(RepublicanInformer.com)- France could be in trouble, as it’s looking to figure out how to deal with a possible shortage of energy because Russia has shut off its supply to them.
On Monday, Elisabeth Borne, the country’s prime minister, urged many companies in France to draft a savings plan for energy by sometime in September. In doing so, she further warned that the companies would be the first to be hit if France ultimately is backed into a corner and has to ration its supply of electricity and gas.
At the annual post-summer conference of the Medef employer’s federation, Borne said that Russia’s gas cutoffs could happen literally at any time in the near future. They are trying to avoid power shutdowns at all cost, but they aren’t sure if they’ll be able to do it long-term.
While appearing at the conference at the Longchamp horse racing track in Paris, Borne said:
“If it comes to rationing, companies will be the first to be hit, and we all need to prepare for it. All companies need to mobilize and take action. I call on each one to draft their own energy savings plan in September.”
She backed that statement up by saying that all ministries of the French government would finalize their plans in September to cut their energy usage by a total of 10%.
Wholesale prices for electricity throughout France have surged over the last week, and have actually soared to a record-high amount. On Monday, the price for the year-ahead baseload power reached 1,200 Euros per megawatt hour — which is a new record.
Throughout the summer, the French government has been urging companies to reduce their energy consumption by dimming their lights, closing all external doors if they are running their HVAC systems and also turning off all illuminated advertising boards after hours.
The head of Medef, Geoffroy Roux de Bezieux, said recently that the challenge would be much greater for industries that are considered energy intensive. He commented recently:
“Companies will play their part to meet energy savings targets in offices, workshops, warehouses and during employees work trips.”
The French government hasn’t yet ruled out the possibility of instituting a windfall tax on a temporary basis for any companies that make bumper profits during this energy crisis. But, the head of Medef pushed back against that notion, saying:
“It’s the state that’s seeing windfall profits rather than the companies.”
The French government has said that while they have received higher income from taxes, they’ve also experienced a surge in prices for energy as well.
Thus far, everyday consumers in France haven’t faced enormous increases in gas and power prices. That’s because, despite Russia invading Ukraine back in February, the French government has imposed caps on these prices. This may be over in the near term, though, as the caps expire at the end of 2022.
As Borne commented:
“These measures have an unprecedented cost for the public finances. This necessary, indispensable investment will weigh for a long time on the public accounts and make each financial decision more difficult.”
