Electricity: why are prices going to increase?

In July 2021, the Energy Regulatory Commission (CRE) proposed to the government an increase in electricity tariffs, i.e. an increase of 0.48% including tax for blue residential tariffs. While the financial situation of a large number of households is critical because of the health crisis, there is reason to wonder about the relevance of the proposed increase in electricity prices. What are the reasons justifying the increase in electricity prices? How do I find a better deal on the market?

Increase in tariffs: use a comparator to choose the right electricity

For a new subscription to an energy offer, in particular in a context of increasing tariffs, it is always prudent to use an energy offer comparator. This choice will benefit you on several levels. This system makes it possible to obtain the best offer to take advantage of the advantage of electricity comparators and thus have the contract adapted to your needs.

The electricity market offers under the microscope

Indeed, the latter make a comparative study of the prices charged by the various suppliers present on the market and make them available to you. This gives you the opportunity to assess which supplier can help you save more on your energy costs.

Thanks to a comparator, you know:

  • The price of the subscription;
  • The amount of the kilowatt;
  • Time slots during which pricing is advantageous;
  • The type of electricity that will be supplied (green electricity, fossil electricity, nuclear electricity);
  • Additional services that will be provided.

By analyzing these different data on each supplier, this will allow you to make the most of the competition .

visual electricity increase - Electricity: why are prices going to increase?

A possibility to know your energy expenditure

Electricity comparators also allow you to perform simulations to have an estimate of your energy expenditure. They offer you to enter information relating to your accommodation in order to generate an approximate amount of what your energy expenditure will be.

In addition, using an electricity comparator gives you the privilege of benefiting from advice and guidance from experienced professionals. These inform you about the steps of the process, tips to further reduce your bills and help you build your subscription. They handle the termination and re-subscription for you. This will give you time to concentrate on other occupations.

The reasons justifying the increase in electricity prices

The cost of electricity is revised upwards and it became effective on August 1st. This decision can be justified for various reasons.

The cost of producing electricity

The electricity supplied to households is produced by companies which bear loads in order to continue to ensure production and to operate their plants. These various charges are scalable and are incorporated into the setting of the final price for the sale of electricity. This first burden-sharing is carried out at the level of the producers.

After them, we must also count the suppliers or distributors who must also take into account their different charges before setting the price of the kilowatt to their subscribers. The increase in tariffs may therefore result from the increase in charges borne by producers and suppliers of electricity. Among other charges, mention may be made, for example, of equipment maintenance.

The various equipments that allow the production and distribution of electricity are indeed very expensive. They need constant maintenance to avoid malfunctions that will hinder continued production. Maintenance costs are a significant investment that must be made by businesses and are subject to change.

Transport cost

This last element is not often quickly perceived by many, but it is extremely important. Without this, the supply of electricity could not be effective in households. The transport of energy represents a real cost for producers. It is often estimated at billions of euros and must be included in production costs. An increase for one reason or another in this charge may explain the surge in the price of energy transfer.

Extension works

To increase the quantity of energy produced, producers carry out periodic extension work on their networks. These are important because they will provide a sufficient amount of energy in households to protect them from a voltage drop or shutdown.

However, the realization of said works requires a colossal budget to be launched and completed . This operation is once again the responsibility of the producers.

image electricity increase - Electricity: why are prices going to increase?

The coronavirus health crisis

The restrictive measures leading to general containment have had repercussions on the maintenance operations of the equipment installed in the power plants. These were not able to adequately meet the energy needs that arose.

To provide a rapid response and to satisfy households, other means have been employed to provide an additional amount of electrical energy . This involves, among other things, operating gas or coal-fired power stations, for example. This automatically represents a burden to bear. These solutions are often offered by energy suppliers to producers. They distribute the amount in return on the invoices of their subscribers.

The production of renewable energy

As incredible as it may seem, the production of renewable energy is one of the causes of the rise in electricity prices. In fact, to promote renewable energies, the government has introduced taxes, in particular the CSPE (contribution to the public electricity service) which is integrated into the calculation of electricity bills. It also has an impact on the amount of household electricity bills.

In summary, the increase in electricity prices is linked to several factors. These are production costs, network maintenance costs, the health crisis, to name but a few. It is still possible to benefit from attractive prices despite this reality. To achieve this, one must avoid contacting energy suppliers directly. The best way to benefit from attractive offers is to use electricity comparators . These help you choose the best deal for you based on your needs.

Mary Brinsfield

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