Companies say they have already entered into a logic of energy restrictions
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The Prime Minister’s injunction at the Meetings of French Entrepreneurs of the Medef, Monday, August 29, sounded like the echo of the speech of her distant predecessor Pierre Messmer, during the oil shock of 1973, when the price of crude had quadrupled: moderate your energy consumption. Elisabeth Borne invited companies to be part of a 10% reduction trajectory, a target that the Head of State, Emmanuel Macron, had set for 2024 in his July 14 television interview. This effort is the guarantee, according to the government, of a winter period without rationing or sudden cuts.
Geoffroy Roux de Bézieux, president of Medef, estimated that the 10% target, which is not “not impossible” to be achieved quickly, even if it is very ambitious, is “absolutely essential” to avoid rationing or load shedding. Companies, rarely completely covered by long-term supply contracts, are encouraged to do so by the exorbitant prices of various energies: gas reached 350 euros per megawatt hour (MWh) for 2023, pushed by the Russian threat of a total closure of its gas pipelines; electricity for 2023 also exceeded 1,000 euros per MWh at the end of the week, twenty times more than at the start of 2021; the barrel of Brent from the North Sea rose to 105 dollars.
Mme Borne especially underlined the threats weighing on the gas supply, even if the stocks for the winter are now replenished at 90%, approaching the objective of 100% at the beginning of November set by the government. This will not prevent manufacturers from having to make an effort to be sober. In July, the European Commission had set a general framework for the Twenty-Seven, each Member State having to reduce its gas consumption by 15% between August 2022 and March 2023. Nothing like this for electricity.
However, it is the price of electricity that is “the main concern” Medef – due to the price, the shutdown of 32 of EDF’s 56 nuclear reactors and reduced hydroelectric production due to drought. For business leaders, we must first get through the winter of 2023. Not all sectors are equally exposed. Electro-intensive factories (aluminum, chlorine, steel, paper-cardboard, cement, glass, etc.), which represent 70% of electricity demand in industry, are in an unprecedented situation, even though they may represent 15% to 50% of production costs. Large retailers, energy-intensive to maintain their cold chain, will turn off illuminated signs.
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