the State put in place?

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The consequences of the war in Ukraine are far-reaching and have particularly impacted the energy sector in France. This is compounded by maintenance-related shutdowns of several nuclear reactors.

In this context, the government has established a series of regulatory mechanisms to secure the supply of businesses nationwide. This article outlines the primary mechanisms targeting producers and suppliers, as well as businesses themselves, which may be asked to make certain efforts. At the same time, the government has also implemented several support mechanisms for businesses (link to article 1).

Natural gas load shedding or interruptibility

The government has established three emergency measures that allow natural gas suppliers to reduce or even cut off a consumer's natural gas supply:

• Load shedding

Energy Code, Articles R. 434-1 to R. 434-7: Natural gas consumption load shedding (Book IV, Title III, Chapter IV)

Newly introduced by Decree No. 2022-495 of April 7, 2022, the natural gas load shedding mechanism is an emergency measure designed to significantly reduce or completely cut off a consumer's natural gas supply.

A load shedding order is sent to the affected consumers, who must comply within two hours.

This measure applies to consumers who used more than 5 GWh of natural gas during the previous calendar year. Following a response to a survey sent by the transmission or distribution system operator to which they are connected, the consumer is placed by the prefect on a list that determines the order of priority for load shedding.

The prioritization is defined as follows:

ListLoad shedding priorityList 1: consumers engaged in electricity production via a power plant with a capacity exceeding 150 MW1 (up to the supply level that could jeopardize the security of electricity supply)List 3: consumers not included on lists 1 and 2 who are likely to suffer major economic consequences in the event of a reduction or cessation of their natural gas consumption2 (up to the supply level beyond which these major economic consequences are likely to be observed3 (beyond the supply level mentioned above)Other consumers4

Note: List 2 concerns consumers performing public interest missions related to meeting the nation's essential needs, particularly in terms of security, defense, and health, or providing heating services for sites performing these public interest missions or for housing, provided that these consumers are unable to switch to fuels other than natural gas to provide the heating service.

• Guaranteed interruptibility

Order of December 17, 2019, regarding the interruptibility of natural gas consumption

Through Law No. 2022-158 of August 16, 2022 (the Purchasing Power Act), the government has extended the paid "guaranteed" interruptibility mechanism to consumers ⁽¹⁾ connected to gas distribution networks, rather than solely to consumers connected to the transmission network, thereby increasing the potential flexibility that can be contracted by natural gas transmission system operators.

Consequently, the decree of December 17, 2019, regarding natural gas consumption interruptibility was amended on October 3, 2022.

The criteria for eligibility for such a contract have evolved. It may now apply to any consumption site connected to either the transmission or distribution network that meets the following three criteria:

• the delivery point serving the consumption site supplies gas exclusively to that site;
• consumption exceeds 5,000 MWh/year;
• no electricity production activity using natural gas is carried out at the consumption site.

When a "guaranteed" interruptibility contract is concluded, the consumer must commit to:

• having an interruptible capacity of at least 20 MWh/day;
• submitting to the relevant network operator, no later than every Thursday, the minimum daily consumption schedule planned for the consumption site for each day of the following two calendar weeks.

The distribution network operator, upon request from the transmission system operator, shall transmit the activation order to the consumer no later than 4:00 PM for activation at 6:00 AM the following day. The consumer must then send an acknowledgment of receipt of the activation order within two hours to the network operator to which the consumption site is connected. The duration of interruptible capacity activation cannot be less than 24 hours and cannot exceed 240 hours per year.

• Secondary interruptibility

Decree of December 17, 2019, regarding natural gas consumption interruptibility

Approved consumers ⁽¹⁾ for a consumption site who wish to sign a secondary interruptibility contract must have an interruptible capacity of at least 40 MWh/day; consumers connected to the distribution network must also have a reference annual consumption exceeding 5,000 MWh/year. They must commit to acknowledging receipt of an activation order within a maximum of 12 hours and responding to it within a maximum of 24 hours.

A secondary transmission interruptibility contract is concluded for a maximum duration of four years, terminable annually before April 1. A secondary distribution interruptibility contract is concluded for a duration of one year, renewable up to three times for an additional year. They take effect on the April 1 following the date of signature.

This mechanism remains unchanged.

(1): Regardless of the mechanism, any consumer wishing to sign an interruptibility contract with the network operator for a consumption site must first have received approval from that network operator. Obtaining this approval is subject to the presence of a metering device capable of daily consumption readings and the consumer's ability to respond to activation orders for interruptible capacity. Approval is granted for a period of 4 years and may be withdrawn by the operator in the event of multiple failures to pass the activation order transmission test.

Securing electricity supply

Energy Code Articles L. 143-4 to L. 143-6-2: Specific provisions for electricity and gas (Book I, Title IV, Chapter III, Section 2)

Until August 17, 2026, the minister in charge of energy may in the event of a serious threat to the security of electricity supply, by decree, in particular:

• order operators of natural gas-fired electricity generation facilities to restrict or suspend the operation of their facilities (only in the event of a threat to natural gas supply)
• requisition the services responsible for operating these facilities so that they function solely according to the directives and under the control of the operator designated by the minister (in the event of a threat to both natural gas AND electricity supply).

Exclusions: cogeneration facilities for which a mandatory electricity purchase contract is in force, or which supply thermal energy to a heating or cooling distribution network classified as an industrial and commercial public service

Within this same framework, a mechanism is also provided to require the switching off, in the event of grid strain, of all illuminated advertisements visible from public roads (illuminated advertisements, advertisements using posters lit by projection or transparency, digital advertisements in and outside built-up areas, on roads open to public traffic, as well as in airports, train and bus stations, and public transport stops).

Note: this is an emergency mechanism that supplements the obligation to switch off illuminated advertisements between 1 a.m. and 6 a.m., as defined by the Environmental Code.

Energy Code Articles L. 321-6 to L. 321-17-2: Missions of the transmission system operator (Book III, Title II, Chapter I, Section 2)

During periods of high strain on the system, the public electricity transmission system operator has the following options:

• Call upon all consumption, production, and storage demand-response capacities valued by adjustment operators that are technically available and unused;
• Call upon all unused and technically available power from consumption sites that use backup electricity production or storage facilities of more than 1 MW ⁽²⁾. Operators of the relevant production and storage facilities may not refuse this request.

(2): the implementation procedures for this mechanism are currently under public consultation

Off-peak/peak hour switching during the winter period

Order of September 22, 2022, regarding metering devices on public electricity distribution networks

This order stipulates that for metering devices provided to users of public distribution networks who have subscribed to a supply offer that manages daily controllable contact (the peak/off-peak principle), public electricity distribution network operators will temporarily deactivate the closing of the controllable contact between 11:00 a.m. and 3:30 p.m.

This daily deactivation, which cannot exceed two hours, begins before 2:00 p.m.

This mechanism is applicable during the period from October 1 to May 15, 2023.

All regulatory provisions regarding these mechanisms have not yet been published. The information provided in this article is subject to adjustment based on decisions made by the State and the evolution of the situation.

Finally, a scheduled load-shedding mechanism has been devised by the electricity transmission system operator (RTE) and the distribution network operator (Enedis) to prevent a widespread blackout. This technical measure has not been detailed in this article.