Increase of 10% of the regulated gas tariff in July, alert on the electricity market: the energy bill of French may flare up in the coming months.
The regulated sales tariff (TRV) for natural gas supplied by Engie will increase “9.96% before tax on July 1, 2021”, the Energy Regulatory Commission (CRE) announced on Friday. “This sharp increase is mainly due (for 7.8%) to the rise in gas prices on the world market linked to the economic recovery”, she explains.
The recovery is boosting demand … and therefore prices
CRE details the reasons for this increase in the markets: recovery which is boosting demand, low levels of gas stocks, maintenance operations in the North Sea, increase in gas consumption for electricity production, etc.
The other big factor is the rising cost of Energy Saving Certificates (EECs), a device that requires suppliers to finance energy savings.
The government recently revised upwards the energy saving objectives, as well as the share intended for the most vulnerable.
This sharp increase in regulated gas prices, which are due to disappear in 2023, but still affect a third of subscribers, is however after a period of decline during the crisis. In the end, they have only increased by 1.1% since January 1, 2019, says CRE.
Few predictions for consumers
But the changes in gas prices, announced from month to month, create significant volatility for consumers. “You know just ten days before the coming month what sauce you are going to be eaten in terms of pricing, and that makes it almost impossible for you to have budgetary predictability on this expense item which is relatively important”, notes Antoine Autier, deputy head of the Studies department at UFC-Que Choisir.
The consumer defense association has also recently pointed to an increase of nearly 50% in ten years of the regulated tariff for the sale of electricity, which still concerns the vast majority of subscribers.
“An average household heated by electricity at TRV will have seen their electricity bill drop from € 1,019 to € 1,522 between 2010 and 2020”, calculated the UFC.
Network investments to be financed
However, this increase is probably not over. The regulator has already announced an increase in the future tariff for the use of electricity networks, one of the components of the bill, to finance investments in the transmission (RTE) and distribution (Enedis) network.
CRE had thus calculated in December “Average tariff increases of 1.57% per year for RTE and 1.39% per year for Enedis, ie an increase of around € 15 in a private individual’s annual bill by 2024”.
Market price “explosion”
These grid-related increases are usually reflected in the regulated tariffs on August 1. CRE is also announcing a tariff change on February 1, which this time reflects the evolution of electricity prices on the markets.
However, some observers expect an increase in February. “What is almost certain is that it will be very important”, says Frank Roubanovitch, chairman of the Liaison Committee for Electricity Consuming Companies (CLEEE).
“Market prices are exploding at the moment, since in a few months we have gone from 40 € (per MWh) to 72 €”, he notes.
These prices on the market reflect the evolution of the prices of carbon and certain raw materials such as gas.
Cheap nuclear electricity
In addition, “There is an increasing exposure of alternative suppliers to market prices rather than nuclear, which leads to quasi-structural increases”, also regrets Antoine Autier.
EDF’s competitors indeed have access to nuclear electricity produced by the historical player at a fixed and rather cheap price (€ 42 per MWh).
But this mechanism is capped and represents less than 30% of EDF’s production. An increase in this cap would make “Mechanically lower prices”, pleads M. Autier.
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