but who are likely to vote with their feet

Energy news: where is the call for tenders of the Dunkirk consortium, which you are one of the founders (1)

Olivier Monfort: It is not yet launched. Next seven founding members, about 60 companies are interested to participate. It must therefore first integrate all of the programs for the purchase of these companies and consolidate applications making global tender. The goal is to have a response to the invitation to tender in the fall for an effective implementation next year.

E.n.: In wait you in which case your group, Solvay

O.M.: We are concerned by Dunkirk primarily for our work site, in the Jura, which consumes 0.5 of French electricity. We participated in the discussions that led to the creation of Dunkirk for the attention of public authorities on the evolution of the market risk. Dunkirk will not be a classic client since its members must meet eligibility criteria (2) so that commit to buy over fifteen years and invest. Should thus pay aware in advance, the consortium to operate as a kind of reserve capacity (3). The objective is to obtain a price linked to the cost as if we were co-producers, i.e. a financial proposal related to nuclear cost and not at the price spot of Exchange equilibrium between producers. We pass the fingers to do this, but statements of EDF on its nuclear cost us concern. In the first half of 2005, EDF announced between 25 and 30 EUR/MWh; mid-2005, it was 35 EUR/MWh; May 5, 2006, 47 euro/MWh. However, the old contracts with EDF started all by a "2" and they have never left this exhausted company! Furthermore, in Finland (4), the members of the consortium have less than 30 EUR/MWh. The speech of EDF looks like a last on condition that we do not like and reach such a level of price would not be a suitable response to the application or the commitments of the Government. Industry, by creating this consortium, and the Government, overseeing discussions with the producers, not have not made all this evil to be treated like this (5). If EDF offers a price of 47 euro/MWh, we will return to see its shareholder...

E.n.: Some say already that with Dunkirk, manufacturers and suppliers play cat and mouse...

O.M.: It is too early to decide. We are well aware that the operators must earn money to invest. The question is whether it can pay all of the addition at 20 of consumption (électro-intensifs, Editor's note). In the pre-election period, "on" is not doing harm to individuals, and therefore pay those who don't vote... but who are likely to vote with their feet. We have heavy investments to achieve. If economic conditions are not met, we will not and this will have economic and social impacts important to everyone. The Government avoids to face public opinion (by not increasing not tariffs, Editor's note) and EDF, to face the CGT - by not productivity gains. This is a short-term strategy. But in the long term, it is dangerous. Does the risk of breaking down of the sections of walls of French industry

E.n.: What happens if the responses to the call for tenders not agree you

O.M.: in this case, the members of Dunkirk will do nothing and each will negotiate in the corner... It will not put money on the table in advance or commit to 15 years if the price is not good. Dunkirk members will remain in this structure, with its constraints, if the game is worth. Today, there is no guarantee of success and it is not very well known where it is going. What happens if, for example, we get that two-thirds of the quantity demanded The cost of total risk to be the result of the mixture of a quantity of electricity obtained via Dunkirk and the rest purchased with even less bargaining power...

E.n.: Some say that instead of playing the card of one contract for several companies, as envisaged in Dunkirk, would be better that each company negotiates a contract for the long term... as was the case prior to liberalization. What do you think

O.M.: I think they are right! This looks indeed a challenge to a single contract - since Dunkirk will function as a kind of central to purchase with precise rules among its members: If a company uses less than expected, with kW will return in the common pot, etc.

E.n.: What balance do you liberalization

O.M.: So far, it has proved to be a decoy because there is not so much competition and we are not about to have more. Industrial consumers are mistaken. They have not seen how capacity and demand are topics which meet. We stayed for a long time on an image of excess installed capacity and it has probably not quite anticipated the fact that demand gradually return the offer. Especially, when liberalisation was launched, there was a faith in a market which would find its balance. It was not imagined that the Platts would be deemed to be market price. This index responds well to the problem of balance between producers in the very short term. But nothing today to establish a price for the consumption of medium and long term. However, in General, a market price is a balance between producers and sellers. So it should be a wholesale market with references on the prices of transactions reported between producers and buyers, while preserving the anonymity with a reporting system. Today, we do not have this. The pro-Bourses say that before the liberalisation, the market was not transparent and that we did not have access to prices. And it is true that we never check if we were good or less well treated than our competitors. But from there to pay up to double what it paid prior to be sure to be also abused than our competitors, I am not sure this is really our interest!

E.n.: Which could put in place what you claim

O.M.: Great question... As an industry, we say that there must be safeguards until we are dead. While costs are clearly higher in Germany - who has a large base coal - that in France, the wholesale price is lower. It is abnormal and it reflects a non-functioning of the competition. If it had cut EDF in four producers and put our contracts up for auction, producers said would be beaten for the customer. I do not say that our wish is that the dismantling. We respect public choices in the past. EDF is a very beautiful tool technical, extremely reliable, etc. But it should not be that short-termiste approach to the result on a portion of its clientele would lead to irreparable industrial damage...

E.n.: Is the situation better for you in the gas

O.M.: We demand more physical terminals and access to supply chain - terminals, pipes, storage - at competitive prices. An industrialist who buys lots of LNG must store them when the ship unloads. However, today, it cannot do that to a non-competitive rate, set by the public power. At the same time, we are helping France gas to produce cavities of gas storage by emptying cavities salt into chlorine... but we then not free access to these storage systems.

E.n.: Imagine one day having your own gas storage

O.M.: We do not project in this sense is not inconceivable, but we have the technology to do so. Our business is chemistry, not energy. That said, if the energy was outrageously expensive, it would look all options...

1 The Dunkirk consortium was founded May 15 by seven industrial (Air Liquide, Alcan, Arcelor, Arkema, Rhodia, Solvay and UPM-Kymmene). It represents some 60 companies, approximately 200 sites in France.

2 Are eligible for the consortium sites consuming more than 2.5 kWh for a euro of value added and of which the power consumed in off-peak hours is at least 55 of the maximum power.

3. The objective of Dunkirk is "to purchase as early as 2006 rights to electricity consumption to 15 years minimum, and during this period, to consume this electricity at prices based on cost of production". To do this, Dunkirk will launch a tender to the European energy producers.

4. In Finland in 2002, a consortium of paper has signed contracts for the supply of electricity to long term in exchange for participation in the EPR decision-making, including the commercial commissioning is planned at the earliest in 2009.

5. The Minister of industry François Loos, speaking to the founding members of Dunkirk that he had met on 15 may for the signature of the Statute of the consortium, said: "when the consortium tender, I hope that you have satisfactory results, you are required to have. The interests of the producers is also to be listening to you because they need long-term contracts.

General Director, Solvay France, Member of the Executive Committee of the Union of chemical industries (UIC)