France to offer cheap electricity to those who cut usage during peaks

Small businesses and individuals in France are to be offered the possibility of reducing or cutting their electricity at certain peak moments this winter in exchange for favourable electricity prices for the rest of the year.

France’s Ministry of Ecological Transition stated yesterday that it would encourage energy suppliers (EDF, Engie, etc.) to offer this sort of deal to customers this winter.

The government is calling these proposed deals ‘tariff reduction formulas’ (formules d’effacement tarifaire).

EDF used to offer a similar scheme to customers under the name ‘Tempo’.

The goal is to reduce the chances of electricity cuts by asking individuals or small and medium-sized enterprises (SMEs) to reduce their electricity consumption, particularly at cold moments when the highest number of people turn up or on their heating.

Read more:Why some French electricity firms are urging customers to go to EDF

France is expecting a strain on its electricity supply this winter with half of its nuclear power stations currently offline.

Twelve of the country’s reactors have been offline for several years due to corrosion issues, while 16 others are currently undergoing maintenance.

France gets 70% of its electricity from nuclear power.

Read more:France is at risk of energy shortages and rationing, says minister

People interested in the tariff reduction scheme will be able to sign up to it voluntarily.

It could mean having to drastically reduce or even cut electricity consumption on around 20 to 30 peak electricity days per year. For the rest of the year, customers will have “advantageous” electricity rates, the government stated.

Those who sign up for the scheme will be warned the day before an expected peak day.

If they end up using too much electricity on the peak day, then they will have to pay significantly more for electricity on other days.

France’s Energy Minister Agnès Pannier-Runacher stated:

"The government intends to strongly encourage behaviours that reduce [electricity] consumption at the most strained moments, thus helping to reduce the stress on our electricity system as well as the costs.”

She said the measures will be aimed at SMEs or “residential consumers” who have a wood burning stove as well as electric heating in their homes.

Many industrial companies in France that are large consumers of electricity have been operating under a similar type of system for many years: when there is a peak in electricity demand they agree to shut down their production for a few minutes or hours and in exchange receive remuneration.

Europe is also currently facing difficulties in the supply of oil and gas due to Russia’s invasion of Ukraine.

Russia supplies the EU with around 40% of its natural gas, although the EU now has plans to phase out its use of Russian gas and oil entirely by 2030.

France is less dependent on Russian gas than other EU countries, receiving 17% of its supply from Russia, compared to about 55% for Germany and 40% for Italy before the start of the conflict.

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