Electricity prices: another increase, how much and for whom?


Electricity prices: another increase, how much and for whom?

ELECTRICITY PRICE. The increase in the price of electricity will weigh even more on the purchasing power of households in 2023. On average, the bill will rise by 20 euros every month.

[Updated Feb 3, 2023 8:09 AM] The ax has fallen. The increase in the price of electricity has been effective since February 1, 2023. Indeed, the extension of the price shield to protect households against an excessive increase in energy prices is changing. Prices are still contained, of course, but now up to 15% increase, against 4% until then. 20 million households are affected, and 1.45 million small professionals. Without the government aid scheme, the increase could have reached 99.22%. This increase affects all subscribers to a regulated sales contract (TRV), and those whose prices are indexed to the TRV. VSEs and SMEs are concerned. It represents an additional cost of 20 euros per month, on average, according to government figures. For the time being, this system is scheduled until June 30, 2023. Important to know, customers who do not wish to modify their monthly payments despite the price increase can wait until the end of the year, and be subject to an adjustment.

As announced by the government on September 21, the price of electricity will increase significantly from February 2023 with a 15% increase. This price hike should represent around 20 euros more, each month, on your bill. A surge in energy prices that the government has already tried to contain with the extension of the tariff shield beyond the year 2022. This tariff shield which made it possible to contain the rise in prices up to 4% has increased to 15 % from February 1, 2023.

In an attempt to help the most modest households, the government has also decided to set up a brand new system: an exceptional energy check. This check is in addition to the traditional energy check, but before the end of 2022 to offset the effects of the rising cost of living. 12 million households are affected. On the European level, the Prime Minister declared that "only sobriety and European solidarity will allow us to avoid rationing during a harsh winter". Another possibility to save money: MaPrimeRénov'. It is an aid for energy renovation offered by FranceRénov', calculated according to your income and the ecological gain of the work. Pellet boilers, heat pumps and the insulation of walls from the outside are particularly taken into account by the device.

The price of electricity soared in France during the month of August 2022, exceeding 1,000 euros. Direct consequence: customers of alternative suppliers find themselves trapped by this unprecedented increase because these famous suppliers are subject to the wholesale price, and its impressive fluctuations which sometimes represent up to 50% more per invoice and per customer. These suppliers are not modeled on the regulated tariff. Bottom Line: If you take out a contract with this type of energy supplier, you may end up paying a high price for the increase. Be aware, however, that a solution exists to overcome this kind of extreme situation: the principle of reversibility. In other words, you have the option of returning to an incumbent supplier, at the regulated rate, by making the request to a supplier such as EDF.

This increase in the wholesale price of electricity can be explained by the temporary shutdown of 32 French nuclear reactors and the insane rise in gas prices. If next winter turns out to be particularly cold, restrictions may be put in place, but "they will not concern households" as Prime Minister Elisabeth Borne declared on France Inter on September 2 after the Council of defense on energy security. Agnès Pannier-Runacher also made it clear that the French energy giant "EDF has undertaken to restart all the reactors for this winter". Or the 32 reactors currently shut down, enough to take the measure of the exceptional situation in which the country finds itself. The President of the Republic Emmanuel Macron spoke from the Elysée Palace on Monday, September 5: "The price on this European electricity market must be formed in a much more coherent way and in connection with production costs. The price of electricity on the European market is far too dependent on marginal contributions, in particular those of gas at times of peaks, which means that you have an electricity price that is disconnected from the reality of the costs of production."

Will this spike in wholesale prices have any real impact on your electricity bill? Not really. For the time being, customers of incumbent suppliers like EDF are covered by the tariff shield put in place by the government. In other words, the increase in electricity prices was capped at 4% until the end of 2022. Since February 1, 2023, the increase is now contained at 15%, again thanks to the tariff shield.

The State could also bear part of the companies' electricity bills. Indeed, faced with soaring prices, the Minister for Energy Transition Agnès Pannier-Runacher announced on Sunday October 23, 2022 on BFMTV the creation of an "electricity guarantee" which "will make it possible to take part of the bill that must be pay the companies". The government intends to "finalize this proposal" very quickly according to the minister. A guarantee that should apply to the "Arenh" part of the companies' invoice. In other words, the one that allows access to a bill around 50 euros per megawatt and which is already protected. Of the remaining 50%, the State will take “part of the cost between a reference price and the reality of the prices paid by companies. An amendment will be tabled very quickly, for start-up in 2023.

