Infrastructure charges fall
more slowly than gas use.
We cannot say which scenario we will be in. We will be somewhere between the high and the low hypothesis, but we must have a sustainable scenario whichever it is.Emmanuelle Wargon, President, Commission de régulation de l'énergie, 1 July 2026 (translated from French)
A long-lived asset whose demand is shrinking creates two exposures: a book value that assumes a life falling demand may not justify, a rule may shorten or a regulator may not let it recover; and a cost that concentrates on fewer payers, since most of the network stays in service. The CFO and the audit committee examine the two separately.
Because the regulator has put potential stranding in euros under each scenario before any closure, the French gas network illustrates the reading Sightis proposes. Scaled to the asset's materiality, the test asks for three figures on a plant, fleet or building: the shock, the share of book value that would stay unrecovered and the price of acting early.
Five answers
for each breaking point.
The shocks and their threshold
Which change, a rule, a climate exposure or a market that needs the asset less, could cut its value first, through which mechanism (useful life, cash flows or recoverable amount) and at what threshold?
A named shock with a number per scenario where one can be set. The CRE scenarios put French gas consumption at 165 to 320 TWh in 2050 against 371 TWh in 2025 (report of 1 July 2026, pages 5 and 6).
The unrecovered share
If the asset left service before the end of its accounting or regulatory life, what share of its book value could future cash flows or tariffs no longer recover, per scenario? Does the impairment test reflect the relevant scenarios?
A potential stranded cost in euros per scenario. The CRE puts it at EUR 1.1, 1.7 or 2.7 billion to 2050, one figure per scenario (report, page 17).
The option and its cost
What can be done before the shock, faster depreciation, earlier closure, conversion or sale, and what does each option cost now against what it saves later?
Each option priced now and later. In the CRE's modelling, five years less depreciation adds EUR 3 to 4 per MWh at the start of the next tariff period, with charges below the base case from the second half of the 2030s (tariff annex, page 8).
Who decides
Which body has the authority to change the asset's life, its price or its exit, and on what date does it decide?
A named decision-maker and a date. For French gas networks the CRE sets the tariffs; it will consult from 2027 and set the next network tariffs in 2028 (report, pages 25 and 27).
When the board is told
Does the board see the scenarios, the unrecovered share and the options before the decision date, and are the material assumptions consistent between the financial statements and the sustainability statement?
Before the decision, with consistent assumptions. ESMA's public statement of October 2025 encourages consistency in climate-related disclosures; the IASB's examples of 28 November 2025 show how to disclose the key assumptions behind recoverable amounts (IAS 36).
The French energy regulator
The Commission de régulation de l'énergie (CRE), France's independent regulator, sets the network tariffs of GRDF, NaTran, Teréga and Storengy. Its report on gas infrastructure to 2050 was published on 1 July 2026.
of potential stranded costs on French gas infrastructure to 2050 in the high-decline scenario, against EUR 1.1 billion in the network operators' scenario (GR), the CRE report of 1 July 2026 states (page 17).
The CRE report of 1 July 2026 defines stranded costs as costs a regulated operator has incurred that could no longer be recovered if an asset left service before the end of its accounting or regulatory life, page 17. It puts the potential amount at EUR 1.1, 1.7 or 2.7 billion to 2050 depending on the scenario, and its tariff annex prices the early option: in the CRE's modelling, five years less depreciation means a step of EUR 3 to 4 per MWh at the start of the next tariff period, from 2027, and charges below the base case from the second half of the 2030s. Several asset lives are already shorter: in-building pipes, risers and service connections in distribution are depreciated over 30 years, down from 45, and pipelines, wells, cavities and gathering in transport and storage over 30, down from 50, the annex records. The new tariff options in the July 2026 report have not been decided; the CRE will consult from 2027 and set the next tariffs in 2028.
The full case
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