EXPLAINED: How your French energy bills will change in 2023
The French government has announced that the gas and electricity price shields - which helped French consumers avoid huge electricity and gas bills following the Russian invasion of Ukraine - will be done away with.
France's minister for public accounts, Gabriel Attal, told RTL on Thursday that the country will begin to gradually phase out its cap on electricity price rises.
Previously, the minister of economy, Bruno Le Maire, had said the electricity price cap would remain in place until at least the start of 2024, and that gas price caps would be phased out at some point in 2023.
In order to protect French households and businesses from extreme price increases in gas and electricity, the government put into place an 'energy price shield' which capped price rises for domestic gas and electricity at four percent in 2022 and then 15 percent at the start of 2023.
Experts estimate that without the cap on electricity price rises, French households would have seen their bills jump by 35 percent in 2022 and 100 percent in 2023, according to Ouest France.
However, these government aids will be coming to an end. Attal said that the price shield for gas was done away with at the start of July, and that the one for electricity will be slowly phrased out over the course of a year and a half, so that by the end of 2024 it is no longer in existence.
The minister explained that the government must "make savings" and "get out of the specific arrangements that were put in place during a time of crisis". Maintaining the price shields reportedly cost the French government an estimated €110 billion between 2021 and 2023.
Here is how that will affect consumers in France:
Gas bills
Consumers likely will not see huge changes to their gas bills, even though the shield against price hikes for domestic gas was discontinued at the start of July.
French government officials had been discussing plans to get rid of the gas price shield "in 2023" since April, when the minister of economy first made the announcement.
At the time, gas market prices had already begun to drop significantly. Emmanuelle Wargon, the President of the French Energy Regulatory Commission, said on Franceinfo the country was "back to prices before the introduction of the shield in October 2021".
She told Franceinfo: "we don't even need the tariff shield because prices are low. They'll stay low until the end of the year and they'll be low next year".
As a result, Wargon recommended that consumers look into fixed price offers which can last between one to four years. This is not the same as a 'regulated price offer', which was done away with at the end of June. The change affected just five percent of households in France, and if you were one of them, you should have received a letter informing you that you would need to switch plans.
READ MORE: France to end 'regulated tariff' options for gas in June
However, if there is a sharp rise in prices, "the government has indicated that it may be necessary to reintroduce the gas tariff shield", Céline Regnault, the head of Consumer Affairs for Engie, told Le Parisien at the end of June 2023.
An energy analyst, Nicolas Goldberg, told Franceinfo that the market prices for domestic gas dropped largely because Europe has managed to diversify its supply of natural gas. As such, "there is less uncertaintly about supply", he told the French news outlet.
Electricity bills
According to a recent report by Les Echos, electricity tariffs in France are set to rise by 10 percent on August 1st, which would lead to average increases of about €150 per year, according to BFMTV.
The general public will be affected by the price rise, including households and small businesses.
As for the remainder of how the French government plans to phase out the electricity price shield, Attal said that the process would start immediately and continue slowly until the end of 2024. Attal promised that it would not "be done all at once".
Businesses
The doing away with price caps will also affect some businesses, namely small businesses that qualified for the price caps (those that have a turnover of less than €1 million per year).
Similar to households, it is unclear how much electricity bills for businesses will rise, as it will depend on how gradually the electricity price cap is phased out.
READ MORE: 6 apps to help you cut your energy use in France
The French government had put in place certain aids for individual sectors of businesses - like bakeries - which suffered from particularly high energy bills. Attal did not specify in his interview with RTL how long these would be continued.
Grants
The council for economic analysis in France recommended at the start of the week that the French government continue to offer low-income households an energy cheque.
This has been in place since 2018 in France, and thus pre-dates the inflation crisis and war in Ukraine. It awards people on low incomes a one-off yearly cash grant of between €100 and €200, paid directly into one's bank account.
🔴 @GabrielAttal : "On va mettre fin aux chèques exceptionnels, sortir du bouclier tarifaire sur les prix de l'énergie d'ici fin 2024."
Invité de @StphCarpentier1 dans #RTLMatin ⤵️ pic.twitter.com/vlJFW1qaxN
— RTL France (@RTLFrance) July 13, 2023
Nevertheless, Gabriel Attal told RTL that in order to avoid over-indebtedness, France would need to stop issuing exceptional aids to different groups of people, as was done "during the crisis of inflation".
