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France to end ‘regulated tariff’ options for gas in June

Households who benefit from regulated tariff gas plans will have to switch to a market plan before the end of June, according to France's ministry of economy.

France to end 'regulated tariff' options for gas in June
A person lighting up a gas stove. (Photo by DAMIEN MEYER / AFP)

Some 2.4 million households in France will have to change their gas plans before June 30th, as part of France’s Energy and Climate Act.

The change will impact those who benefit from a tarif réglementé (TRV) – or regulated tariff – for their gas plan. Essentially, this is a gas supply contract that has a regulated rate set once a year by the French government, based on a recommendation from the energy regulation commission.

The premise is that as the TRV price goes up, so does the bill, and vice versa. If you are unsure as to whether you have a TRV plan and you have not received a letter, you can also consult your gas bill or contact your supplier to verify. 

These types of plans are only offered by ‘traditional’ suppliers, such as Engie and about 20 other local distribution companies in France. If you have a gas plan like this, then you should receive a letter from your supplier informing you that you will need to change your plan to a market offer.

France’s ministry of economy said that households and coproprietés (buildings divided into separately owned apartments), do not have to worry about having to cancel the contract yourself, as it will be done automatically. Additionally there will not be any gas cuts or the need to change your metre (compteur). You will, however, be advised to pick a new plan. If you do not do so, you will be automatically switched onto the generic plan offered by your gas supplier. 

READ MORE: PROPERTY: What you need to know about ‘copropriété’ fees in France

Those who benefit from regulated rates for electricity, such as the EDF ‘Blue Rate’, do not have to worry about changing their plans – this only applies to gas.

Does this impact the gas price shield in place in France?

This is not related to the existing freeze on gas price rises in France, which was capped to 15 percent at the beginning of 2023. 

However, France’s minister of economy did say in April that the price freeze for gas will be done away with sometime “this year” but did not offer any precise dates. 

Gas prices in France were frozen in 2021, initially as an aid with the rising cost of living – in the spring of 2022 the freeze was extended and electricity prices were also frozen, in order to protect French households from the spiralling energy prices seen across Europe after Russian’s invasion of Ukraine.

Domestic gas and electricity price rises were capped at four percent throughout 2022, and then allowed to rise by a maximum of 15 percent at the start of 2023.

How do I decide on a new plan?

The French government has created a website to compare plans in your area – you can find it HERE. Simply put in your postal code, as well as some information regarding your typical gas consumption or monthly bill, to find recommended results for your area. 

You should choose your new offer before the deadline of June 30th, according to the French ministry of economy. 

Keep in mind, if you choose a new plan that does not suit you, you can still cancel the plan free of charge. To set up the new plan, you will need the reference number attached to your last gas bill.

Why is this change happening?

However, France is doing away with regulated tariffs in order bring French law in line with European law. Both small and large businesses have already switched away from regulated tariffs, and now the rule will apply to individuals and co-proprietés. 

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CLIMATE CRISIS

Warning that droughts may lead to electricity shortages in France

Ongoing droughts and rising temperatures pose a serious risk to France’s electricity supplies, climate experts have warned, with the country's main sources of energy - nuclear and hydro - particularly vulnerable.

Warning that droughts may lead to electricity shortages in France

Nearly three-quarters of France’s energy is supplied by a combination of nuclear power and hydro-electric power, according to Agence ORE (Opérateurs de Réseaux d’Énergie), a group made up of all of the country’s electricity and gas distributors.

Its figures reveal nuclear power supplies 63 percent of France’s energy needs, while hydro-electric operations – which provided a vital energy bulwark against the possibility of blackouts in the winter – supplies a further 11 percent.

But both of those technologies are extremely vulnerable to drought.

READ ALSO Water limits, apps and leaks: How France plans to deal with future droughts

The summer of 2022 in France was marked by scorching temperatures and record droughts and the unusually dry winter has failed to recharge groundwater supplies. Such events are predicted to become more and more common in the years ahead due to the climate crisis.

The problems that drought causes for hydro-electric power are self-explanatory, but low water levels are also a problem for nuclear power plants.

Nuclear

When France was hit by an early heat wave in May last year, EDF slowed down one of the reactors at a power plant on the banks of the Garonne for a few hours, so that less of the hot water – used to cool nuclear fuel in the reactor – would be released into the river. In June 2022, a plant on the Rhône did the same. These operations are not unusual, but they usually occur later in the summer. 

READ ALSO ‘Uncharted territory’: Europe faces more deadly droughts and extreme heat

In July and August the Bugey, Blayais, Golfech, Saint-Alban and Tricastin plants were granted waivers to exceed regulatory limits on the temperature of water – established to protect the fauna and flora and the functioning of the river ecosystem – discharged into rivers. 

Global warming is set to increase the duration of these droughts and heatwaves, which will affect France’s river levels as demand for electricity soars to power computers, electric vehicles, heat pumps and so on. With river levels lower, and greater demand, it is increasingly likely that more dangerously hot water will be released into French rivers.

Hydro

Hydro-electric energy is currently France’s main source of renewable electricity – and it is particularly susceptible to drought. Last summer’s long and punishing drought means annual hydroelectric production to plunge to its lowest level since 1976 – at 49.6 TWh, according to RTE – down some 20 percent on the 2014-2019 average.

In the event of severe drought, less power is produced because the flow of water – the fuel for hydro-electric energy – is lower. And a lack of snow and rain in winter means that reservoirs are not refilled as well.

In its 2022 report, RTE said “stocks reached historically low levels in mid-July”, before returning to “average levels” in autumn. Even so, hydro-electric power was recognised in Parliament as having helped save France from feared power outages over the winter.

Electricity usage

Network operator RTE has forecast that electricity consumption will increase from 459.3 TWh in 2022 to a range of 555 to 745 TWh by 2050. 

The question is whether renewable energy supply and next-generation nuclear power stations can keep up with demand.

Experts are not convinced, and have suggested the switch to greener, renewable power should go hand in hand with greater emphasis on individual energy responsibility.

France is not new to the idea of sobriété énergétique (energy saving). Over winter, following the Russian invasion of Ukraine, France urged public officials, businesses and individuals to cut electricity use. 

READ ALSO MAP: How France cut its electricity use by 10% this winter

Many of the rules imposed – such as shops cutting power to outdoor signage at night, and keeping their doors closed to save energy – are set to remain as part of the country’s ambitious target to cut its total energy use by 30 percent by 2040.

Then, in March, President Emmanuel Macron announced plans for how France will be able to reduce water usage – with a 10 percent cut in demand sought by 2030.

READ ALSO MAP: Where in France is under water restrictions in spring 2023?

Similar to the plan for energy savings during winter 2022 – when France managed to reduce electricity consumption by around nine percent over the winter – the water saving plan will be implemented sector by sector – meaning that the energy, tourism, agriculture and heavy industry sectors (including nuclear) will be asked to come up with specific plans to decrease water consumption.

Experts say that all renewable energy will be constrained by climatic conditions – a lack of wind, heat, drought are all going to affect production. 

Although the immediate risks of power blackouts due to heatwaves and drought are considered low – “not in this decade, anyway”,  Nicolas Goldberg, energy market expert for the firm Colombus Consulting, told franceinfo – that does not mean efforts to find solutions should be kicked down the road.

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