France vows to ‘contain’ soaring electricity costs as prices rise over nuclear reactor shutdowns, Ukraine war
- The energy price cap, in place until the end of 2022, will soften the blow for households ahead of next year’s ‘contained increase’ price hikes
- Shutdown of French nuclear reactors, higher energy prices from the Russian invasion of Ukraine have raised costs in France
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The Paris government has put in place an energy price cap to shield households until December 31 and Bruno Le Maire said that next year, expected hikes would be “contained increases”.
“The four per cent cap will be maintained to the end of the year,” he told a ruling coalition conference in the eastern city of Metz.
Le Maire also said access to a three billion euro fund for businesses unable to meet energy bills would be made easier.
France to build 6 nuclear reactors as part of climate goals
But the war is not the only culprit in France, where nuclear energy currently covers some 70 per cent of the nation’s electricity needs.
The shutdown of several nuclear reactors due to corrosion issues has contributed to the French electricity price increase.
Traditionally an exporter of electricity, France is now an importer.
The year-ahead contract for French electricity on Friday surged past 1,100 euros (US$1,096) per megawatt hour (MWh), a more than tenfold increase on last year.
In Britain, energy regulator Ofgem said it would increase the electricity and gas price cap almost twofold from October 1 to an average £3,549 (US$4,197) per year.
Europe’s energy crisis is taking its toll on industry and homes
Ofgem blamed the increase on the spike in global wholesale gas prices after the lifting of Covid restrictions and Russian supply curbs.
Energy prices have soared in Europe as Russia has slashed natural gas supplies, with fears of more drastic cuts ahead amid tensions between Moscow and the West over the war.
One-fifth of European electricity is generated by gas-fired power plants, so drops in supply inevitably lead to higher prices.
European gas prices on Friday reached 341 euros per MWh, near the all-time high of 345 euros it struck in March.
