French government announces measures to lower electricity prices

The French government announced last night the measures it intends to deploy to implement the tariff shield announced last autumn and to limit the impact of rising electricity prices on companies.

The first measure consists of a reduction in the TICFE, the full rate of which will fall from €22.5/MWh to €0.5/MWh between 1 February 2022 and 31 January 2023, i.e. a reduction of €22/MWh for consumers subject to this rate.

The second measure, negotiated with EDF and the European Commission, will involve raising the ARENH ceiling by 20 TWh. The additional ARENH volumes will be sold by EDF to alternative suppliers at 46.2 €/MWh, compared to 42 €/MWh for the first 100 TWh, which will remain at the initial price. These volumes should be put on the market from 1 April 2022 for 9 months. On average, the ARENH capping should therefore decrease from 37.52% to 25.02% in 2022.

The operational implementation of this last measure remains to be determined, in particular in the context of the application of supply contracts for which all volumes have already been fixed for the year 2022.