As a reminder, a new amendment to the 2023 finance bill (PLF) should allow the government to cap the price of electricity production at 180 euros per MWh. The objective is clear, to help businesses and communities that can no longer make ends meet with the announcement of the increase in energy prices. The executive should recover the difference between this new ceiling and the wholesale market price, so as to finance aid for businesses and communities. In total, between 5 and 7 billion euros should be collected. Please note that the energy crisis could cause power cuts in France this winter.

As of August 1, electricity prices have already been revised upwards. This increase is due to the evolution of the TURPE (tariff for the use of the public electricity network), a tax which aims to ensure the maintenance of the network and its modernization. The average increase is 0.91% for MV/LV consumers. It is 1.39% per year for the period of TURPE 6 (2021-2025). HTB consumers show an increase of 1.09% and 1.57% per year. Has your electricity consumption jumped in recent months? It must be said that with successive confinements, sometimes cooler temperatures and teleworking, there is enough to increase the final bill. In this context, are you looking for alternatives to pay less? Linternaute.com directs you to its dedicated file to compare electricity prices:

At EDF, you have the choice between regulated tariffs and market offers. In the first scenario, as explained above, prices are set by the public authorities. EDF offers three distinct offers: a basic offer (where the price per kWh remains the same whatever the time and frequency), a peak-off-peak offer (where the price per kWh is more advantageous between 10 p.m. and 6 hours) and a so-called "Tempo" offer (where the price per kWh varies according to the time of day and the days of the week).

The latter corresponds to homes with "a minimum electricity subscription of 9 kVA [and which have] an alternative heating mode, such as wood heating for example", we explain on the EDF site. To find out about EDF's market offers, visit the website. Want to know more about how electricity prices are calculated? We answer your questions. Looking to switch providers in the current environment? Consult our dedicated file before you start:

If we rely on the latest data from Eurostat, the price of kWh in France will reach 0.1946 euros in 2021, much less than the average for the 27 countries of the European Union (0.2203 € / kWh). The tariff is much higher in countries such as Germany (€0.3193/kWh), Denmark (€0.2900/kWh) and Belgium (€0.2702/kWh).

* OlaWatt is a site of the Le Figaro-CCM Benchmark group, like Linternaute.com

It can sometimes be very difficult to tell the difference between the different offers on the market, as there are so many parameters to take into account (read above).

You can also visit the website of the national energy mediator: energie-info.fr. You will find in particular a comparator, here, in which you will have to specify your current tariff option, the power subscribed and your electricity consumption. UFC-Que Choisir also offers a comparator, here. You will then obtain an informative list of the most advantageous offers according to your profile. When you compare offers, always bear in mind the power you subscribe to, the type of pricing you want and your annual consumption (expressed in kWh).

Looking for another comparator? Olawatt by BeMove* also offers a comparison tool. You must enter your address, as well as your annual consumption and then your contact details to receive a summary of your request.

Are you looking to undertake energy renovation work in your home? Do you know My Prime Renov'? This system was put in place last year to replace the energy transition tax credit (CITE). Since January 1, this famous bonus concerns all households, regardless of their level of income. The amount of financial assistance, paid at the end of the work, depends on the household's resources, the location of the accommodation and the nature of the work. To learn more, see our dedicated article:

In addition to taxes, the price of electricity that you will pay depends on multiple factors. Linternaute.com summarizes the criteria for you:

Want to know more about what makes up the price of electricity? Consult our dedicated file:

Total, Direct Energie... What alternatives to EDF?

Looking to leave EDF's regulated tariffs? You're not the only one: every month, 100,000 customers say goodbye to them, according to the Energy Regulatory Commission. By changing supplier, large consumers, who consume 8,000 kWh, can save "a hundred euros" per year, according to 60 million consumers in its October 2019 edition. Total Direct Energie, Eni, Happ-e de Engie, EDF… Whether you lean towards a market offer or regulated tariffs, you can find all the offers online.