Wholesale electricity prices in France rise as energy crisis hits Europe

The wholesale price of electricity in France jumped on Friday August 26 to reach more than €1,000 per megawatt hour, around 12 times more than last year’s prices which were around €85 per megawatt hour.

The problem is not limited to France and all of Europe is concerned, including the United Kingdom.

This is partly due to Russia’s invasion of Ukraine, which caused problems with gas supplies to Europe. A fifth of Europe’s electricity is produced by gas-fired power stations, AFP reported.

In France specifically, the problem is slightly different. The country gets around 70% of its electricity from its own nuclear power plants.

However, less than half of the 56 reactors are currently online. The majority are closed for maintenance, while 12 of them have been offline for several years due to corrosion issues.

The Czech Republic, which currently holds the rotating presidency of the Council of the European Union, has called for an emergency EU energy summit as soon as possible.

Earlier this week, French President Emmanuel Macron spoke of the “end of the era of abundance”, warning of difficult times ahead.

“The breaking of value chains, the shortage of this or that material or technology, the end of an abundance of land and resources, and that of water too, all this reappears,” he said on Wednesday. August 24 at the first cabinet meeting after the summer.

“We live at the end of what might seem like [an age] of abundance, of endless cash flow, the consequences of which we now have to deal with in terms of public finances, of an abundance of products and technologies which seemed to be perpetually available.

Read more: Macron: “France is at the end of its age of abundance”

End of tariff shield?

France currently has a price cap in place to stop soaring household energy prices. The government has spent tens of billions on this.

The measure is currently due to end on December 31. It is not yet known if it will be extended.

The French newspaper Ouest-France reports that the shield against rising prices could be replaced by targeted financial assistance for low-income households.

Read more: France will offer cheap electricity to those who reduce their consumption during peaks

National energy saving plan

Mr. Macron in a speech on July 14 mentioned the implementation of an “energy saving plan” at the national level (an energy sobriety plan).

Read more: Ukraine, energy, pensions: the key points of Macron’s interview on July 14

The government is due to unveil this plan in early September with the aim of reducing energy consumption by 10% compared to 2019 levels.

To address the energy crisis, six working groups have been created which will work with key players in their respective sectors to introduce energy saving measures.

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