Tribune. Across Europe, the surge in natural gas prices on the international market is causing gas bills to skyrocket for gas consumers, both individuals and businesses. But more surprisingly, it also affects electricity bills, more or less quickly and violently depending on the country.
Why is this when in France, less than 8% of electricity is produced from gas (20% in Europe)? Why is the bill soaring faster in certain European countries? How to deal with it in the short and medium terms? To answer these questions, it is necessary to analyze three distinct indicators: the cost of production, the wholesale price and the retail price which determines the customers’ bill.
In France, with 70% nuclear and 22% renewable electricity, around 80% of the production cost is fixed, independent of the quantity produced: these are the costs of building, operating and maintaining power plants. The price of gas only accounts for around 7% of this production cost, a proportion of the same order as in Germany.
The wholesale price, which serves as a benchmark for transactions between producers and suppliers of electricity, appeared with the opening of the markets. It is European, which is why the surge in wholesale prices concerns all the countries of the Union, even if congestion on the network at certain times can cause price differences between countries.
Cushion the shock
This price is determined at all times by the highest production cost of all the power stations on the European interconnected network. As it is often a gas power station, this price is indexed to the price of gas, and therefore reflects its volatility. It also includes the European price for CO2, which penalizes the transmitting productions. The purchase price of electricity for next year on the wholesale market has thus doubled compared to 2019 (before Covid-19), and tripled compared to 2016. It does not reflect production costs, much more stable throughout Europe and even more so in France. Nor is it the consequence of a significant change in demand for electricity.
Retail prices, for their part, include the “energy share” (production and marketing cost), ie in France a large third of the bill for private customers and half for industrial customers. The other two thirds of the bill corresponding to the network access tariff and taxes.
You have 57.53% of this article to read. The rest is for subscribers only.