France will limit gas and electricity price increases to 15% in 2023

published on Wednesday, September 14, 2022 at 8:28 p.m.

France on Wednesday announced its battle plan to get through the winter: while the risk of cuts is very real, the prime minister called for sobriety and European solidarity, capping gas and electricity prices at 15% in 2023.

Like its European neighbors, the French state will continue to spend billions of euros to mitigate the impact of Europe’s worst energy crisis since the 1970s.

An exceptional energy check will be paid at the end of the year to 40% of households, that is, 12 million households: 200 euros for the lowest 20%, and 100 euros for the other 20%.

In the first version of the tariff shield, the regulated electricity tariff had increased by 4% in February 2022, and the gas tariff had been frozen at the level of October 2021. Not only households, but also condominiums, social housing, small companies and smaller municipalities, around two thirds of them according to Elisabeth Borne, will benefit from this rate limited to 15% next year.

Without this “shield”, prices would have increased by 120% according to the government. The State will pay the difference: it will cost 45,000 million “gross” euros in 2023, but 16,000 million “net” euros, deducting 29,000 million euros in payments from renewable energy producing companies -according to a mechanism that the Commission would like European- generalize in Europe to recover part of the “super profits” of the energy companies.

The head of the French government expressed her fears in the event of a “particularly cold winter combined with supply difficulties”. But she insisted that “in the most likely scenarios, if everyone takes responsibility and exercises the necessary sobriety, there will be no court.”

For those who heat with oil or wood, the aid voted this summer in Parliament will be paid at the end of the year.

The Government, for its part, has recalled that no specific food check was planned soon, but that an “exceptional aid for going back to school” of 100 euros per household, increased by 50 euros per child, is planned for beneficiaries of social minimum. will be paid on Thursday to 10.88 million households.

In addition, the Minister of the Economy, Bruno Le Maire, did not rule out this Wednesday maintaining aid for fuel in 2023, depending on the evolution of oil prices. However, they would be “aimed, in particular, at those who have no other option than their car to get to work.”

The 15% rise in regulated prices has been criticized as too high by the opposition, from Marine Le Pen, head of deputies for the RN, denouncing a “double penalty for the French” who will suffer the rise by financing the price shield, to Olivier Faure. the PS or the LFI deputy Manuel Bompard who lambasted a government that makes “the people and the State pay to forgive the ultra-rich and the speculators of the crisis.”

– No “loss of control” –

Under the effect of the war in Ukraine, the flow of Russian gas to Europe has dried up, raising fears of winter shortages and causing prices to rise on markets. However, it is gas prices that drive electricity prices.

The managers of the French gas (GRTgaz) and electricity (RTE) networks warned this Wednesday of the risk of cuts if the winter was cold. An average winter would be more comfortable.

The difference between gas and electricity is that you have to save gas now, so that the reserves that have already been accumulated last as long as possible.

As for electricity, RTE has not “totally excluded” the risk of cuts, considering that they could be avoided “by lowering national consumption between 1 and 5% in most cases, and up to 15% in situations most extreme climates.

For companies, municipalities and individuals, this means reducing or postponing the consumption of heating, lighting or cooking, especially during consumption peaks, between 8:00 a.m. and 1:00 p.m. and between 6:00 p.m. and 8:00 p.m. hours.

Sobriety will prevail no matter what, even beyond this winter: EDF, according to an external audit, will still have many sites to manage next winter and… until 2025.

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