News JVTech Electricity is expensive and will keep rising, here’s why
Published on 01/29/2023 at 10:30
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Electricity prices are the talk of the town, and rightly so. Even though they could be much more expensive than they are, they should raise the bill even more in the future.
The cost of electricity: a huge frustration
Your electricity bill is skyrocketing? You are not alone and the price of energy in France is hurting your ass. You may have been given a few explanations, but Le Monde has investigated and provides us with a very complete answer to this problem which affects all French people.
For many years, the value of electricity has remained more or less stable, but it was in 2022 that it reached record figures: a cost multiplied by 15, with a final price that increases by 120%. So that the country does not collapse on itself the state took care of a large part of this increase, causing the French bill to rise by only +4% in 2022 and +15% for 2023.
The conclusion of why the price of electricity has skyrocketed could not be more frustrating, let me explain. It’s all about how the energy market works. It is a Europe-wide organization, where countries choose their suppliers based on the amount of electricity they need and the type of resource they wish to use. In the case of France, only 6% of electricity is produced via gas. And yet, it is the drastic increase in gas prices that determines the value of the global electricity production market.
But why ?
The electricity market, the source of the problem
To supply electricity, a country balances the amount it needs, the type of resource it wants to use, and the taxes associated with it. It therefore seems more interesting to be supplied only with renewable energies, but not being available in sufficient quantity, nuclear power, coal and gas remain necessary.
The price of gas has risen sharply due to the situation in Ukraine, and even though renewable sources are cheaper, it is always the most expensive material that sets the price of electricity. Why ? Because electricity production must be done in line with consumer needs: neither too much nor too little, and just at the right time, at the risk of major losses due to the impossibility of storing electricity in large quantities and for long periods. Thereby, to secure the market, the price is based on the most expensive resource. And since the price of gas goes up, the price of electricity goes up, no matter if France only uses 6%. Frustrating, right?
Why will electricity be expensive for quite some time to come?
Ok, we know why it’s expensive, but how long will it last ? Europe has understood that it is the rules of the electricity market that are the problem, and that they will be reformed in 2023. But the tariffs should remain high, and for two reasons: electricity purchased in advance to water the French in 2024 or even 2025The absence of Russian gaswhich takes time to compensate.
