France to limit price hikes on gas and electricity

As energy prices soar across Europe, the French government has announced a raft of measures to protect consumers.

France to limit price hikes on gas and electricity
(Photo by Thomas COEX / AFP)

The French Prime Minister, Jean Castex, has promised a “price shield” for household gas and electricity consumers.

His announcement came during a television interview on TF1 on Thursday, with less than a year to go until the Presidential election. 

Gas prices are set to rise by 12.6 percent this month, following a 7.9 percent rise in September, but will then remain frozen until April 2022. Only 1 percent of gas consumed in France is produced in the country. Global demand for gas typically rises during winter periods – the French government is trying to ensure that consumers won’t suffer. 

To compensate the winter shortfall, gas companies are likely to charge consumers higher that normal rates once the freeze is lifted. 

“We have to manage a spike [in price],” said the Prime Minister. Experts predicted that the price of imported gas could rise by 30 percent by the end of the year without intervention. 

This strategy has been attacked on the French left, most succinctly by Fabien Roussel of the French Communist Party. 

“The prices will be blocked… after a hike of 12 percent on gas. What a scam!!!”, he tweeted. 

Those on the right have accused Castex and the government of fiscal irresponsibility in recent weeks, evoking an ‘open bar budget’ and ‘burning of the cash register’. Many, including the Senate leader of Les Republicains, Bruno Retailleau, described the energy plan as cynical electioneering.

READ ALSO Rising energy prices: How to save money on bills in France

“The government proposes a price shield on gas up until April. That’s to say just up until the presidentials. The price hikes will come later!” he wrote. 

The government is only able to freeze prices of gas for households subscribed to Engie – one of France’s oldest energy suppliers in which the state holds a majority stake. It is expected that other gas companies (which account for about ⅔ of French households) will fall in line, in order to stay competitive. 

The Prime Minister also announced that the next electricity price hike, planned for February 2022, would be limited to 4 percent after it had initially been forecast for three times as much. Since Emmanuel Macron was elected as President in 2017, electricity prices have doubled. 

The government had previously announced that six million of the poorest households in France would receive extra energy subsidies of €100 in December. The so-called chèques énergies (energy cheques) were initially put in place during the yellow vest protests as a way to quell discontent. 

A recent poll published by Opinionway predicts a second round victory for President Macron in next year’s election. But the first round could be tight, with the 43-year-old winning less than 30 percent of the vote. This being the case, the government has left room for maneuver on energy policy. 

“If the measures we take are not enough, we will strengthen them,” Castex promised.

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France offers grants up to €1,500 to replace oil-fired boilers

Financial aid of up to €1,500 is temporarily available to households looking to replace oil-fired boilers with a more environmentally friendly heating systems. 

France offers grants up to €1,500 to replace oil-fired boilers

The temporary ‘coup de boost’ aims to encourage households to replace their oil-fired heating systems (chauffauge au fioul) and is in addition to the ‘coup de pouce chauffage’ (heating helping hand) scheme that is already underway to help under the energy saving certificates scheme (CEE).

All households that are primary residences – this aid is not available to second-home owners – equipped with an oil-fired boiler can benefit, with the amount for which they are eligible means-tested according to household resources and the replacement system chosen. 

Households with modest incomes benefit from a higher premium.

To benefit from the new temporary bonus, households must replace their individual oil-fired boiler with a more environmentally friendly heating system:

  • heat pump (air/water or hybrid);
  • combined solar system;
  • biomass boiler (wood or pellets);
  • connection to a heating network supplied mainly by renewable or recovered energy.

The total amount of financial help from the two schemes is €4,000 to €5,000 for low-income households; and from €2,500 to €4,000 for middle and high-income households.

For the connection of an individual house to a heating network, the amount of the bonus increases from €700 to €1,000 for low-income households; and from €450 to €900 for middle and high income households.

Estimates for the replacement of an oil-fired boiler must be accepted between October 29th, 2022, and June 30th, 2023, and work must be completed by December 31st, 2023.

The Coup de boost fioul aid can also be combined with MaPrimeRénov to replace an oil-fired boiler, meaning the least well-off households in France can benefit from aid of up to €16,000 to replace an oil-fired boiler with a pellet boiler or a combined solar system.

Since mid-April 2022, MaPrimeRénov’ financial aid has increased by an additional €1,000 for the installation of a renewable energy boiler. This can now reach €11,000 for the most efficient boilers (pellet boiler, combined solar system) and for households with modest incomes.

It must be noted that the installation of a very high energy performance gas boiler will no longer be eligible for MaPrimeRénov’ as of January 1st, 2023.

Find more details on the scheme HERE.