Why are electricity prices in France set to jump (yet) again?

After just a brief reprieve, electricity prices in France are set to jump once again in August. So, why is this happening?

Why are electricity prices in France set to jump (yet) again?
Illustration photo: AFP
At the beginning of August, the price of electricity will increase by 1.2 percent after a previous jump of 5.9 percent took place just two months ago, in June. 
So, why have two price hikes been scheduled in such a short space of time?
Well, it seems the reason for the short space between the two hikes is all down to the 'yellow vests' – or at least French President Emmanuel Macron's response to their demands. 
That's because the increase on June 1st was originally scheduled for February 1st – right in the middle of the 'yellow vest' crisis – before the government decided to push it back in an attempt to appease the demonstrators.  

France to close 14 nuclear reactors by 2035 an all coal-fired power plants by 2022Photo: AFP

France's energy regulator (CRE) sets the regulated prices of electricity every six months – in winter and in summer – and this time both hikes will take place within just a couple of months of each other. 
“We will have had both shots at once,” Fanny Guinochet from L'Opinion told Franceinfo
“The price hike was expected. We can just console ourselves by saying that August's will be less significant than the one we just had,” she said, referring to the fact that the June hike was almost 6 percent compared to the August increase of 1.2 percent. 
According to Guinochet, this hike will represent an increase of around €18 extra every year on average for a home that has electric heating. That's after an annual increase of €85 brought in by the previous hike. 
“This is one of the strongest increases recorded,” said Guinochet. 
The government is also hoping that by rushing through this new increase in summer people will find it easier to swallow.
But, why is the increase happening at all?
As is often the case, the price hike is primarily due to rising taxes – in this case the TURPE tax (Tarif d'Utilisation des Réseaux Publics d'Electricité). 
However it is also linked to several other factors, including supply costs, and changing energy prices on the wholesale markets, which are very variable. 
On a more positive note for consumers, the French government wants to stabilise the cost of electricity by 2020 as part of its new energy bill, which would mean a “change to the method used to calculate electricity tariffs”, according to the French Minister for the Environment François de Rugy.
“I want to give the French a form of price stability related to the stability of the cost of electricity production by nuclear power plants,” he said, adding that 70 percent of France's electricity is produced by nuclear power stations. 
This means that the cost of electricity should be “fairly stable” and “fixed by law”, said the minister, explaining that if French power giant EDF and its competitors have access to fixed-cost nuclear electricity the number of price hikes should be limited. 
Today, the regulated electricity tariffs, applied by EDF to around 25 million households, are set by the French Energy Regulatory Commission, according to a complex calculations, which take into account the evolution of the wholesale market price.

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France increases to €9,000 grants for property owners

A French scheme to provide financial aid to property owners seeking to replace oil and gas boilers with eco-friendly alternatives has been extended, with grants of up to €9,000 now available.

France increases to €9,000 grants for property owners

The French government will increase the amount of money available to replace gas and oil-powered boilers through the MaPrimeRenov’ scheme, part of a package of measures announced by Prime Minister Jean Castex on Wednesday

Environment Minister Barbara Pompili said that from April 15th, some households would be able to benefit from an extra €1,000 to “accelerate the replacement of fossil fuel-powered boilers with renewable heating solutions”, such as heat pumps and biomass heaters. 

It will no longer be possible to use state funding to replace a gas boiler with another, more efficient gas boiler. 

This brings the total state aid available for replacing boilers up to €9,000. 

Who can benefit? 

The funding for boiler replacement is available through the MaPrimeRenov’ scheme – which is available to anyone who owns property in France. 

Applicants for funding do however need a French numéro fiscal (tax number) and a copy of their latest tax declaration, which means those who do not file the annual tax declaration in France are effectively excluded. 

You can only apply for funding if your property is more than two years old. 

The amount of money you could receive depends on a range of criteria including: household income; the number of people living in the household; and the location of the property. 

You can read more about the MaPrimeRenov’ scheme HERE

Why is the government doing this? 

The move essentially allows France to faire d’une pierre deux coups – hit two birds with one stone.

One one hand, it will allow the country to cut down on greenhouse gas emissions in the face of the global climate crisis. 

On the other, it allows France to reduce its dependency on Russian gas – which has become a government priority ever since the invasion of Ukraine.

French Prime Minister Jean Castex said the government would target and end to dependency on Russian energy by 2027. The construction of new nuclear plants announced in February will also assist in reaching this objective.

You can read more about the government’s measures to insulate the French economy from the war in Ukraine HERE