The 3 components of the cost of electricity

Energy

Variable part directly linked to electricity consumption, with a price per kWh modulated according to the subscribed power and consumption ranges. This is the unregulated part of the contract, which can be entrusted to historic players or to new electric companies like E-PANGO.

Transport and distribution

Regulated part of the contract which corresponds to the use of public electricity networks. It is made up of a fixed part and a variable part.

Taxes

They are applied both at national and local level (municipality and department) and concern both the fixed part and the variable part of the subscription.

Upward trend

  • Energy: Even if the price per kWh is historically low, the upward trend is due to the combined effect of a lower availability of basic electricity and a decrease in the additional production capacity used during peak periods (gas, oil and coal).
  • Transport and routing: The increase in the share of intermittent energies in our energy mix means increasing the capacity of the networks so that they can accept peak production. The investment required underpins an increase in subscription prices.
  • Taxes: Collected by the State from electricity suppliers, the TICFE is likely to increase in the coming years to finance the effort linked to the energy transition. As for local taxes, their level is governed by the communities and can therefore vary depending on the policy pursued by each of them.

Variability in the cost of kWh

Since electricity cannot be stored, its financial value changes sharply depending on supply and demand: at its maximum during consumption peaks, it can drop to very low or even negative levels when demand is weak. This explains the establishment of horo-seasonal prices in electricity supply contracts.

Balance supply and demand to drive costs down

The liberalization of electricity prices in Europe aims to encourage lower prices, by establishing competition in the production and supply of electricity. The wholesale markets play a major role here since they consolidate supply and demand to establish fair and transparent prices, while ensuring the successful completion of transactions.

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