€1000 per MWh. This is the incredible record reached three days ago on the wholesale electricity market in France. A year ago, this MWh was trading at €85, which represents a spectacular increase of 1000%. After months of dizzying increases in the price of a barrel of oil, Europe and its partners are thus faced with an even more serious energy crisis which is causing panic among governments. In the United Kingdom, where regulated electricity prices have already increased by 80% for households in the country, strikes and demonstrations are increasing in the country. In France, Prime Minister Elizabeth Borne is preparing emergency measures to limit damage as much as possible. A new device replacing the current tariff shield, financed to the tune of 20 billion euros, must arrive by the end of the year to regulate the prices of gas and electricity.
“We owe this unprecedented rise in the price of electricity to the particularity of our current European system”explains Nicolas Meilhan, Senior Advisor at EV-Volumes.com and energy expert. “the wholesale price of electricity is defined not by the average cost of our production plants, but by that of the last plant in the network. However, this last plant in the network is a gas-fired plant. And since the price of gas has recently been multiplied by 20 (to €320 per MWh), things are exploding”.
So, what immediate consequences for the French? “Fortunately in France, the regulated costs of electricity, the EDF blue tariff currently set at less than 15 euro cents per kWh at off-peak hours, protects the consumer even if it could soon be reassessed upwards in contained proportions. . Those who had chosen to go through unregulated private suppliers, on the other hand, are already receiving bills at 40 cents per kWh. I also advise everyone to quickly return to regulated electricity to avoid this kind of surprise.”explains Nicolas Meilhan.
What impact on the electric car?
In recent years, the low cost of using the electric car has naturally been one of the biggest advantages of this technology. Despite a purchase price generally higher than that of a similar thermal vehicle, the low price of a full electric battery allows you to navigate after a few years of use. A few months ago at the height of the Ukrainian crisis, when a barrel of oil flirted with 130 dollars and a liter of gasoline cost more than 2€, driving an electric car even looked like the ideal solution. And now ? “Without protective measures, the electricity bill to recharge the batteries of his car would be multiplied by 4 or 5. It is therefore impossible to keep this technology attractive in the eyes of the customer. All the more so assuming that this increase in the price of electricity will also influence its cost of construction. In short, everything will depend on the intensity of the protective measures governing the price of our electricity in France. But sooner or later we will pay the real price in taxes”.
The prospect of filling up at home, the cost of which would be multiplied by 4, would undoubtedly have something to put off the average customer. And let’s not even talk about the price increase in fast charging on networks like Ionity’s: “I imagine that these networks will be subsidized to avoid finding prices that are too dissuasive”thinks Nicolas Meilhan.
And how long will this unprecedented crisis last? “The current crisis is worse than those of the oil shocks because they concern oil as well as electricity and gas. But we have no alternative to this last energy currently in Europe. Gas allows our entire industry to function. Without Russian gas, we have no other solution. This is why I think we have no other choice but to come back to negotiate with Russia in order to unblock the situation. It is about safeguarding our industries and our entire economy. Anyway, with such energy prices, we will mechanically end up destroying demand. »
So, you thought we would never see worse than a full tank of unleaded at €2 a litre?