French electricity giant EDF has agreed to curb electricity prices for the country’s most energy-intensive factories to make them more competitive than their counterparts in Germany and North America, where power prices are lower.

State-controlled EDF has signed a memorandum of understanding with the Exeltium consortium of companies which will allow the electro-intensive companies of the consortium to regain competitiveness, following the sudden drop of market prices. Under this MoU, the price paid for electricity supply will first be lowered, before being increased again after five years, depending on the evolution of the electricity market price. The mechanism is aimed to make the contract more flexible and has been conceived in such a manner as not to compromise its economic balance. The others parameters of the contract (volume delivered, opt-out options and industrial risk responsibility) will be not modified. According to EDF, this measure will imply a retroactive price cut from January 1, 2014. Exeltium has joined 27 electro-intensive industrial companies since 2008, including chemical firm Solvay, steel maker ArcelorMittal , and industrial gases group Air Liquide, for which electricity can account for as much as half of production costs.