The price of electricity skyrockets: what impact on your bills?

Le bouclier tarifaire doit prendre fin en décembre 2022.

The tariff shield will end in December 2022. (© Raphael / Adobe Stock)

Electricity prices are skyrocketing and consumers are worried.

In the wholesale market (where providers buy energy, Ed.), prices have skyrocketed. Electricity costs for 2023 broke a record for France on Friday, August 26, reaching more than 1000 euros per megawatt/hour (MWh), compared to 85 euros per MWh a year ago. That is a price multiplied by 11.7.

Enough to break out in a cold sweat thinking about your upcoming bills.

Why is the price of electricity going up?

In the first place, it is necessary to analyze why the price of the electricity market skyrockets.

The electricity price set depends on the type of fuel used in the last power plant that had to be activated (“call”) to produce enough electricity to meet demand at that time. When the needs exceed the production already covered with renewable energies or nuclear power plants, logically it is the thermal, gas or even coal plants that must be “called”.

FED

And there, the war in Ukraine becomes an important factor, because thermal power plants use gas to generate electricity.

However, the price of gas evolved this week to historical levels, more seen since the beginning of the Russian invasion in Ukraine, that is, above 300 euros per MWh. And like Russia delivers much less gas to Europeprices could remain very high.

The war only partly explains this increase. The French nuclear fleet, that is, 56 reactors, is in a bit of trouble.

Videos: currently on Actu

Currently, 32 nuclear reactors are closedincluding 12 for corrosion problems. On Thursday, August 25, EDF even extended the closure of four reactors for these reasons.

What tends an electricity market in which the actors speculate on the situation and lead to higher prices.

However, while this increase in wholesale prices is impressive, it is not new: EDF was already reporting an increase in electricity prices. with the post-covid economic recovery.

What impact on the bill?

The impact will not be the same for each consumer. In fact, in France there are several types of electricity tariffs for individuals.

  • The regulated rate (EDF blue rate), “fixed by the public authorities and proposed by the historical suppliers, EDF and the local distribution companies”, points out the public life site. These rates are set once or twice a year.
  • The fixed pricewhose price is identical throughout the duration of the contract.
  • The index pricewhich globally follows the evolution of regulated prices.
  • The price with the evolution or indexation, “so the evolution of the price is defined in the contract”, specifies the site of the national energy mediator, energy-info.

Good news for consumers who have opted for regulated tariffs: the government’s “tariff shield”, decided in autumn 2021, helped limit the increase in electricity prices to 4%. No increase.

On the contrary, if you have opted for a rate with evolution, you must monitor your contract to check if an increase will not be applied.

The indexed offers in the markets present risks because their price fluctuates strongly according to supply and demand, seasonality and the geopolitical context.

info-energy

Nevertheless, it is always possible to return to the regulated tariff. “You just have to make a request to the historical provider, usually EDF. It is the principle of reversibility”, indicates energy-info.

And next year?

As the tariff shield must finish at the end of the year the question is legitimate: what will happen to electricity prices on January 1?

In an interview in ParisianPrime Minister Élisabeth Borne promised that the executive would not don’t let energy prices explode for homes.

After the end of the tariff shield, “we will maintain devices to cushion energy prices” […] and we will take specific measures to support the most vulnerable.”

The French can rest assured, we will cushion the increases.

Elizabeth BornePrime Minister

During a trip to Metz for a meeting of majority executives, the Minister of the Economy, Bruno Le Maire, assured that the increase in electricity and gas in 2023 would be “content”.

Earlier in the day, he had specified that there would be no no “catch up” on prices currently capped in 2023, and that increases would also be contained for gas.

The government reassures

Always to reassure, Bruno Le Maire drew the contours future help for individuals and companies.

Next year, for the most modest households, there will be energy vouchers that will help those who have the most difficulties to pay the electricity bill.

bruno the mayorEconomy Minister

These checks, for an amount between 48 and 277 euros, have already been granted to low-income households in 2022 to help them pay the energy bill for their homes.

For companies, the Economy Minister has indicated that he wants simplify access to subsidies for those who do not benefit from a regulated or preferential electricity rate and have difficulties paying their energy bills.

Also present in Metz, the Minister for Energy Transition Agnès Pannier-Runacher asked companies in the tertiary sector to save energy so that electro-intensive industries can continue to operate normally.

“We can act on the temperature of the offices, we can act on the ventilation of shopping centers”. The end of the abundance of energy.

Did you find this article helpful? Please note that you can follow Actu in the My Actu space. In one click, after registering, you will find all the news from your favorite cities and brands.


#price #electricity #skyrockets #impact #bills

Leave a Reply

Your email address will not be published. Required fields are marked *