Dams: “European law allows hydroelectricity to be excluded from the competitive market”

D aams play a central role in our energy system. They produce flexible, storable, and very low-carbon electricity, essential to support intermittent renewable energies such as solar and wind power. But their usefulness goes far beyond that: flood control, irrigation, drinking water, navigation, tourism, etc. These infrastructures are essential, and their value will only increase with climate change. They are also very sensitive from a safety perspective: a dam failure can cause a human and environmental disaster .

Their ownership, with a few exceptions, remains public. But their operation, once handled almost exclusively by EDF, has fragmented since the opening to competition. Highly profitable concessions, such as those on the Rhône, have been transferred to the Compagnie Nationale du Rhône, a subsidiary of Engie. This group also owns the Société Hydroélectrique du Midi in the Pyrenees. EDF now manages only 70% of the national hydroelectric fleet and has become a privately owned multinational.

In 2015 and 2019, the European Commission opened two legal proceedings against France for non-compliance with competition rules. In response, Paris stalled: relaunching calls for tenders for such strategic facilities was unanimously rejected by the political class. But this wait-and-see approach, while avoiding the worst, prevents any long-term vision and hinders investment in a key sector.

However, an alternative exists: European law allows hydroelectricity to be excluded from the competitive market if it is operated by the State or a local authority, either directly (under state control) or through a controlled public company (quasi-state). In this context, a public monopoly could sell electricity at a regulated rate, indexed to actual production costs. This would guarantee users stable prices and offer the operator financial security that would encourage lower costs and investment, thanks to better financing conditions.

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