Increase in electricity prices, why? And how to react?

Although the government wants to be reassuring, we are entitled to a new price increase of 10% in August after the 15% in February. However, it would seem that this evolution is not due to external phenomena, but indeed to the French market. We detail here the reason for this increase, and above all how to limit its impact.

On August 1, 2024, France will experience a 10% increase in the regulated price of electricity. A new increase despite an energy shield supposed to protect consumers and the government’s promise that the prices of this energy should not increase by more than 15% in 2023. However, the regulated price has already undergone a 15% increase on February 1 2023, which makes us almost 30% over the year…

A not-so-protective shield

Since the outbreak of war in Ukraine, energy prices have exploded. Thus, before the conflict, electricity prices were between 50 and 70 euros per megawatt-hour compared to 90 to 200 euros currently and we went through peaks at 1,000 euros per megawatt-hour!

The French suffered much less from these hazards thanks to the tariff shield put in place from the start of the Russo-Ukrainian conflict in 2022. This system makes it possible to freeze the regulated sales tariff and limit the increases which have sometimes exceeded 50% in one year with our European neighbours. Currently, according to Bercy, the government covers around 37% of the French bill and Emmanuelle Wargon, president of the Energy Regulation Commission (CRE), ensures that, without this shield, our bill would have increased by 99% .

However, the government announces that the tariff shield will be abandoned in 2025. According to the government and CRE, the latest increase is not related to the vagaries of the European energy market. This increase in electricity prices in France will apply to all households, traders, craftsmen, small VSEs with meter power up to 36 kVa (kilovolt-amperes). This should increase the average bill of the French by 160 euros per year.

Although no further increases are expected before February 1, 2024, new households are likely to join those already living in fuel poverty. Today, according to ADEME, the poorest 20% of households spend 2.5 times more of their budget on energy than the richest 20%.

Increase to secure the future?

While on the wholesale electricity tariff plan seems to be stabilizing, if not actually falling. According to the CRE, this increase has its origins more internally than externally.

Thus, part of the increase is due to the increase in electricity supply costs. Within the framework of the development of renewable energies, it is necessary to enlarge and renovate the distribution network. These expenses are gathered around the TURPE which represents 30% of its bill and increases by 6.51% on August 1st.

Then, we have EDF’s marketing costs which are increasing following expenses linked to the health crisis, such as the maintenance of nuclear power plants. An increase in arrears among individuals is also highlighted by the CRE.

Finally, over the next 15 years, Enedis estimates that it will have to invest 69 billion euros and RTE more than 30 billion euros. And, by 2035, this figure will reach 33 billion euros for RTE and around 100 billion euros by 2040 for Enedis. Huge sums, which represent two to three times the budget planned for the construction of the six future EPRs (between 52 and 56 billion euros).

This highlights above all the enormous funding needs, which European constraints do not facilitate. Like the European electricity market indexed to the price of gas, which remains an aberration in a country in which the electrical energy mix is more than predominantly nuclear. Add to that the obligation made to EDF to sell off part of its energy for the benefit of alternative operators. A situation that will have to change, because consumers will not be able to support future investments on their own. Good news : a priorithis is the last increase of the year, but January 1, 2024 is a whole different story…

How to react to this increase?

Faced with this new increase and if you have not already done so, take the time to monitor and analyze your consumption via the application of your energy supplier. After that, check that your contract is in line with your energy uses.

Having done this, you can now compare the offers of the various operators on the market. Knowing that the reference remains EDF, the incumbent operator, with its regulated electricity tariff. Please note that the majority of operators in France do not produce electricity and are supplied by EDF at scandalously low prices and on the European energy market. So pay attention to the terms of the contract and the guarantees offered at the level of the kilowatt-hour rates. In addition, analyze off-peak offers to see if they can help you limit your expenses.

Then, you can act on a daily basis, for example by carrying out an energy renovation, by turning off appliances on standby or by favoring the least energy-consuming appliances. You can also consult the various articles dedicated to energy and how to save it:

You can use connected objects to save money.
Or, invest in connected sockets or connected power strips, which will help you optimize your energy consumption.
It’s still summer and you may be thinking about investing in home cooling solutions. Consider investing in a connected mobile air conditioner to optimize its use and electricity consumption, without compromising your comfort.
Take advantage of sunny days to install products dedicated to heating, and thus better prepare for the arrival of winter. In the context of oil or natural gas boilers, do not hesitate to invest in connected thermostats or thermostatic heads. Note that there are connected modules for electric heating to add to optimize its use.
Do not forget water, this precious resource must be saved and even more so when it has been heated beforehand. There are many connected objects to help you consume less hot water.
You can also invest in a connected object like Ecojoko which monitors your communication in real time and allows you to implement a real energy saving strategy within the home.

Another alternative is to install solar panels for self-consumption, if the investment is not insignificant, it can only be profitable over time and you help yourself to bear the future increases which are bound to be inevitable.