The French government’s plans to introduce a “price corridor” for the wholesale nuclear power market are an important step in terms of state-controlled utility and nuclear operator EDF’s creditworthiness, S&P Global Ratings said.

The aim of the price corridor is to enable EDF to cover its costs while shielding consumers from volatile electricity price increases.

The government-proposed reform, set out in a consultative paper, would replace the ARENH nuclear market scheme under which EDF, which operates France’s commercial 58 nuclear reactors, is obliged to sell 100 TWh, or around a quarter of its annual nuclear output, to rivals at a fixed price of €42 per MWh.