EDF Signs Letter of Intent with GravitHy for Nuclear Power Allocation Partnership

EDF has signed a letter of intent with GravitHy to conclude a partnership for the allocation of nuclear power segments. This long-term commitment and upfront payment will guarantee the metallurgical company GravitHy a supply of available, low-carbon, and competitive electricity. These conditions are essential for producing steel from low-carbon electrolytic hydrogen.

The letter of intent brings together EDF, the electricity producer and sole operator of the French nuclear fleet, and GravitHy, the promoter of a low-carbon Direct Reduced Iron (DRI) production plant in Fos-sur-Mer. The principle is to replace the fossil fuels used in the traditional DRI process with hydrogen obtained by water electrolysis, using decarbonized electricity. This reduced iron is then offered to steelmakers or any steel user.

CAPN, New Industrial Partnerships

As part of the policy for selling nuclear power following the end of the ARENH scheme on January 1, 2026, EDF has implemented a new commercial policy, particularly towards industrialists for the implementation of long-term contracts, beyond the time horizons already available on electricity exchanges[1]. Luc Rémont, announcing this new policy, stated that EDF would be “a responsible and committed trader.” The goal is twofold. Firstly, it is to ensure a sharing of the risks and costs associated with operating the nuclear asset between EDF and consumers, mainly electro-intensive (EI) and hyper electro-intensive (HEI) industries for whom the cost of electricity is a structural component of their production cost. Secondly, it is to guarantee long-term access to competitive electricity whose price reflects the actual production costs of the existing nuclear fleet and meets the continuity requirements of these consumers’ processes.

Specifically, these Nuclear Power Allocation Contracts (CAPN) are “industrial partnership contracts that make available a share of the power from the operating nuclear fleet to electro-intensive enterprises, for a duration of more than 10 years, involving a sharing of these costs and risks on the volumes actually produced by this fleet. The price reflects the real production costs of the existing nuclear fleet and includes an upfront payment”[2].

It is interesting to note that EDF established, during the construction of the historic fleet, production allocation contracts for 10 production tranches in partnership with European energy companies[3]. This share remained modest, around 1.5 GW in total:

• Fessenheim 1-2: EnBW (17.5%) and the consortium of Swiss electricians CNP including Alpiq, Axpo, and BKW (15%)
• Cattenom 1-2: EnBW (5%)
• Bugey 2-3: Electricity of Laufenbourg 1 (17.5%)
• Tricastin 1 to 4: Electrabel 2 (12.5%)
• Chooz B1-B2: EDF Luminus, an EDF subsidiary in Belgium (3.3%)

And that makes three!

On April 11, EDF announced it had signed a new letter of intent with GravitHy, aimed at producing low-carbon reduced iron for steelmakers. This is the third after those signed with ArcelorMittal and a confidential industrialist. These commitments are expected to lead to contract signings “before the end of 2025 and represent a supply of about 10 TWh/year,” stated EDF’s Executive Director of Customer, Services & Territories, Marc Benayoun, before the Senate inquiry commission[4] on electricity prices.

Partnerships in Service of Industry Decarbonization

GravitHy, with its plant project in Fos-sur-Mer, is committed to the production of low-carbon reduced iron using decarbonized electrolytic hydrogen for steel production. The steel industry is a highly competitive market where some American or Asian factories benefit, without particular financial counterparts, from supply prices at the site of $15 to $55/MWh—a supply statistically very carbon-intensive. However, the decarbonization of the sector is essential to achieving climate goals: emissions from the metallurgical industry account for about 8% of global greenhouse gas emissions[5], most of which are incorporated into imported manufactured products.

Thus, let us hope that such industrial partnerships coupled with a matured carbon border adjustment mechanism[6] (addressing the risk of leakage) and the France 2030 aid plan will form a set of instruments conducive to the reindustrialization and reduction of the country’s carbon footprint.■