French industry's electricity bills are likely to jump by 3.5 billion euros ($3.68 billion) next year as companies will be required to buy more at market rates under a new cap, the French union of energy-using industries Uniden said.

The French government announced in October that next year state-owned utility EDF, which is soon to be fully nationalised, will sell less of its nuclear power at prices set by the regulator to smaller rivals than it did in 2022.

EDF will be required to sell 100 terrawatt-hours (TWH) to rivals at what is known as the Arenh price - or below market rate price - determined by the regulator, the government said, compared with 120 TWH this year.

That means businesses face higher prices.

Requests for power under the Arenh cap totalled 148.3 TWh for 2023, the Energy Regulatory Commission (CRE) data showed.

That indicates that the allocation rate for demand for cheap electricity has been reduced by seven percentage points to 67.4% from 74.8% in 2022, necessitating the purchase of additional electricity at high market prices, Uniden said.

The direct impact to industry is around an additional 30 euros per megawatt hour (MWh), or 3.5 billion euros, Uniden added. ($1 = 0.9500 euros) (Reporting by Benjamin Mallet, writing by Forrest Crellin, editing by Susan Fenton)