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ENERGY

France vows to ‘contain’ surging electricity costs

France's finance minister pledged Saturday to keep electricity costs in check for consumers as European energy prices soar.    

aerial view of high voltage lines in france
Aerial view taken on July 29, 2022 showing high voltage lines near Saucats, in southwestern France. French power prices have surged following Russia's invasion of Ukraine and amid lengthy nuclear shutdowns. Photo: Thibaud MORITZ / AFP

The Paris government has put in place an energy price cap to shield households until December 31 and Bruno Le Maire said that next year, expected hikes would be “contained increases”.

“The four percent cap will be maintained to the end of the year,” he told a ruling coalition conference in the eastern city of Metz.

“There will be no catch-up of costs on the ceiling in 2023,” he vowed after President Emmanuel Macron had on Wednesday warned of energy price hikes.

Le Maire also said access to a three billion euro fund for businesses unable to meet energy bills would be made easier.

European electricity prices soared to new records this week, presaging a bitter winter as Russia’s invasion of Ukraine inflicts economic pain across the continent.

But the war is not the only culprit in France, where nuclear energy currently covers some 70 percent of the nation’s electricity needs.

The shutdown of several nuclear reactors due to corrosion issues has contributed to the French electricity price increase.

READ ALSO: France extends shutdown of four nuclear reactors amid corrosion problems

Traditionally an exporter of electricity, France is now an importer.

The year-ahead contract for French electricity on Friday surged past 1,100 euros ($1,096) per megawatt hour — a more than tenfold increase on last year.

Energy prices have soared in Europe as Russia has slashed natural gas supplies, with fears of more drastic cuts ahead amid tensions between Moscow and the West over the war.

One-fifth of European electricity is generated by gas-fired power plants, so drops in supply inevitably lead to higher prices.

European gas prices on Friday reached 341 euros per MWh, near the all-time high of 345 euros it struck in March.

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ENERGY

Gas bills to rise by over 11% in France in July

For households that use gas for heating, cooking or hot water, bills will go up again in July as regulators increase tariffs.

Gas bills to rise by over 11% in France in July

Starting on July 1st, gas bills will increase for the 10.5 million households in France which either heat with gas or use it for cooking and hot water.

France’s energy regulatory commission (Commission de régulation de l’énergie, or CRE) announced on Monday that the estimated increase for the benchmark price in June to July would be 11.7 percent. 

The price increase is related general market trends, but it also has to do with French consumption of gas dropping.

“We are witnessing the gradual exit from fossil fuels, with some consumers switching to electricity. In the meantime, those who remain on gas are fewer in number, but they must bear the costs,” Jacques Percebois, an economist with a speciality in energy, told Ouest France.

In France, the price one pays for gas includes the cost per kilowatt of consumption, taxes and the cost of delivery, with the base rate set by the regulator.

How much will my bills increase by?

The average household in France consumes 1,123kWh of gas per month, giving them a current monthly bill of around €124.

With the price increase, this bill will go up by about €14.80, with a little over half of that owing to the cost of distribution and about a third due to the increase in prices on wholesale markets, according to Ouest France’s calculations.

For those only using gas for cooking and hot water, the average monthly bill would go up from €20 to €23.30 a year.

Ultimately, the exact amount your bill will go up by will depend on your supplier, although companies tend to have broadly similar tariffs. 

Will the cost keep going up?

Experts expect the benchmark price to increase again by approximately 10 percent in August. However, it is also worth noting that expected prices dropped between February and June, according to MoneyVox.

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