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(Bloomberg) — Marine Le Pen’s energy plans risk throwing a spanner into the workings of Europe’s electricity market.

The National Rally’s proposals for tackling the high cost of living include policies that could disrupt power flows across national borders, weaken Europe’s biggest power supplier Electricite de France SA, and make the whole region’s energy supplies less secure, according to political and business leaders.

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“France would shoot itself in the foot with this electrical Frexit,” said Nicolas Goldberg, a partner in charge of energy and environment at Colombus Consulting in Paris. “Exports wouldn’t be guaranteed, which would lead to a loss of nuclear revenue for EDF. Imports might be more expensive in case of harsh winter or new reactor issues.”

The nationalists — which polls suggest will be the largest party after the run-off round of the legislative elections on Sunday yet short of a majority — have pledged to re-introduce what they call French power prices. Such prices already exist and are traded daily on the European Energy Exchange, but they are heavily influenced by the situation in neighboring countries because Europe has an interconnected power market. 

The National Rally wants to take back control of electricity prices in France by ending market-based cross-border transactions, and replacing the free movement of power with bilateral or multilateral contracts with neighboring countries, according to Jean-Philippe Tanguy, who is in charge of the far-right party’s economic and energy platform. 

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While there are doubts the plan is legally workable within European Union rules, the prospect of France turning against the principle of a market-based system that lets prices dictate where power flows is a worrying prospect for business leaders and politicians across Western Europe. 

“Re-introducing energy barriers within Europe would increase the risk of supply problems and higher prices,” Catherine MacGregor, chief executive officer of French power and gas utility Engie SA, wrote in La Tribune Dimanche newspaper last month. “Without a European power market, we’d be exposed to even more volatile prices, and even to the risk of blackouts.” 

France is the cornerstone of Europe’s power market because state-owned EDF is the continent’s biggest electricity producer. The utility’s fleet of 56 nuclear reactors regularly sends its surplus output overseas, allowing the debt-laden company to earn prices that are higher than at home. 

The country’s importance was particularly evident in 2022, when technical flaws that shut down many of its reactors, just as Russia’s invasion of Ukraine disrupted gas supplies, plunging Europe into a historic energy crisis. France has since regained its crown of the continent’s biggest electricity exporter, helping to keep a lid on bills of Britons, Belgians, Germans, and Italians.   

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The National Rally’s policy to disconnect France power’s prices from neighboring markets, combined with tax cuts, could cut energy bills for French households by as much as 40%, Tanguy said.

That’s potentially a potent message for voters. Despite spending tens of billions of euros to shield French consumers from higher energy prices since the 2022 energy crisis, President Emmanuel Macron’s government has eventually been forced to progressively pass higher wholesale electricity costs onto end-users.

Macron’s Finance Minister Bruno Le Maire has argued that market forces are now working in consumers favor and households bills could fall by as much as 15% early next year. Electricity supplies are more plentiful in Europe thanks to the rebound in EDF’s nuclear production, rising capacity of renewables such as wind and solar, and the arrival of alternatives to Russian gas supplies from other parts of the world. Le Maire has also pledged to protect users against any future price surges and tax part of EDF’s windfall revenue.

The latest opinion polls suggest the National Rally, while short of a majority of seats in the National Assembly, will be the largest single party and well ahead of Macron’s Renaissance. 

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• France Agrees Cap on EDF Nuclear Power Price to Shield Users
• France Wants to Reopen Talks With EDF on Power Contracts  

Le Pen’s energy policies have raised alarm bells in Germany, where power prices now stand above the level in France. That’s because they are driven much more by the cost of fossil fuels since Berlin phased out nuclear energy. 

“If we divide Europe into nation states again and French products are only produced in France with French money for the French and we think this through, the same applies to Germany, Poland and Scandinavia, then we will lose prosperity in Europe,” German economy minister Robert Habeck said on Wednesday. “Everything will become more expensive. I hope that a different sound will come in after the elections.”

It’s not just a concern for other countries, France’s energy security has itself benefited from the integrated European power market, notably during the depths of the slump in EDF’s power generation in 2022, according to a report from the nation’s energy regulator published in May.

The real-time adjustment of trade flows enabled by an open market is a powerful tool to reduce the costs for European consumers, according to the Commission de Regulation de L’Energie. That adjustment isn’t as efficient with the UK and Switzerland, which are outside the European single market, the regulator said. 

“The energy market was the reason why we overcame the crisis,” said Kerstin Andreae, chairwoman of German energy lobby group BDEW.

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