A market open to competition
Since the French electricity and natural gas markets were fully opened up to competition on 1 July 2007, consumers have been free to choose their energy supplier.
As a result of deregulation, suppliers other than the incumbent operator, who are known as “alternative” suppliers, entered the retail electricity market, and consumers are now able to choose between two types of offers:
- market products (fixed-price products or variable-price products), with prices set freely by the suppliers;
- regulated tariffs, set by the government and the regulator and proposed by the incumbent operators (EDF and the 162 local distribution companies)
Consumers whose subscribed capacity is less than or equal to 36 kVa may cancel their contracts and switch to a new product or supplier at any time, at no additional cost and with no interruption in their supply.
Since 1 January 2019, households whose annual taxable income per head is less than €10,700 may be eligible for an energy voucher, which can be used to pay an energy bill, care home charge or to cover the costs of home energy renovation. The energy voucher is the replacement for the previous “social rates” applied to electricity and gas bills. For more information, visit the government website about it.
The market as of 31 December 2024
As of 31 December 2024, 45% of residential and non-residential sites choose a contract at market price (31% with alternative suppliers). 55% of the sites are supplied under regualted tariffs.
As of 31 December 2024, 75% of the total consumption is supplied under market based price, of which 43% with alternative suppliers.
Retail electricity price components
The retail price (net of tax) of an electricity product, whether at the regulated tariff or the market price, includes:
- Fixed costs which are identical for all suppliers, such as network access (the price of which is set by CRE);
- Variable costs which vary between suppliers: electricity generation or supply cost, commercial costs, margin or return taken by the supplier. By optimising these costs, suppliers are able to offer lower prices.
The retail electricity price also includes two contributions and two taxes, which apply in the same way to the bills paid by consumers at the regulated tariff or at market rates:
- The transmission tariff contribution (“contribution tarifaire d’acheminement” or CTA). This levy finances specific pension entitlements of employees working in regulated sectors covered by the IEG (electricity and gas industries) regime.
- Excise duty on electricity (« tarif d'accise sur l'électricité ») : the excise duty on electricity (formerly known as the « Taxe intérieure sur la consommation finale d'électricité » (TICFE)), is collected on behalf of the French customs authorities and incorporated as a revenue into the State budget. Between the 1st of February 2022 and the 31st of january 2024, the TICFE was limited to €0.5/MWh for medium to large businesses and €1/MWh for households and small businesses, as part of the tariff shield (« bouclier tarifaire »).
From February 1st 2024 to Januray 31st 2025, the amount is set at €21/MWh for households and small businesses (subscribed capacity under 36kVA ) and 20,50€/MWh for other businesses.
Since 1st February 2025, the TICFE is set at €33,70/MWh for households, €26,23/MWh for business which subscribed capacity is under 250kVA and €22,50/MWh above 250kVA. - The "taxe départementale sur la consommation finale d'électricité" (TDCFE) and the "taxe communale sur la consommation finale d'électricité" (TCCFE) have been repealed on January 1, 2022 and January 1, 2023 respectively. These repeals were accompanied by an increase in the TICFE, which is incorporated into the applicable full-rate tariffs.
- VAT, at a rate of:
- 5.5% on the subscription and CTA, and 20% on the proportional component (including the CSPE and TCFE) for subscribed capacity less than or equal to 36 kVA;
- 20% on the entire bill, for subscribed capacity greater than 36 kVA.
National Energy Ombudsman
Energie-info.fr, the website of the National Energy Ombudsman, offers comprehensive information on the supply of electricity and natural gas. In particular, it gives access to:
- an independent price comparison tool, the only one set up by the public authorities accessible on the internet;
- practical sheets with a lot of information and advice in energy (billing, change of suppliers, taxes, etc.).
Fixed or variable market prices
Both the incumbent and alternative suppliers offer products at market prices.
Consumers may choose:
- Fixed-price offers. The price net of tax remains fixed during the contract period, but taxes and other levies may change. There are various types of fixed-price offers, depending on which billing items remain fixed during the contract period;
- Variable-price offers. The price changes in line with changes in regulated sale tariffs or other wholesale market indices specified in the contract.
“Green” electricity refers to electricity generated from renewable sources (hydro-electric, wind, solar, geothermal, etc.) or by CHP. Green offers allow consumers to obtain renewable electricity from a certified source.
Regulated tariffs
Regulated sale tariffs are governed by Articles L.337-4 to L.337-9 and R. 337-18 et seq. of the French Energy Code. They are available from the incumbent operators: EDF and the 162 local distribution companies.
Since 1 January 2016, in metropolitan France, only consumers who have subscribed capacity lower than or equal to 36 kVA are eligible for regulated tariffs. Article 2 of 11 april 2024 law n°2024-330 stands for the deletion of the power limite of 36 kVA
How regulated sale tariffs are calculated
Regulated tariffs are established by adding the price of regulated access to incumbent nuclear electricity (known by the acronym “ARENH”), the cost of the electricity supply complement which includes the capacity guarantee, transmission costs and marketing costs, as well as a normal rate of return on investment. This method aims to ensure that these tariffs can be “challenged” by alternative suppliers, i.e. they are able to offer consumers market products at prices equal to or lower than the regulated sale tariff.
Article 64 of Law No. 2019-1147, promulgated on 8 November 2019, on energy and cli-mate (LEC) puts an end to the regulated electricity tariffs of incumbent suppliers. From 1 January 2021, only the following sites subscribing to a power of less than or equal to 36 kilovoltampères can benefit from regulated electricity sales tariffs:
- Domestic final consumers, including land lords and syndicates of co-owners of a single residential building;
- Non-domestic final consumers who employ fewer than ten persons and whose annual turnover, revenue or balance sheet total does not exceed EUR 2 million.
Changes to regulated sale tariffs
Since 8 December 2015, CRE has sent the Ministers for Economy and Energy proposals for regulated electricity sale tariffs, along with reasoned arguments. The government then has three months in which to contest the proposals.
How the retail markets work: shared procedures
In practice, the retail markets in electricity and gas work according to rules established by working groups set up by CRE in 2005. These WGs include all of the stakeholders concerned: consumer representatives, suppliers, system operators and the government. Under the aegis of CRE, they have defined common operating procedures for professionals in the industry.
The operating rules (or procedures) between suppliers and system operators in respect of professional or residential clients are laid down in the “customer reference base”, which has been in force since the electricity and natural gas markets were opened up to competition. The reference base is the result of work by two consultation bodies: the Electricity Working Group (GTE) and the Gas Working Group (GTG).