Electricity prices set to fall in France « Euro Weekly News

Some good news for French households: electricity prices are set to drop in early 2025. This is despite the end of a government-backed price protection scheme, the bouclier tarifaire (price shield).

The price shield helped to protect residents from skyrocketing energy costs, but it will conclude on February 1, 2025, per a decree issued by the French government on December 28, 2024, as reported by Connexion France.

France’s bouclier tarifaire

The price shield, introduced in response to the energy crisis of 2021-2022, limited increases in electricity bills to 15 per cent, with the government subsidising 37 per cent of household electricity costs. Over its lifespan, the initiative cost the French state an estimated €26.4 billion, according to la Commission de régulation de l’énergie (CRE).

Despite the shield, energy costs still rose incrementally: 4 per cent in 2022, 14 per cent in 2023, and 8 per cent in 2024 (on average, as reported by Connexion France).

Electricity prices set to fall in France, February 2025

Electricity prices in France are set to fall by up to 14 per cent in February 2025 due to a combination of factors, including a significant reduction in market electricity prices, plus an increase in nuclear energy production.

As a result, the price per kilowatt hour (kWh) will drop to €0.215, down from the current €0.2516. For the average French household consuming 5,681 kWh annually, this equates to an annual electricity bill of €1,220, a notable decrease from the current €1,429, as reported by Connexion France.

Collective housing and EV users can still benefit from France’s electricity price shield

While the price shield ends for individual households, collective housing and electric vehicle (EV) users will reportedly continue to benefit from state financial aid throughout 2024. The Agency for Services and Payments (ASP) explains that buildings with collective heating systems not covered by regulated tariffs can claim compensation that matches the frozen electricity prices. In addition, developers of charging infrastructure will receive state aid, which must be passed on to consumers through adjusted service pricing.

The ASP manages the compensation payments. The aid for 2024 includes 75 per cent of the difference between the contract price and regulated tariffs, provided contracts were signed before June 30, 2023.

Expats and locals in France should monitor their electricity contracts and consider shifting to regulated tariffs (tarif bleu) if eligible, as these remain tied to state-negotiated pricing. The expected price decrease offers a welcome reprieve for those concerned about the rising cost of living. With nuclear production ramping up and market prices stabilising, French residents can look forward to lower electricity bills in the new year.