The government has decided to reduce the scale of the tariff shield, which has led to a partial catch-up in energy inflation since 2021.
Energy prices continue to rise. The government announced on Tuesday, July 18, a 10% increase in electricity prices from August 1. The tariff shield deployed in the fall of 2021 is maintained, but slightly reduced by the State. Households and businesses equipped with a meter with a maximum power of 36 kilovolt-amperes are concerned.
This decision comes within the framework of the usual calendar: the government can revise the regulated electricity tariffs twice a year, on February 1 and August 1. It has already decided to reassess them by 15% on February 1, 2023 and by 4% on February 1, 2022. Since 2021 – when an increase of just over 2% took place – this tariff, which benefits some 23 million customers, has therefore increased by around 34%.
The tariff shield is gradually decreasing
If the price of electricity increases, it is because the government is reducing its contribution. Set up in the fall of 2021 in response to inflation, in the midst of the post-Covid-19 pandemic economic recovery, this tariff shield device reduces household bills, but it is expensive for the State: 110 billion euros. euros between 2021 and 2023, according to the government. The Minister of the Economy, Bruno Le Maire, therefore announced on April 21 the gradual end of the shield for electricity.
This 10% increase is a first step towards the lifting of the system, which must be staggered until the end of 2024, at the rate of two annual reviews. “From August 1, the tariff shield will continue to cover the protection of French people for more than a third of their bill, around 37% of the electricity bill, against 43% currently”affirms the government, which ensures that the French tariff appears “among the lowest in Europe”.
Without a shield, the price of electricity should have jumped by 74.5% this summer to align with the theoretical evolution of regulated electricity sales tariffs, calculated by the Energy Regulatory Commission (CRE) . The government has chosen to limit this increase to 10%.
Inflation catch-up
This additional cost takes into account the growth in electricity transmission costs (+6.8% since February 1 according to CRE), but above all energy inflation since 2021. Indeed, the French shield has contained the skyrocketing energy prices over the past two years. “Several factors are pushing prices up: the economic recovery in 2021, the war in Ukraine and fears about the French nuclear fleet.summarizes with franceinfo Nicolas Goldberg, consultant energy specialist and partner at Colombus consulting. Gas prices are still higher than in 2021.” However, part of the French electricity produced and imported comes from gas-fired power stations. In addition, concerns about the ability of the French nuclear fleet to meet demand in winter “are overrated”adds the expert, which helps to increase prices.
The opposition castigated this catch-up on Tuesday. It is “completely abnormal that the government announces an increase today when nothing in our production costs justifies it”, denounced at a press conference at the National Assembly the boss of the deputies Les Républicains, Olivier Marleix. At a press conference, the president of the independent group Liot, Bertrand Pancher, called for “targeting the tariff shield” And “increase aid for families who need it most, and perhaps reduce it for those who need it least”. This is also the opinion of three economists from the Economic Analysis Council (CAE), who on July 11 recommended the removal of the shield for wealthier households. “It is better to strengthen the aid targeted towards the most precarious, such as the energy check”abounds Nicolas Goldberg.
The consumer defense association CLCV deplores bad news for households. “The government is stabbing us in the back in the slump of summer”, reacted Tuesday on franceinfo François Carlier. The general delegate of the association believes that this increase will particularly concern households “both modest and middle class”. Considering “food prices are still very high, it’s really bad news for purchasing power” according to him.