“The opening to competition of the energy market, electricity or gas, has experienced its crash test”

2023-06-12 10:00:17

En French, this is called a shock test. Better known by its Anglo-Saxon surname of crash test, this consists of throwing a car against a wall in order to assess the damage. The opening to competition of the energy market, electricity or gas, has had its full-scale crash-test.

By propelling the prices of gas, then of electricity, to historic heights, the crisis born of the conflict in Ukraine made it possible to verify what many had anticipated: competition has not been of much help. And the end of regulated gas prices at 1is July should further weigh down a very thin balance sheet, resulting in a further increase in prices.

The surge in bills over the past year has plunged more than a quarter of French people and a third of young people into fuel poverty, according to the energy mediator barometer. The latter recorded more than 30,500 disputes this year, a number that has doubled since 2017. The lack of information on price changes, modifications to current contracts, bad practices are commonplace and explain the reflux of consumers towards historical operators, EDF for electricity and GRDF (Engie) for gas.

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The telecom precedent

However, when the liberalization of the market started in 1999, the hope was to restore freedom and purchasing power to Europeans thanks to the development of competition. This was supposed to be the instrument of a European energy market, bringing more efficiency and security for consumers, businesses or individuals. With the liberalization of the telecommunications market as a model, which has resulted in European tariffs among the cheapest in the world, and a wind of spectacular innovation.

It didn’t happen with energy. However, in both cases, the State spared no effort, creating regulatory bodies, a separation of networks and services, mediators of all kinds and a protective framework for consumers. But the telecoms revolution was accompanied by an unprecedented technological upheaval, with the advent of the mobile telephone, then Internet access. These two successive waves have broadened the horizon and allowed new entrants to innovate on services and prices.

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Ultimately, the winners were those who succeeded in negotiating the passage from the status of simple reseller to that of operator with its own physical network. In the field of energy, most new entrants have not left the stage of simple brokers with margins as thin as their ecological slogans. While waiting for the alternative energy revolution, we will have to continue to be vigilant by looking at our bills.

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