2024-02-02 12:25:29
ECONOMY – The price shield, introduced to protect French consumers from excessive increases in energy prices, was gradually lifted (end in June 2023 for gas and in January 2024 for electricity). Minister Le Maire (the man who wanted to bring the Russian economy to its knees, but only succeeded in bringing the French economy to its knees) announced increases of 9.8% for peak/off-peak rates and 8.6% for basic rates, affecting 20 million French people.
The gradual removal of the tariff shield, aimed at containing energy inflation in Europe, is at the origin of the increase in electricity prices at the start of the year. The increase in the internal tax on final electricity consumption (TICFE) to 21 euros per megawatt hour (MWh) from February 1, 2024 also contributes to this price increase.
This increase of almost 10% will affect around 400,000 households, depending on the contracts signed. For a household residing in an individual house, heating with electricity and having two children, this average increase will amount to around 18 euros per month, according to data provided by Bercy. Likewise, an unheated one-room apartment will experience an average monthly increase of 4.50 euros on its electricity bill. In 2021, the government lowered an internal tax on electricity to a minimum, increasing it to 1 euro per megawatt hour, compared to 32 euros per megawatt hour before the health crisis. This tax goes back to 21 euros on February 1, and is expected to increase again in 2025.
Concerns in a context of inflation
Jean-Yves Mano, president of the consumer and users association CLCV (Consumption, housing and living environment), expressed his concerns regarding the recent increase in electricity prices. He believes that this increase could have been better planned in order to mitigate the impact on household budgets. He emphasizes that 34% of French people are still in a situation of deprivation, and this new increase will only worsen their situation.
He also deplores that the energy check was not increased, which could have helped households cope with these increases. Mano is calling for an increase in income to help households bear these additional costs. However, the Minister of the Economy assures that this will be the only increase in 2024 (Promises are only binding on those who believe them). Jean-Yves Mano affirms that the situation is unbearable for many French people who do not have the financial means to support these additional charges.
The impact of nuclear power on the cost of electricity
The impact of nuclear energy on the cost of electricity in France is reflected in government strategy. On the one hand, the government aims to end fossil fuel subsidies, facing a reduction in tax revenue estimated at 13 billion euros in the coming years, and potentially 30 billion euros by 2050. on the other hand, it underlines the importance of investing in new electricity production capacities, symbolized by the project to build six EPR-type nuclear reactors, valued at nearly 50 billion euros.
End of cheap electricity in France
The data collected by the Hello Watt barometer, which analyzes electricity prices in the main European countries taking into account both the cost of the kWh and the subscription, suggests a paradigm shift: France seems on the point of losing its leading position in terms of electricity prices, with an average of 29.8 euros per MWh. Italian households (28.3 euros) and especially Spanish (17.4 euros) now benefit from a better situation in this regard. Spain continues to benefit from what is commonly called the “Iberian exception”, a measure also in place in Portugal, where gas prices are capped, thus reducing the impact on the electricity bill.
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