Emmanuelle Wargon, former Minister of Housing in the Castex government, is president of the Energy Regulatory Commission (Cre), the energy policeman in France. It is the Cre which instructs entire sections of the energy market in France, which develops proposals for regulated electricity and gas tariffs, which examines the investment needs of distribution networks and sets their tariffs. 'use. Emmanuelle Wargon returns, for West Franceon the main issues of the moment.
The Energy Regulatory Commission, which you chair, recommends the renewal of the Regulated Electricity Sales Tariff (TRVE), to which 59% of individuals subscribe. Why should this rate be renewed? The Competition Authority, for its part, is calling for it to be removed, because it would be neither the most reliable nor the lowest…
We see TRVE as having many positive points. The first of these is that it smoothes the electricity bill over time, avoiding market fluctuations, since the “electrons” part is calculated over two years. This would not exist without TRVEs. The same goes for the peak-off-peak hours formula, which both allows a gain in purchasing power for the consumer and brings flexibility to the electricity system.
Finally, the TRVE is a benchmark. It brings confidence in the electricity market, which will be particularly useful with the end, in 2026, of the Arenh (Editor's note: Regulated access to historic nuclear power, according to which EDF must sell a third of its nuclear production at low prices to its competitors). We do not in fact have quite the same opinion as the Competition Authority.
TRVEs are meant to be provisional. But are they not threatened, since the European Union has already liberalized the electricity market in 2007?
Legally, the government must make a report to the European Commission on the basis of the opinions of the Energy Regulatory Commission and the Competition Authority, so that the European Commission can decide for a further period of five years. France is not the only country to have regulated prices, there are some in Belgium and Italy in particular. We don't have much concern on the subject. However, arguments must be provided to defend the TRVE before the European Commission.
Cre is in favor of the TRVE but, however, the residential blue tariff is currently at 210 per megawatt hour while it was at 120 in 2019. Even if it is due to fall soon, the increase remains strong…
The price of electricity increased in 2022 and 2023 with the war in Ukraine and the drop in EDF production due to corrosion problems at power plants. The TRVE, through its smoothing mechanism, increases or decreases less quickly than the market price. The calculation that we will make for the evolution of the TRVE in February will result in a reduction in the “electricity” share, but its extent on the final bill will also depend on the evolution of taxes which will be decided, knowing that the government has committed to ensuring that this reduction is at least 9%. It is correct that wholesale market prices for purchases in the coming years will remain higher than before the crisis. This is therefore also the case for the TRVE as for the offers from alternative distributors. It is true that the market offers are currently cheaper than the TRVE, since they already incorporate the drop in prices. TRVE will realign in February.
Our mission is to achieve the most adjusted price possible, to limit the increase for the consumer.
At the end of 2025, it will be the end of Arenh, at €42 per megawatt hour, on which the TRVE is partly calculated. Does this mean that TRVE will subsequently be more volatile than up until now?
The end of the Arenh is an upheaval and this is one of the reasons which argue in favor of maintaining the TRVE, which is an element of stability. It is correct that the Arenh is one of the data in the calculation of the TRVE, with others taking into account the wholesale market. As we have determined from 2023, from 1is January 2026, the entire share of the TRVE linked to the cost of electricity will be based on market prices. Due to the two-year smoothing system, this should not result in too strong a change. But we do not yet have the wholesale market prices for 2025. It is therefore too early to assess the development which will take place in February 2026.
You have launched the consultation for the reassessment of the “tariff for use of the public electricity network”, the Turpe, which will come into force next August. It is he who must finance the 200 billion necessary for the electricity networks over the next fifteen years. Should we expect a strong impact on the consumer's bill?
We examine the requests from network managers, Enedis and RTE, whether to finance their investment projects, study their operating expenses or their remuneration. Our mission is to achieve the most adjusted price possible, to limit the increase for the consumer.
