Electricity: despite the opening to competition, the market is today “totally blocked”

the essential
Since the economic recovery that followed the start of the Covid-19 pandemic, alternative providers have struggled to stay afloat in the face of rising electricity costs, so competition is much less fierce.

Fifteen years after the electricity market opened up to competition, you might expect to face an unforgiving jungle, as some like to say, when it comes to choosing an electricity provider.

Today, this is far from the case. There are fewer and fewer alternative providers. Although they were initially attracted by the possibility of having indexed prices in the wholesale market, which until a while ago allowed them to offer more advantageous rates, the same cannot be said these days.

“Since the meteoric economic recovery that we have experienced after the start of the Covid-19 pandemic, the world population, whether individuals or companies, has considerably increased their electricity consumption, which has caused prices to skyrocket in a way quite unpublished”, points out Elisabeth Chesnais, a journalist for UFC-Que Choisir.

fewer options

He explains that the current market is “totally blocked”: “In the face of this price increase, alternative providers have raised their prices a lot or, on occasion, have even gone bankrupt.” Which means consumers ultimately have fewer choices, since there aren’t as many competitive offerings as there once was.

If this situation could lead to more suppliers going bankrupt, according to Elisabeth Chesnais, there is no concern given that the government has designated EDF as a supplier of last resort. “It’s not that risky in and of itself, at least less than price inflation…”

Precisely for this reason, Elisabeth Chesnais recommends returning to EDF’s regulated tariffs, which, by definition, are not subject to variations in market prices. “This guarantee of stability is the most important thing today, especially when we cannot have competitive offers on the market anyway,” explains the specialist, considering that “if a competitive price appears, that undoubtedly means that the subscription It’s overloaded.” or that price does not last over time”.

scams

Attractive offers perhaps, but still risky. Élisabeth Chesnais also warns consumers in particular about providers who capture customers: “in 99.9% of cases, they are scams”. UFC-Que Choisir warns about possible promises: it is important to compare prices in their global reality, taking into account taxes and VAT.

In any case, according to her, “currently there is no good deal possible: the market is so blocked that it makes no sense to compare offers”, hence the interest in returning to regulated rates.

Fixed prices, that is, prices set freely by a supplier who agrees to keep them for a fixed period, can also be attractive. But it depends, on the one hand, on the starting price: if it is lower than the regulated rate, that does not matter much, explains Elisabeth Chesnais. And on the other hand, this choice implies that the consumer is prepared to regularly follow the evolution of the market. “If you decide to commit for several years to a fixed rate, you should monitor what is happening elsewhere so that at the end of the commitment, you can decide whether to stay with this provider or whether others have offered competitive offers since then.”

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