Energy crisis: the government puts 10 billion euros on the table to help businesses

Posted Oct 27, 2022, 6:45 PMUpdated on Oct 27, 2022 at 7:15 PM

No very broad tariff shield for companies, but aid adapted to the different categories of companies. Here is the recipe detailed this Thursday by Prime Minister Elisabeth Borne to strengthen support for businesses and avoid the darkest scenarios of deindustrialization.

“Faced with the risks of a new spike in energy prices at the start of 2023. It is essential to give players visibility. We want to tackle the problem at the root first, working at European level […] but our businesses and our communities could not wait…”, explained the Prime Minister.

A counter for large companies and ETIs

For businesses, state aid will be available in two ways. One – endowed with 7 billion euros – will ensure an immediate reduction in the electricity bills of SMEs and VSEs (those that do not already benefit from regulated electricity sales tariffs). “These are the most fragile”, justified the Minister of Economy Bruno Le Maire. The other device – endowed with 3 billion euros – will be paid in the form of aid to large companies and ETIs in difficulty – because of energy prices – which will request it from state services.

For SMEs, this mechanism should generate savings of 10 to 25% on their electricity bills in 2023, thanks to State support for an amount of up to 50% of the share of electricity bills. subject to market prices (i.e. between 40 and 60% of the overall score, the rest already benefiting from a discount linked to the nuclear regulation mechanism, the Arenh).

This “electricity buffer” will be accessible to SMEs that have signed contracts with their suppliers that provide for a price per megawatt hour (MWh) of more than 325 euros and within the limit of 800 euros. It will be in place for one year from 2023. This after being introduced by amendment in the finance bill for 2023.

No increase in deficits

For large companies and ETIs, the government assured that it had won its case with the European Commission to “drastically” simplify the conditions for accessing the aid window already available but deemed far too complex. Open for several months, this one has hardly been subscribed…

From November 15, companies that will present an electricity bill up by 50% will be able to claim it, whereas until now these funds were reserved for those who had seen their bills doubled. France has also obtained the doubling of the aid ceiling which will be able to go “for extremely energy-intensive companies up to 150 million euros”, indicated Bruno Le Maire.

Finally, the government says it is ready to pay installments to companies that request them. All these measures are “funded and do not increase deficits”, the minister insisted.

“Distortion of competition”

For large companies and ETIs, the glass is half empty. “It’s better than nothing, but that doesn’t change my fears of a loss of competitiveness for French industry. How to explain that a company of 250 employees benefits from aid on its invoice and not that of 260 employees which does not fall into the SME box? It’s an incomprehensible distortion of competition, ”said Frank Roubanovitch, president of Cleee, the association of large electricity consumers. He also believes that “the amount of aid is not up to what other European countries like Germany or the United Kingdom are doing”.

“We would prefer ex-ante aid rather than ex-post aid. We can’t wait to be in the red…”, indicates Franck Charton, the general manager of Perifem, the professional association of mass distribution. However, it is impossible to extend the system designed for SMEs to ETIs, even to large companies, without infringing the rules of competition in Brussels, we retort at Bercy.

As for increasing the volumes of nuclear electricity sold at low prices? Impossible to do it this year, explains the government, which had activated this measure last year. They will remain at 100 TWh to preserve EDF’s finances, which are already largely in the red.

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