Will the price of electricity fall in 2025? If the trend is downward, this phenomenon will not apply to everyone…
In 2024, electricity prices in France have experienced several notable adjustmentsinfluenced by various economic and regulatory factors. But then, will the 2025 trend be downward?
Electricity prices increased in 2024
As of February 1, 2024, the regulated electricity sales tariffs (TRV) have increased on average 9.5% including tax. With an increase of 8.6% for the base rate and 9.8% for the rate “off-peak/peak hours”.
And, contrary to predictions, no additional increase TRV has not been applied. Several elements contributed to these adjustments.
This is the case of the contribution to the Public Electricity Service (CSPE). This tax, reduced to €1/MWh during the energy crisis, was reassessed to €21/MWh in February 2024, thus increasing the fiscal part electricity bills.
On November 1, 2024, the TURPE was revised upwards by almost 5%. This resulted in an increase of around 1% in prices for end consumers.
According to the Ministry of the Economy, the increase in February 2024 has led to an increase average of 8% of the tax-inclusive price of electricity for households. Which brought the price to €272/MWh in the first half of 2024.
The government has put in place measures to mitigate the impact of these increases on households. In particular by limiting the increase in TRVs and gradually adjusting electricity-related taxes.
A green year 2025?
It's official: a decree published in the Official Journal on Saturday confirms a drop of 14% of the price of the kilowatt hour (kWh) on February 1. But then, why this decline?
This significant reduction will bring the kWh price to a level close to that from the beginning of 2023. Or around 21.5 cents including tax, compared to 25.16 cents currently for EDF's regulated tariff in the “basic” option.
This decline occurs despite a increase in excise (formerly TICFE). It will increase from 22.5 to 33.70 euros per megawatt hour (MWh), an increase of 1.2 cents per kWh.
This tax increase is largely offset by the decrease in prix wholesale electricity. Initially, the Barnier government had considered raising the excise to 50 euros/MWh to generate 3.4 billion euros in savings.
And this, while reducing bills by 9%. However, this measure made the object of a abandon after causing controversy, but it remains to be seen whether the new government will address this delicate issue.
Who will benefit from this drop in electricity?
Not all consumers will benefit from this drop in electricity in the same way. Approximately 60% of subscribersi.e. those on EDF's “blue rate”, will automatically see a 14% reduction.
However, for specific options such as “peak/off-peak”, “Tempo” or “EJP”, the reduction will vary between 8% and 18% Depending on the starting price and the fixed impact of the excise.
For example, a “peak/off-peak” subscriber will benefit from a reduction of 12.6% during off-peak hours. And 14.6% during peak hours.
Those who have a contract indexed to the regulated rate will also benefit from this reduction. On the other hand, holders of a fixed price offer will have to assess whether their contract remains advantageous after February 1.
If not, they can cancel at any time to return at the regulated rate. The decree sets the regulated prices until December 31, 2025.
However, new competitive offers are therefore reappearing on the market, after being limited by the surge in energy costs. Certain proposals, such as those from Octopus or Engie, guarantee lower prices to the current TRV for a period of two to three years.
However, it is crucial to carefully examine the conditions of the contracts, because a guaranteed price only applies per kWh. The subscription, on the other hand, may increase, in particular due to legal components such as the cost of delivery electricity.
Hi, I'm Ruben, the new web editor at Tuxboard.com. Freshly graduated from a journalism school in Paris, I am passionate about media news, television shows and sociology. I am enthusiastic about sharing with you my articles and my analysis of the news on Tuxboard.
