France: The end of the tariff shield leads to a 14% decrease in electricity bills

Despite the end of the tariff shield on February 1, French households will benefit from a 14% reduction in their electricity bills. This measure is tied to the absence of adoption of the 2025 budget, which nevertheless has side effects.

Share:

With the scheduled end of the electricity tariff shield on February 1, households subject to the regulated sales tariff (TRV) will see their bills decrease by 14%. This significant reduction is made possible by the decision to abandon the tax increase on electricity initially planned in the 2025 budget proposal.

According to a recently published decree, the tax on electricity (excise) will return to its pre-crisis level, adjusted for inflation, at €33.70 per megawatt-hour for households, compared to the current €22. If the tax increase proposed by the government had been adopted, it would have limited the bill reduction to 9%. This measure sparked heated debates in Parliament, with opposition from various political parties such as the National Rally (RN) and France Insoumise (LFI).

Economic consequences for households and businesses

For small and medium-sized enterprises (SMEs) also subscribed to the TRV, the excise will rise to €26.23 per megawatt-hour. This measure will mitigate financial impact and allow them, like households, to benefit from the drop in electricity prices on international markets. This decline primarily stems from the stabilization of energy prices after the sharp tensions recorded in 2022 and 2023.

However, some negative effects are anticipated. The absence of a 2025 budget could lead to higher taxes for millions of households due to the freezing of the inflation-indexed tax scale. Additionally, several social and sectoral measures remain suspended. Aid for farmers, the textile sector, and ultramarine regions is uncertain, as are the announced reductions in VAT for Martinique and Guadeloupe.

A temporary special law in effect

While waiting for a possible budget vote, a “special law” will apply starting in January. It allows the government to manage public finances based on the 2024 budget. This situation imposes significant limitations, such as postponing certain budgetary commitments, but offers temporary advantages such as maintaining the disindexation of pensions or avoiding the dereimbursement of certain medications.

For employees, another major drawback could arise in January: the end of the use of meal vouchers for grocery shopping. This measure could directly impact the purchasing power of many households.

Ultimately, the coming months will be decisive in assessing the overall impact of these adjustments on the economy of households and businesses. François Bayrou, president of the MoDem, wishes for the budget to be adopted by February, but a new censure could prolong the uncertainty.

Brazil, Mexico, Argentina, Colombia, Chile, and Peru significantly increase renewable electricity production, reaching nearly 70% of the regional electricity mix, according to a recent Wood Mackenzie study on Latin America's energy sector.
The Canadian government announces an investment of more than $40mn to fund 13 energy projects led by Indigenous communities across the country, aiming to improve energy efficiency and increase local renewable energy use.
The German Ministry of Economy plans to significantly expand aid aimed at reducing industrial electricity costs, increasing eligible companies from 350 to 2,200, at an estimated cost of €4bn ($4.7bn).
A major electricity blackout paralyzed large parts of the Czech Republic, interrupting transport and essential networks, raising immediate economic concerns, and highlighting the vulnerability of energy infrastructures to unforeseen technical incidents.
French greenhouse gas emissions are expected to rise by 0.2% in the first quarter of 2025, indicating a global slowdown in reductions forecast for the full year, according to Citepa, an independent organisation responsible for national monitoring.
The Republican budget bill passed by the U.S. Senate accelerates the phase-out of tax credits for renewable energies, favoring fossil fuels and raising economic concerns among solar and wind industry professionals.
Rapid growth in solar and wind capacities will lead to a significant rise in electricity curtailment in Brazil, as existing transmission infrastructure remains inadequate to handle this massive influx of energy, according to a recent study by consulting firm Wood Mackenzie.
In April 2025, fossil fuels represented 49.5% of South Korea's electricity mix, dropping below the symbolic threshold of 50% for the first time, primarily due to a historic decline in coal-generated electricity production.
The US Senate Finance Committee modifies the '45Z' tax credit to standardize the tax treatment of renewable fuels, thereby encouraging advanced biofuel production starting October 2025.
According to the 2025 report on global energy access, despite notable progress in renewable energy, insufficient targeted financing continues to hinder electricity and clean cooking access, particularly in sub-Saharan Africa.
While advanced economies maintain global energy leadership, China and the United States have significantly progressed in the security and sustainability of their energy systems, according to the World Economic Forum's annual report.
On the sidelines of the US–Africa summit in Luanda, Algiers and Luanda consolidate their energy collaboration to better exploit their oil, gas, and mining potential, targeting a common strategy in regional and international markets.
The UK's Climate Change Committee is urging the government to quickly reduce electricity costs to facilitate the adoption of heat pumps and electric vehicles, judged too slow to achieve the set climate targets.
The European Commission will extend until the end of 2030 an expanded state-aid framework, allowing capitals to fund low-carbon technologies and nuclear power to preserve competitiveness against China and the United States.
Japan's grid operator forecasts an energy shortfall of up to 89 GW by 2050 due to rising demand from semiconductor manufacturing, electric vehicles, and artificial intelligence technologies.
Energy-intensive European industries will be eligible for temporary state aid to mitigate high electricity prices, according to a new regulatory framework proposed by the European Commission under the "Clean Industrial Deal."
Mauritius seeks international investors to swiftly build a floating power plant of around 100 MW, aiming to secure the national energy supply by January 2026 and address current production shortfalls.
Madrid announces immediate energy storage measures while Lisbon secures its electrical grid, responding to the historic outage that affected the entire Iberian Peninsula in late April.
Indonesia has unveiled its new national energy plan, projecting an increase of 69.5 GW in electricity capacity over ten years, largely funded by independent producers, to address rapidly rising domestic demand.
French Minister Agnès Pannier-Runacher condemns the parliamentary moratorium on new renewable energy installations, warning of the potential loss of 150,000 industrial jobs and increased energy dependence on foreign countries.