Electricity: prices finally stable for households thanks to renewable energies?

Four electricity suppliers – Enercoop, Ilek, Octopus and Volterres – are proposing to extend the benefit of over-the-counter contracts concluded between professionals to households. These allow suppliers to obtain renewable energy directly from producers, and thus offer more stable electricity prices in the long term.

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They are among the most ecologically virtuous players, and propose to go second in terms of renewable energy. Enercoop, ilek, Octopus Energy and Volterres announced on November 25 the creation of a “collective of green suppliers”. Their common point: their contracts are labeled “VertVolt” by the Ecological Transition Agency (Ademe), a distinction obtained by only eleven energy suppliers. This label guarantees the customer that their electricity comes directly, and in a quantity equal to their consumption, from a renewable energy producer.

Without mentioning it specifically, these four actors are trying to fight against green laundering (greenwashing in English) of many suppliers on the market, who claim (legally) to market green electricity only thanks to the guarantees of origin system. This compensation is not as rigorous as the Ademe label, since it allows suppliers to buy renewable energy certificates from producers… without ever buying their electricity from them. The latter can therefore come from any other production source.

“A supplier can buy electricity from a German coal-fired power station, but in return purchase a guarantee of origin label from an Icelandic hydropower plant. This poses a lot of problems”explained Vincent Maillard, the founder of Octopus energy. The price of these guarantees of origin being currently low, it does not make it possible to properly finance the development of new renewable energy installations, wind or solar among others.

Stabilize electricity prices

To further accelerate the rate of installation of renewable energies, the “Collective” made three proposals, one of which directly concerns the prices of electricity contracts: “Democratizing intermediated over-the-counter contracts”. Behind this technical term, a simple principle. This is a very long-term contract, from 10 to 30 years, signed between a producer – here of renewable electricity – and a supplier, the latter then supplying homes. Reserved for the moment for institutional and industrial clients, the “collective” plans to extend this mechanism, currently reserved for institutions and manufacturers, to individuals. In order to protect energy suppliers from rapid contract termination by households – the latter can terminate their contract free of charge and at any time – and therefore from a loss of money, BPIf France, the public investment bank , could use its guarantee fund as financial protection, hope the four players.

“Individual consumers and small and medium-sized businesses, who have a real appetite for green offers, could also benefit from a supply of renewable energies at a more stable price in the long term”estimates Olivier Soufflot, deputy director of supply at Enercoop. These long-term contracts could, for example, serve as a price shock absorber in the event of a new energy crisis, especially among suppliers who have a sufficiently large share of over-the-counter contracts among the volume of electricity supplied to their customers. At Enercoop, this share reaches 15%. A percentage which will have to increase significantly in the following years among all suppliers to best finance the development of renewable energies.