The price of electricity will not soar on February 1. The State is forcing EDF to limit the increase in regulated electricity prices to 4% in 2022, by forcing the energy company to sell more electricity at low prices to its competitors, the Minister of Energy announced on Thursday 13 January. Economy Bruno Le Maire.
Three months before the presidential election, the government wishes to take exceptional measures to protect the purchasing power of the French, with the establishment of the “tariff shield” on energy announced by Prime Minister Jean Castex at the end of September. “Without government intervention”, the increase in consumers’ electricity bills in 2022 would have reached “35%”, assures Bercy in a press release (PDF). Here are the levers operated.
By lowering the internal electricity tax (TICFE)
As a first step, the government decided to lower one of the main taxes on electricity: the Domestic tax on final electricity consumption (TICFE). AT As of February 1, this tax will thus be reduced to the minimum provided for by European law: it will drop from 22.50 euros per megawatt hour (mWh) to 50 cents, the lowest price set by Brussels.
This should bring “massive support for the purchasing power of all consumers”, believes Bercy. This tax reduction represents a tax loss of eight billion euros for the State and allows “of cover about 15 points of increase in the price of electricity”, according to the ministry.
By forcing EDF to sell more energy at low prices to its competitors
Another lever operated by the State: forcing EDF to sell more electricity at low prices to its competitors. The volume of this electricity sold at a fixed price – as part of the mechanism called Arenh (Regulated access to historical nuclear electricity) – will thus be increased by 20 terawatt hours (TWh), from a total of 100 to 120 TWh . A mechanism which should allow EDF to sell a larger volume of electricity on the market and to retailers, to offer it at a lower cost to the consumer.
This volume, increasing from 100 to 120 Twh for 2022, will be accessible “to all consumers, individuals, communities and professionals, via their supplier, according to terms that will be specified very soon”, said the Ministry of Ecological Transition in a press release published Thursday. “Suppliers will fully pass on the benefit to consumers. This point will be closely monitored, in conjunction with the Energy Regulatory Commission”, adds the ministry, which invites consumers whose supplier does not respect the rules to change them.
Since December, the government has been planning to raise this Arenh ceiling so that suppliers have more cheap electricity at a fixed price, even if it means slightly increasing the price paid to EDF (of which the State owns nearly 84%). This is what was announced. In exchange, the price paid to the energy company will be marginally raised from 42 to 46.20 euros per MWh, far from market prices, which peak around 250 euros. The bill turns out to be steep for EDF, with a loss of gross operating surplus included “between 7.7 billion and 8.4 billion”, estimated Thursday evening Bruno Le Maire in Le Parisian (article reserved for subscribers).
By preventing a catch-up in 2023
This decrease valid “for the whole year 2022” should not be caught up next year, as the Energy Regulatory Commission (CRE) feared. “There will be no further increase in 2023”, thus committed the Minister of the Economy to the Parisian. “It is the State and EDF who will bear the cost of this measure.”