The French Prime Minister Elisabeth Borne announced that France will limit gas price increases to 15% in January and electricity price increases to 15% in February.
The French government also provides one-off payments up to 200 euro which will receive about 12 million families.
“We will extend the tariff shield mechanism for all households in 2023 ″. Prime Minister Elisabeth Borne unveiled her plan to protect household budgets from soaring energy prices on Wednesday 14 September. The head of government also drew up an inventory of energy production in France.
Exceptional energy checks will be paid by the end of the year. This aid will concern 12 million poorest families, or four out of ten families and the amount will be 100 or 200 euros depending on income. “
“These price increases will lead to an average increase in bills of around 25 euros per month for families who heat with gas, and approx 200 euro per month without tariff shield. And an average increase of 20 euro per month for families who heat with electricity instead of 180 euro per month without tariff shield “.
The French gas system can cope with the demand for an “average” winter, that is not too cold, by contributing to the European “solidarity” system, the network operators GRTgaz and Terega affirm in a statement. In the event of a very cold winter, the gas deficit for the period could reach 5% of French winter demand. Cold shots are easier to manage in the early part of winter due to the increased storage-injection capabilities.
“Only European sobriety and solidarity will allow us to avoid cuts and rationing” of gas in case the next winter were to be very cold from the point of view of temperatures, said the French Prime Minister, Elisabeth Borne. The premier again appealed to everyone’s spirit of responsibility to reduce consumption.
“If everyone assumes their responsibilities, if they demonstrate the necessary sobriety, there will be no cuts ”, assured Borne, adding that “My government’s first challenge is to make sure there will be enough gas and electricity for the French this winter.”
Meanwhile, France is working on the ability to send 100 GWh/ day of natural gas in Germany starting in October, the head of GRTgaz said, Thierry Finds at a press conference. It would pass through a pipeline previously used to send flows from Germany to France.
While the French electricity grid operator, RTE does not exclude the risk of cuts, but states that this could be avoided “lowering national consumption from 1 to 5% in most cases, and up to 15% in the most extreme climatic situations “.
Without aid, energy prices will rise by 120% in 2023
The announced measures will cost the government 16 billion euros in 2023, the finance minister said Bruno the Mayor. Prices would have risen 120% with no limit to the price of the electricity and gas bills, Le Maire added. The state will also continue to deliver subsidies, with a one-time payment of up to € 200 each to the poorest 12 million families, Prime Minister Elisabeth Borne said.
The French government was among the first in Europe to implement measures to protect consumers and businesses from the surge in energy prices, starting in October 2021. Although the caps on electricity and gas prices have proven to be effective in curbing inflation relative to the rest of the euro area, the cost to the state soared after Russia invaded Ukraine.
With public finances already under pressure from deteriorating growth prospects, the government aims to curb support by avoiding further damage to the economy. President Emmanuel Macron must also navigate a difficult political environment after losing his absolute majority in the National Assembly and as opposition parties are mulling over demanding higher wages.