The price of wholesale electricity in France surged on Friday (August 26) to reach over €1,000 per megawatt hour – around 12 times more than prices last year which were around €85 per megawatt hour.
The problem is not limited to France and all of Europe is affected, including the UK.
This is due in part to Russia’s invasion of Ukraine leading to problems with gas supply to Europe. One-fifth of European electricity is generated by gas-fired power plants, AFP reported.
In France specifically the problem is slightly different. The country gets around 70% of its electricity from its own nuclear power stations.
However, less than half of the 56 reactors are currently online. The majority are closed for maintenance, while 12 of them have been offline for several years due to corrosion issues.
The Czech Republic, which currently holds the rotating Presidency of the Council of the European Union, has called for an emergency EU energy summit as soon as possible.
Earlier this week, French President Emmanuel Macron spoke of the “end of the age of abundance”, warning of hard times ahead.
“The breaking of value chains, the shortage of this or that material or technology, the end of an abundance of land and of resources, and that of water as well, it is all reappearing,” he said on Wednesday (August 24) at the first post-summer cabinet meeting.
“We are living at the end of what could appear to be [an age] of abundance, of endless cash flow, for which we must now face the consequences in terms of state finances, of an abundance of products and technology which appeared to be perpetually available.”
End of the bouclier tarifaire?
France currently has a price rise cap in place to stop household energy prices soaring. The government has spent tens of billions on this.
The measure is currently set to end on December 31. It is not yet known if it will be extended.
French newspaper Ouest-France reports that the price hike shield could be replaced by targeted financial aid aimed at lower-income households.
Nation-wide energy-saving plan
Mr Macron in a speech on July 14 spoke of establishing a nation-wide “energy-saving plan” (un plan de sobriété énergétique).
The government is set to unveil this plan at the beginning of September with the goal of reducing energy consumption by 10% compared to 2019 levels.
To tackle the energy crisis, six working groups have been established that will work with key actors in their assigned sectors to introduce energy-saving measures.