What is the current megawatt-hour market price? Electricity: Why is your bill unlikely to skyrocket in the coming months?
The megawatt-hour market price is exploding, but rest assured, your electricity bill is not fully correlated to it.
Surge in the electricity market in France. In one year, the wholesale price has increased from 85 euros to more than 1,000 euros per megawatt hour for 2023. A 12-fold increase that has enough to worry households, already suffering from rampant inflation. Across the Channel, by the way, the news is enough to scare: the United Kingdom announced an 80% increase in energy tariffs as early as October.
Can such a scenario reach our borders? "The price of the bill should increase in the coming months, but they will never be multiplied by 12," reassures Lamis Aljounaidi, energy economist and head of the consulting company Paris Infrastructure Advisory from the outset.
Megawatt-hour market price
The expert dissects for us an electricity bill, which can be divided summarily into three parts. First, the cost of energy distribution and transmission. The latter is increasing a little, due to the renewal of a now outdated network, but on the order of 2-3% per year. Not enough to blow the price out of your budget. Secondly, the contribution to the public electricity service (CSPE), which helps to finance renewable energies, the additional cost of electricity production in non-metropolitan areas and the energy check for the most modest households. This share will logically increase with the increase in precariousness in France, but it should also be a contained increase.
Thirdly, the price of energy itself. It is divided into two (courage, we come to the end): the cost of marketing – which tends to increase at the same rate as inflation (6% in about a year), and the cost of electricity itself, namely the cost of ARENH (the historic nuclear, at a generally stable price) and the famous market cost, the same one that has been multiplied by twelve.
Megawatt-hour market price results
As a result of this autopsy, "the share subject to the market price remains low, 5 to 10% of the bill. Only this share will be impacted by the sharp price increases observed on the electricity market," Lamis Aljounaidi demonstrates. So there's no need to imagine adding a zero to your bill.
Sophie Meritet, lecturer in economics (with HDR), energy specialist, also reassures: "In July, the megawatt hour was already at 800 euros without worrying anyone. This is a back-to-school panic, but the bill should not increase that much".
Even more so with the tariff shield. This one should keep the French safe, at least as far as EDF's customers are concerned. And this is thanks to the "blue tariff", explains Patrice Geoffron, professor of economics at Paris-Dauphine University: the price of electricity for individuals is regulated by the public authorities. The blue tariff is at 174 euros per megawatt hour, far from the 1,000 euros on the market.
Alternative suppliers, such as Engie or Total, are divided into two categories: those that operate at regulated electricity rates, which are therefore also affected by the tariff shield, and those that depend solely on the market price. For the latter, the bill could increase massively. Not tenfold either, once again: "There is a 'shock absorber' linked to the fact that EDF had to sell quantities of its nuclear electricity at 'broken' prices to other suppliers," says Patrice Geoffron.
Megawatt-hour market price in 2022
However, many alternative suppliers no longer take on new customers, or even advise their own to return to EDF for the current year, Sophie Meritet informs.
The tariff shield is due to end in early 2023. What can only shift the problem? Raphaël Boroumand, professor of economics at the Paris School of Business, cannot believe it: "An 80% increase like in the United Kingdom, which would plunge millions of citizens into energy poverty, seems impossible to me. We have seen with the crisis of the "yellow vests" how a few cents on gasoline can bring people into the street. In such a tense social context, the government will never let the electric bill increase so much. "The Minister of the economy, Bruno Le Maire, has been very clear; he and the president of the Renaissance deputies, Aurore Bergé, assuring that even in 2023, the electricity bill would not soar by 30 to 50%. The Prime Minister, Elisabeth Borne, however warned this Tuesday evening on TMC that there would "certainly be price increases at the beginning of 2023".
In parallel, new aids, another solution can be considered: drastically reduce consumption, aka the famous energy sobriety. Elementary idea: if we no longer buy electricity, it does not cost us much. What if France self-supplied? Not easy. Already, the country has become a net importer, and, given the state of its nuclear fleet – more than half of the reactors are shut down for maintenance or repair – it may still be shut down, says Patrice Geoffron, "especially in the event of a cold winter", sober or not.
Megawatt-hour market price in France
Moreover, even if France was self-sufficient, "a significant part of electricity passes through the market since the opening of energy markets," Lamis Aljounaidi says. So even if we only take French electricity, part of the bill would be related to this transition from 85 to 1,000 euros per megawatt hour.
Despite these two nuances, "a decrease in consumption remains one of the most effective levers to combat soaring prices and reduce the rise in bills. The less we buy, the easier it is for the state to give aid," agrees Raphaël Boroumand.
But is this the meaning of the story?. "The trend is towards an increase in electricity consumption, which remains the cheapest energy for households, compared to gas or gasoline," Lamis Aljounaidi supports: "Thus, it should be interesting for households to opt for electric heating to lower their gas bill and to switch to an electric or hybrid car to lower their fuel cost. "In full contradiction.
Language Model Dialogue Applications
Dyson Purifier Cool Formaldehyde