What changes on 1 November 2026
The capacity mechanism is the scheme that pays generation, storage and demand-response assets for being available during winter consumption peaks. Its purpose is to secure electricity supply at the lowest cost.
Article 19 of French finance act no. 2025-127 for 2025 reformed this scheme. The previous mechanism, approved by the European Commission in 2016 for ten years, is coming to an end. By a decision of 22 December 2025, the European Commission authorised the new French mechanism from 1 November 2026 to 31 March 2036.
The difference comes down to one word: centralisation. Under the old system, each supplier had to buy capacity guarantees from operators. Now RTE, the French transmission system operator, alone contracts on behalf of the community the volume of capacity needed for each winter. The cost is then allocated through a capacity mechanism cost-allocation tax, governed by articles L. 322-5 to L. 322-21 of the French code on taxes on goods and services.
The first delivery period covers the 2026-2027 electricity winter. It began on 1 November 2026 and ends at the end of March 2027.
Who pays, and on what basis
The tax is paid by what the texts call contributors. According to the CRE deliberation of 27 January 2026, these are electricity suppliers reselling to final consumers, large consumers sourcing directly on the markets, and network operators for their losses.
The total cost is shared among contributors according to their consumption during periods of stress on the power system. For a business buying its electricity from a supplier, the tax is therefore owed by that supplier, which passes it on in its price.
The CRE points out that suppliers remain free to decide how they pass this cost on in their offers. Only one condition applies: those offers must remain consistent with the costs they bear under the mechanism. Two contracts signed in the same month may therefore treat capacity in very different ways.
PP days, at the heart of the calculation
"Peak period" days, or PP days, are the high-stress days flagged by RTE. According to RTE's note of 30 September 2026 on how they are selected, exactly 22 PP days are flagged per delivery period, including 6 between 1 November and 31 December.
These days are chosen among working days, school holidays included and national public holidays excluded. A PP day covers two windows: 7 h to 10 h and 17 h to 20 h. Consumption in these windows is what drives the calculation of the contribution share.
| Parameter | Rule for the 2026-2027 period |
|---|---|
| Delivery period | From 1 November to 31 March |
| Number of PP days | 22, including 6 in November and December |
| Time windows | 7 h - 10 h and 17 h - 20 h |
| Normal signal | From D-2 before 12 h, at the latest D-1 at 9 h 30 |
| Exceptional signal (EcoWatt orange or red) | From D-3 to D-1 at 19 h |
Once a PP signal is published, RTE does not reverse its decision. A site that follows these signals therefore knows, by the morning before at the latest in normal conditions, which hours will count.
The figures from the first auction
RTE held a single auction for winter 2026-2027 on 6 July 2026. CRE deliberation no. 2026-186 of 10 September 2026 sets out the result in detail.
| Item | Value recorded by the CRE |
|---|---|
| Volume selected at auction | 82,446.8 MW |
| General clearing price | 28,182.99 €/MW |
| Intermediate price cap for existing installations | 15,000 €/MW |
| Capacity paid at the intermediate price cap | 70,900.5 MW |
| Capacity paid at the clearing price | 11,487.1 MW |
| Non-deductible VAT included in the cost | €272,767,940.68 |
| Total amount to be financed | €1,667,184,865.48 |
| Corrected withdrawn power | 89,409.45 MW |
| Applicable quotient | 18,646.63 €/MW |
The quotient is the unit amount of the tax. It divides the amount to be financed by the power withdrawn by all contributors, corrected for weather variations and demand response. The CRE says it has already observed minor adjustments for a few operators, which will be included in the amount to be financed for the 2027-2028 period.
The intermediate price cap played a decisive role. According to the CRE deliberation of 15 July 2026, this cap set at 15,000 €/MW helped to halve the cost of the mechanism for consumers.
Why capacity costs more this winter
The CRE describes the cost of the first auction as sharply up compared with the previous mechanism. Its deliberation of 15 July 2026 on regulated tariffs puts forward three explanations.
The first is the end of ARENH on 31 December 2025. Delivery of nuclear electricity by EDF also came with capacity guarantees; depending on the rationing rate, it could cut the cost of capacity by more than 40%. Our article on the end of ARENH and the universal nuclear payment explains this change.
The second is the fall in electricity prices. It reduces the revenues of the thermal plants needed during peaks, which increases the payment they need to stay in service.
The third is tax-related. The reform has the effect of applying VAT twice to the cost of capacity. Article 71 of the finance act for 2026 offsets this double taxation through a reduction in the electricity excise duty in August 2026 and February 2027.
The measured effect on regulated tariffs
Regulated electricity sales tariffs provide a public order of magnitude. In its proposal of 15 July 2026, the CRE includes the cost of the new mechanism from 1 August 2026, over twelve months. For non-residential customers on the regulated tariff, the increase linked to capacity averages 3.13 €/MWh excluding tax, or 1.93% excluding tax. This figure concerns regulated tariffs: a market offer follows the rules of its own contract.
What it means for you
For an SME or a commercial site on a market offer
The capacity cost is borne by your supplier, then passed on under the terms of your contract. It may be included in an overall price, invoiced separately, or revised under an indexation clause. A contract signed before the reform deserves a careful review: how it treats capacity after 1 November 2026 determines what you will pay this winter.
For an industrial site or a large consumer
A site sourcing directly on the markets becomes a contributor itself and pays the tax on its own consumption on PP days. For others, the stakes lie in the negotiation with the supplier and in the ability to modulate consumption in the 7 h to 10 h and 17 h to 20 h windows.
For a property portfolio manager or a local authority
Contracts covering several sites combine consumption profiles. PP days fall on weekdays, at the hours when heated buildings start up and lighting is on. Managing these uses during the peaks flagged by RTE directly affects the share of cost passed on.
Our recommendations
The new mechanism changes the way the cost of security of supply enters the price of electricity. The businesses that make the most of it are those that know what their contract provides and how closely their consumption coincides with grid peaks.
IHD supports businesses in this reading, fully independent of suppliers. We analyse the capacity clauses of current contracts, compare offers on a consistent basis and inform the purchasing decision before each renewal. Our guide to buying electricity and gas for business presents the main pricing models, and our guide to the business electricity bill helps you identify each component.
To review your contract before the winter peaks, discover our energy brokerage service or contact us.
