Companies and communities "could not wait": the government announced, Thursday, October 27, new aid to support them in the face of the explosion of their energy bills, with a total envelope of nearly 12 billion euros.

For weeks, employers' organizations and communities have been sounding the alarm, taking turns in Bercy with the Ministers of the Economy Bruno Le Maire and the Energy Transition Agnès Pannier-Runacher to negotiate new aid.

"Our businesses and our communities could not wait"

President Emmanuel Macron announced Wednesday evening on France 2 new devices, the details of which were clarified Thursday during a press conference in Matignon.

The government seeks above all to obtain a structural drop in energy prices on a European scale, but Prime Minister Élisabeth Borne declared that it was "essential to give visibility to all the players".

"Our businesses and our communities could not wait," she said.

For VSEs that do not benefit from the tariff shield, SMEs, associations, communities and public establishments, we are setting up an electricity buffer.



The State will cover half of the additional costs above a market price of €325 per MWh.

pic.twitter.com/kOkRu425Bo

— Elisabeth BORNE (@Elisabeth_Borne) October 27, 2022

The first device, completely new and which will come into force on January 1, has been called "electricity shock absorber" and aims for the State to take charge of part of the 2023 bill for small and very small businesses, but also for local authorities. territories, hospitals, universities and associations.

The State cuts their electricity bill in two: one part (between 40 and 60% approximately) is billed by suppliers at the favorable Arenh rate (regulated access to historical nuclear electricity), the other is exposed to market prices, which have reached record highs, sometimes over 1,000 euros per megawatt hour, in recent months.

This shock absorber provides that the State bears up to 50% of the part of the electricity bill of companies exposed to the markets, when the price invoiced exceeds 325 euros per megawatt hour.

"Incorporating the nuclear share (the Arenh tariff, editor's note), this corresponds to coverage from an average price per MWh of 180 euros," said Prime Minister Elisabeth Borne on Thursday.

“This relief could therefore reach 120 euros per MWh”, added Bruno Le Maire.

The second measure consists in simplifying a device that already exists but is far too complex and therefore underused until now.

A one-stop shop will come into force on November 15 and will allow companies whose energy bills (gas, electricity but also heat and cold) have increased by at least 50% in 2022 to obtain assistance, with the possibility of requesting a deposit.     

"Without increasing the deficit"

This counter is mainly intended for medium-sized companies (ETI) but the others will also have access to it for gas.

The existing ceilings will also be raised and a company will be able to receive up to 100 million euros in aid while Bercy is negotiating with Brussels to simplify and widen access to aid.

Finally, with regard to local authorities, the government will extend in 2023 and strengthen the safety net already in place to compensate for the increase in their operating expenses.

He will present an amendment to the finance bill to this effect.

This new aid will not widen the deficit, according to Elisabeth Borne.

Of the nearly 12 billion euros announced, 7 billion in particular will come from "annuities" taken from energy companies as part of an exceptional tax.

Three billion also come from an envelope already provisioned for existing aid and which has been used very little.

Finally, the remaining 1.5 billion euros have been budgeted for the safety net intended for local authorities.

At the same time, Bruno Le Maire announced that the State had decided to lower to 100 terawatt hours (TWh) the volume of nuclear electricity that EDF will have to sell at low prices to its competitors in 2023, i.e. around a third of its production.

This ceiling was 100 TWh in 2021 and had been raised to 120 TWh this year to help contain the rise in electricity prices on bills, but the electricity giant is heavily in debt and announced in the morning a further increase in the financial impact of its drop in nuclear production this year.

"It is consistent with the commitments we have made," said Mr. Le Maire, announcing this measure on the Arenh, a mechanism which obliges EDF to sell an annual quota of nuclear electricity at low cost to its competitors.

With AFP

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