This could be the fourth significant increase in electricity prices in two years. After an increase of 10% at the beginning of August, the pace is accelerating and the French could face a new explosion in their bill of around 10 to 20% at the start of 2024.
The bad news was anticipated by Emmanuelle Wargon, president of the Energy Regulatory Commission (CRE) this Thursday, September 14, as the reassessment of the regulated electricity tariff (TRV) planned for the new year approaches. . “It’s still a little early to do the equation, we will have to wait to see the prices at the end of 2023. However, we will be in a zone of 10-20% roughly,” she estimated. A possibility however “excluded” a few hours later by the Minister of the Economy Bruno Le Maire, who reacted to the proposal. The actual increase will not be confirmed before the end of the year, as the decision depends on the government. But the CRE’s mission is to calculate a theoretical tariff, based on market prices.
The tariff shield, which had contained the increases, will end
In February 2023, the increase was capped at 15% while it reached a 99% increase without the help of the tariff shield, put in place to limit the effect of the explosion in the cost of energy linked to Russia’s invasion of Ukraine. Protection which cost the State around 110 billion euros between 2021 and 2023.
In August, it was the drop in the shield which caused a 10% increase in prices. The Energy Regulatory Commission thus indicates that without a price shield, the theoretical change in regulated prices on August 1, 2023 would have been +75%. At the beginning of the summer, the former Minister of Public Accounts Gabriel Attal – now at Education – nevertheless announced a “gradual” but complete disappearance of the tariff shield by the end of 2024, which leaves think about a new increase perhaps more significant than the previous ones.
Brussels wants to launch market reform
Not all energy suppliers seem to have respected solidarity during this period of energy crisis. At the start of 2022, the government forced EDF to sell more electricity at low prices to its competitors, thus putting it to work to contain the bills of individuals and businesses. A rebate that three alternative electricity suppliers appear not to have passed on to their customers. Elmy Fourniture, Mint Energy and Sagitterre (which markets electricity under the “Chez Switch” brand) are currently controlled by the Energy Regulatory Commission, which is considering sanctions if guarantees are not produced, he said. she announced this Thursday.
Brussels wants to launch market reform
In Brussels, the electricity market is also the center of attention. In 2022, in order to protect businesses and consumers from the volatility of the electricity market and encourage investments in renewables and nuclear power, Parliament proposed increasing the use of long-term contracts for carbon-free energies. Proposal validated this Thursday by MEPs, who are launching talks with the 27 for an ambitious reform of the European market.
In particular, they propose that any public support for new investments in carbon-free electricity should be done via “Contracts for Difference” (CFD). These state-guaranteed price contracts oblige the electricity producer to repay the income earned if the daily price on the wholesale market is higher than the guaranteed price, but receives compensation otherwise. MEPs leave the door open to “equivalent support systems”.