Attal said that exceptional cheques would be done away with, but he did not specify which ones would fall under this category. As the energy cheque for low-income households has been in place for several years and was not exceptional to the inflation period, it may be viewed differently.
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France's minister for public accounts, Gabriel Attal, told RTL on Thursday that the country will begin to gradually phase out its cap on electricity price rises.
Previously, the minister of economy, Bruno Le Maire, had said the electricity price cap would remain in place until at least the start of 2024, and that gas price caps would be phased out at some point in 2023.
In order to protect French households and businesses from extreme price increases in gas and electricity, the government put into place an 'energy price shield' which capped price rises for domestic gas and electricity at four percent in 2022 and then 15 percent at the start of 2023.
Experts estimate that without the cap on electricity price rises, French households would have seen their bills jump by 35 percent in 2022 and 100 percent in 2023, according to Ouest France.
However, these government aids will be coming to an end. Attal said that the price shield for gas was done away with at the start of July, and that the one for electricity will be slowly phrased out over the course of a year and a half, so that by the end of 2024 it is no longer in existence.
The minister explained that the government must "make savings" and "get out of the specific arrangements that were put in place during a time of crisis". Maintaining the price shields reportedly cost the French government an estimated €110 billion between 2021 and 2023.
Here is how that will affect consumers in France:
Gas bills
Consumers likely will not see huge changes to their gas bills, even though the shield against price hikes for domestic gas was discontinued at the start of July.
French government officials had been discussing plans to get rid of the gas price shield "in 2023" since April, when the minister of economy first made the announcement.
At the time, gas market prices had already begun to drop significantly. Emmanuelle Wargon, the President of the French Energy Regulatory Commission, said on Franceinfo the country was "back to prices before the introduction of the shield in October 2021".
She told Franceinfo: "we don't even need the tariff shield because prices are low. They'll stay low until the end of the year and they'll be low next year".
As a result, Wargon recommended that consumers look into fixed price offers which can last between one to four years. This is not the same as a 'regulated price offer', which was done away with at the end of June. The change affected just five percent of households in France, and if you were one of them, you should have received a letter informing you that you would need to switch plans.
READ MORE: France to end 'regulated tariff' options for gas in June
However, if there is a sharp rise in prices, "the government has indicated that it may be necessary to reintroduce the gas tariff shield", Céline Regnault, the head of Consumer Affairs for Engie, told Le Parisien at the end of June 2023.
An energy analyst, Nicolas Goldberg, told Franceinfo that the market prices for domestic gas dropped largely because Europe has managed to diversify its supply of natural gas. As such, "there is less uncertaintly about supply", he told the French news outlet.
Electricity bills
According to a recent report by Les Echos, electricity tariffs in France are set to rise by 10 percent on August 1st, which would lead to average increases of about €150 per year, according to BFMTV.
The general public will be affected by the price rise, including households and small businesses.
As for the remainder of how the French government plans to phase out the electricity price shield, Attal said that the process would start immediately and continue slowly until the end of 2024. Attal promised that it would not "be done all at once".
Businesses
The doing away with price caps will also affect some businesses, namely small businesses that qualified for the price caps (those that have a turnover of less than €1 million per year).
Similar to households, it is unclear how much electricity bills for businesses will rise, as it will depend on how gradually the electricity price cap is phased out.
READ MORE: 6 apps to help you cut your energy use in France
The French government had put in place certain aids for individual sectors of businesses - like bakeries - which suffered from particularly high energy bills. Attal did not specify in his interview with RTL how long these would be continued.
Grants
The council for economic analysis in France recommended at the start of the week that the French government continue to offer low-income households an energy cheque.
This has been in place since 2018 in France, and thus pre-dates the inflation crisis and war in Ukraine. It awards people on low incomes a one-off yearly cash grant of between €100 and €200, paid directly into one's bank account.
🔴 @GabrielAttal : "On va mettre fin aux chèques exceptionnels, sortir du bouclier tarifaire sur les prix de l'énergie d'ici fin 2024."
— RTL France (@RTLFrance) July 13, 2023
Invité de @StphCarpentier1 dans #RTLMatin ⤵️ pic.twitter.com/vlJFW1qaxN
Nevertheless, Gabriel Attal told RTL that in order to avoid over-indebtedness, France would need to stop issuing exceptional aids to different groups of people, as was done "during the crisis of inflation".
Attal said that exceptional cheques would be done away with, but he did not specify which ones would fall under this category. As the energy cheque for low-income households has been in place for several years and was not exceptional to the inflation period, it may be viewed differently.
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