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Faced with rising electricity prices, the government is working on new aid for businesses

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Faced with rising electricity prices, the government is working on new aid for businesses
Written by madishthestylebar

Eight months to the day after the outbreak of war in Ukraine, the government is working on new aid to businesses which could lead it, in the absence of European support, to cover part of their utility bills. electricity, the Ministries of Economy and Energy Transition said on Friday. The State has provided an envelope of seven billion euros to finance this new aid, resulting from the “annuities” of energy companies linked to the explosion in energy prices, according to the government.

Companies can already apply for aid if their energy bills (gas and electricity) represent more than 3% of their 2021 turnover, but Bercy is awaiting the green light from the European Commission to simplify the criteria, deemed too complex. .

Partial coverage of electricity bills

Faced with “uncertainties about the outcome of the European process”, the Ministry for Energy Transition considers it “important to work in parallel on a package of national aid to provide security and liquidity to all French companies and communities that do not currently benefit from the tariff shield”. Professional federations and employers’ organizations were received Friday morning at the Ministry of the Economy to discuss this national aid.

The “privileged work track”, according to Bercy, would consist of the government taking on part of the companies’ electricity bills.

Concretely, the State could finance up to 50% of the part of the bill subject to market prices – the rest of the bill benefiting from the advantageous tariff called “Arenh”.

Arenh is a mechanism by which EDF resells part of the electricity produced by its nuclear reactors to its competitors, at a price well below market prices.

Discounts between 20 and 70 euros per megawatt hour

Companies that have signed contracts with their supplier that provide for a price per megawatt hour (MWh) above 325 euros will be eligible for this aid, according to the main working hypothesis put forward by the office of the Minister for Energy Transition Agnès Pannier-Runacher.

“It allows discounts between 20 and 70 euros per megawatt hour, depending on the consumer supply structure”, we detail from the same source. In addition to this floor price, a ceiling will be set but its precise amount remains to be defined.

The government wants to target SMEs

With this new support system, the government is targeting SMEs in particular, but also intends to negotiate with the European Commission to try to benefit medium-sized companies, the Ministry of the Economy said.

“We asked to be reassured about the evolution of energy prices. The device imagined meets our request for visibility”, welcomed AFP François Asselin, the president of the CPME (Confederation of small and medium-sized enterprises), which took part in the meeting organized in the morning in Bercy. If approved in earnest, the mechanism should result in an amendment to the draft budget law for 2023, which is currently before Parliament.

Suffocated by energy prices, SMEs urge the government to act

(With AFP)