This tariff will increase in 2025, because it is necessary to finance the connection of renewable energies, strengthen the network and adapt it to climate change. We saw that it was necessary with the storms we experienced. This increase will come in the opposite direction, therefore, to the fall in TRVE. The amount has not been finalized, because we have not finished our work. But the order of magnitude is an increase in Turpe of around 10%, which will result in an increase in the final bill for the consumer which could be 2 to 3%. Conversely, as I indicated to you, the share of electricity itself will fall in February 2025, for TRVE consumers, and has already fallen for several months for customers with market offers.
The government recently published the map of the areas where offshore wind turbines will be installed. It will require the next fields to be moved further away from the coast, which will require the use of floating wind turbines, which are more expensive. Does this worry you?
Electricity from installed offshore wind turbines is the most competitive of renewable energies. Floating wind turbines are at the beginning of their development, so we can imagine that their cost will fall. Then there is the cost of the connection, which actually increases the further away you go. But it is also necessary to find a compromise with all stakeholders.
From the moment we seriously want to reduce CO2 emissions, due to the climate disasters we have before our eyes, we must proceed with the electrification of uses, including more electric cars, more heat pumps. This requires more electricity, therefore more renewables and more nuclear power. Offshore wind power is a powerful way to develop this production. There needs to be a balance between installed wind power and floating wind power. Compromises are necessary and cost cannot be the only criterion of choice.
We need a clear vision of our energy evolution.
Electricity is not the only energy vector for successful decarbonization, but it is the main one. But it keeps getting more expensive. France's electricity consumption also fell in 2023, which was not expected. Are we not at risk of discouraging consumers?
You need to be as vigilant as possible about the price of electricity. This is why on network financing, we work with the managers to find the most adjusted price possible. On the market side, it is the development of the means of production which will make it possible to have more abundant electricity, and therefore less expensive. Working during off-peak hours, if they are well placed during the day, will allow everyone who can to have access to cheaper electricity. Finally, we must not have too strong an increase in taxation.
Specifically, the government does not rule out increasing the excise on electricity beyond what it was before the energy shield. Is it too much?
Cre considers that raising it to the level at which it was before the implementation of the shield would allow the consumer to benefit from a real reduction in 2025 for consumers who are on the TRVE, while absorbing the increase in the Turpe. And for those who are not on the TRVE, who have already benefited from the reduction, the increase would be moderate. To go further is to risk not sending a good signal to the consumer. However, tax choices do not belong to the Cre, but to the government and Parliament.
The new government seems, like the previous one, to want to base its energy programming on a decree only, lacking a majority to pass a law. Isn't this too legally fragile, particularly for nuclear power?
On nuclear power, a specific law has already been adopted. What seems especially important to me is to have a PPE. Without PPE, we would enter a period where, due to lack of quantified objectives, we would no longer be able to issue calls for tenders to continue the development of renewable energies. We would be in a form of legal limbo. And, moreover, we need a clear vision of our energy development. Proceeding only by decree will not prevent a parliamentary debate on this policy if desired.
In your opinion, does the average consumer support the energy transition and what it implies financially?
I am very sensitive to the fact that we must, with the help of a stable policy, support consumers, support demand, support changes in behavior. When I was Minister of Housing, I launched MaPrimeRénov', which was then modified a lot, sometimes in contradictory ways. Change must be easy technologically, technically and financially. This is true for electric cars, for the electrification and renovation of buildings, as well as renewable gases. We need clarity for the consumer, who must have confidence in the new system.
Stability in aid for the energy transition is called into question in the finance bill…
For what concerns Cre, we make assumptions for the sizing of electricity networks which are based on government energy programming. Both consumption and production of electricity must then follow.
You recently obtained that electricity suppliers commit to certain rules of conduct. Is there still progress to be made?
We launched a consumer protection project a year ago, hoping that these provisions would be included in a bill which ultimately could not be presented to Parliament by the former government. We are convinced that for the consumer to find their way, they must understand their bill, any regularizations, and be able to change supplier easily. We also want to improve the way in which suppliers hedge themselves on the markets and therefore avoid sudden price changes to consumers in market offers. All this is useful for developing the uses of electricity.
If no major energy bill could pass the Assembly, do you think these provisions alone could find a majority?
This is indeed what it seems to us.
