The French government will uphold caps on electricity price hikes until at least 2023 to protect citizens from high costs, finance minister Bruno Le Maire said via Reuters on Friday.
Le Maire argued that power prices haven’t “normalised” yet, adding that after 2023 the caps will likely be phased out over a two-year period. “Electricity prices haven’t returned to normal, so we will take a little more time to withdraw the price cap. I give us another two years until early 2025,” Le Maire told broadcaster LCI in an interview.
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She added that the government will likely end similar household caps for natural gas at the end of 2023, citing significantly lower gas prices in recent months as countries settle on alternatives to Russian gas.
European electricity prices soared last year, driven largely by Russia’s invasion of Ukraine and subsequent EU sanctions on Russian oil supplies. In France, record-low nuclear output due to state-owned utility company EDF’s failing reactors contributed further to price hikes.
A company spokesperson said in November that just 30 of the 56 reactors were operational due to stress corrosion, severely impacting electricity output. The repairs also contributed to EDF’s record net loss posting in February, with the company ending the financial year with a net debt of $68.6bn.
Maintaining price caps will further strain EDF’s finances as the utility struggles to hire and train enough staff to build several planned nuclear plants over the coming decades.
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By GlobalDataThe French government has also made it a priority to shield citizens from soaring bills amid high inflation rates across the eurozone. In addition to a 15% price hike limitation on energy tariffs, the government has also pressured retailers to guarantee affordable food prices as the global cost of living crisis continues.
