The electricity price shield will not be extended for businesses, at least “for now”. This was clarified on Sunday April 23 by Minister Delegate for Industry Roland Lescure, while suggesting that the situation would be re-examined in the fall. “Today we have a calendar dictated to us by Europe on companies, which authorizes us to set up what is called the counter until the end of 2023”, declared Roland Lescure on France 3. Asked about a possible extension for businesses, the minister replied: “for the moment no”. “Electricity, gas have dropped a lot […]. So today, businesses don’t need help,” he said.
This device, initially intended for individuals and aimed at capping the sharp rise in energy prices, has been extended since 2023 to VSEs (very small businesses) with an electricity meter with a power of less than 36 kilovoltamperes (kVA) . In accordance with the provisions of the finance law for 2023, the price shield has limited the increase in the price of electricity to 15% since February 1, 2023 (it was limited to 4% previously).
Without the tariff shield financed by the State, electricity would have had to increase by 99.22% including tax, according to the scale made public last January by the Energy Regulation Commission (CRE) and set according to the costs of supply of electricity on the wholesale markets. “Obviously, as we did last year, we realize in the fall that we need it, we will do it and we will do it in a European framework. It’s normal”, continued Roland Lescure.
Households still protected
Households have obtained a reprieve with the extension of the tariff shield until the beginning of 2025. Set up in October 2021, it was initially planned until the end of 2023. “I give us two years, by the beginning of 2025, to get out of the shield on electricity”, because of the tariffs which remain “very high” compared to the pre-crisis situation, announced Friday, on LCI, the Minister of the Economy Bruno Le Maire.
A situation which, it seems, will not develop favorably in the immediate future: electricity contracts for delivery in the 1st quarter of 2024 are now traded on the futures market at 367 euros/MWh, i.e. more than double the prices charged in Germany (164 euros/MWh) or in Italy (182 euros/MWh).
This tariff shield, announced in the fall of 2021 by then Prime Minister Jean Castex when energy prices began to rise sharply, should cost 45 billion euros this year in public finances. To which are added other energy aids for households (fuel, heating oil, wood, etc.) and for small and medium-sized businesses.
Despite these expenses, the government continues to proclaim the end of “whatever the cost”, preferring to speak of targeted aid not intended to be permanent. The production of electricity by EDF remains “a little below what we could expect, so that makes prices which are even higher”, specified Bruno Le Maire. The release of this shield will therefore be gradual “so as not to worry” the French. Market prices for electricity remain high, in particular given the questions about the proper functioning of EDF’s nuclear fleet, affected by production difficulties, in particular due to corrosion problems.
The increase in the regulated electricity tariff, capped by the State through subsidies, was 4% in 2022 and 15% in 2023. “This in itself is a good thing for consumers, it is a positive measure, since it will avoid an explosion in electricity prices”, reacted to AFP François Carlier, of the consumer association CLCV. On the other hand, the Minister considers that the extension of the tariff shield on gas is no longer justified because natural gas prices have fallen significantly since the unprecedented peaks of 2022, caused by the war in Ukraine and the end of Russian gas exports. to Western Europe. The shield will stop “as of this year”, announced Bruno Le Maire.
The price of gas down
For gas, “there is no reason to maintain the shield”, said Bruno Le Maire, because of the prices which “have returned to the pre-crisis situation, at 50 euros per megawatt hour”. Given this drop, “the shield remains in place until the end of the year to protect the French, but will only be activated if gas prices again experience a sharp rise on the markets”, specified the office of the Minister for Energy Transition Agnès Pannier-Runacher. On Friday, the reference price for natural gas in Europe was around 40 euros per MWh, i.e. the level of summer 2021, which was already around double the average prices of previous years.
With regard to electricity, François Carlier indicates that, if the shield had been lifted as planned at the end of 2023, the regulated sales tariff, which concerns a majority of customers, would have exploded regardless of market developments, due to how it is calculated by the Energy Regulatory Commission. Do not penalize consumers – and with them growth – while preserving public accounts, the equation is delicate for the government. Bruno Le Maire agrees with the Mail Picard : “It is imperative to accelerate the deleveraging of France with a target of reducing the public debt in 2027 by 4 points higher than what was planned last year”, he explains. Among the levers mentioned, the exit from the tariff shield and the end of exceptional checks for energy.