what you need to know about the new device

ASSISTANCE FOR ENERGY COMPANIES. To support companies affected by the energy crisis, the government is implementing various financial aid.

[Mise à jour du mercredi 2 novembre 2022 à 10h42] “It is out of the question to bring down the industries in our country”, hammered Agnès Pannier-Runacher, this Wednesday at the microphone of France Inter. The Minister for Energy Transition affirms that we must “fight” in the face of this energy crisis which continues to worry families, but also businesses. “There is aid that we have negotiated at European level and that could reach over 100 million euros for large companies”, argued the minister.

During a press conference on November 27, Elisabeth Borne, Bruno Le Maire and Agnès Pannier-Runacher confirmed the imminent implementation of new measures dedicated to companies:

  • An aid called an “electric shock absorber” should allow thisreduce by 120 euros per megawatt hour (MWh) the electricity bill of VSEs that do not benefit from the tariff shield, VSEs and SMEs . This relief will be automatically deducted from the companies invoice. Companies that have signed contracts with their supplier that provide for a price per megawatt hour (MWh) of between € 325 and € 800 will be eligible for this aid. This will be implemented from 1 January 2023.
  • Companies that cannot apply for the electric shock absorber will benefit from a one-stop shop in January 2023. The aid ceiling will be raised to € 150 million for ETI and large companies, eligible as soon as the bill increases by 50%. In addition, the EBITDA loss criterion is removed and replaced by a decline in EBITDA.

“We know that there are special cases: they will be treated case by case so that no company in difficulty is excluded”, insisted Bruno Le Maire. This new aid will not widen the deficit, Elisabeth Borne assured. Of the 12 billion euros announced, 7 billion in particular will come from “revenues” taken from energy companies as part of an exceptional tax.

What is the electric shock absorber?

At the meeting of 27 October, the Prime Minister, the Ministers of Economy and Energy Transition unveiled the implementation of a new system for SMEs and VSEs that do not benefit from the tariff shield. To help them cope with the energy crisis, the government offers to cover part of their electricity bills.

“The electricity bill in our country has two components: one part that comes from nuclear power, which is cost-controlled, and another that is exposed to market prices,” premier Elisabeth Borne recalled at this press conference. It is this last part that explodes It is on this part of the account that we act by covering half of the additional costs over a reference price of 325 per megawatt hour By integrating the nuclear share, this corresponds to taking over from an average price of 180 euros per megawatt hour. The savings obtained with this mechanism were calculated on average at 120 euros per MWh, underlined Bruno Le Maire.

There will be no steps to take: the device will automatically be applied to the company’s electricity bill.

What is the price shield?

The tariff shield currently affects companies that have fewer than ten employees and generate less than two million euros in turnover. For them, as for families, the increase in electricity and gas prices is therefore limited to 15%. This system complements the aid already in place for large energy-consuming companies. There will not be no very broad tariff shield for French companies, like the one put in place to protect families, specified the ministers of the Economy and Energy Transition, who met on 21 October in Bercy in front of the various professional federations. It would be “too dangerous”, Judge Bruno Le Maire.

What “gas and electricity” assistance for large energy-intensive companies?

Companies whose energy bills exceed 3% of their turnover are entitled to financial aid to meet their expenses. The amount is equal to:

  • 30% of the energy billwithin the limit of two million euros, as soon as the company suffers a drop in gross operating margin (EBITDA) of at least 30% compared to the reference period of 2021 or has a negative EBITDA
  • 50% of invoices up to a limit of 25 million euros for companies that have both a negative EBITDA and losses equal to a maximum of double the amount of the invoices, with coverage of 80% of the losses at most
  • 70% of invoices within the limit of 80 million euros for the companies in the above case that also operate in a sector of strong international competition, listed here.

From 1 November the amount of aid will be doubled for SMEs and the value of 3% of turnover will no longer be based on 2021, but in the last months of 2022, said the Minister of Economy. He also said that it would be enough for the company’s EBITDA to decrease to qualify for this aid. The request is made on the professional space of the company on the tax site. It must be done on specific dates depending on the months for which the help is requested:

  • For the months from March to August 2022: until 31 December 2022
  • For the months of September and October 2022: from 15 November 2022 to 31 January 2023
  • For the months of November and December 2022: from January 16 to February 24 2023.

What does the “Zero Fossil Industry” call consist of?

This aid concerns operating companies practices of decarbonisation of one’s business. The company must register for one of the three sections of the call:

  • Low Carbon Heat for Conversion to Biomass (BCIAT)
  • Energy efficiency and process decarbonisation (DECARB IND), with four pillars: energy efficiency, modification of the energy mix, input of alternative materials, reduction of greenhouse gases (GHG) other than CO₂
  • Rapid deployment of decarbonisation in industry (DECARB-FLASH).

For the first two parts, the presentation of the projects is closed, for the third it can be done until November 23 on the Ademe website. The call as a whole benefits from a total budget of 150 million euros.

PGE resilience, what is it?

This state-guaranteed loan concerns companies which are particularly affected the war in Ukraine. Their cash flow must be directly or indirectly penalized by the conflict. Help can then go up to 15% of turnover. The study of the dossiers is carried out on a case-by-case basis.

What is the Resilience subsidized loan?

is direct government loans. They are aimed at companies affected by the crisis and by supply difficulties related to the war in Ukraine. These loans are aimed at VSEs, SMEs, ETIs and, as a priority, industrial companies with more than 50 employees. Companies that have not been able to obtain financing, whether from a bank, a private investor, or a loan guaranteed by the State, are eligible to meet their investment or financing needs.

Requests should be addressed to the Departmental Committees for the examination of corporate financing problems (CODEFI). Low-interest loans have a maturity (i.e. the maturity date on which they must be repaid) of six years. Sometimes they are eligible for a one-year franchise, meaning that the company is not required to reimburse anything during this period. The current rate is 2.25%.

What is the card with energy suppliers?

The government has made major energy suppliers sign a charter pledging to do so correct application of existing contracts and their renewal conditions. In total, 25 commitments were made, including to notify the companies two months before the contract expires or to grant them payment facilities.

In the event of a dispute, companies with fewer than ten employees or with less than two million euros in turnover can appeal to the national energy broker. In addition to these figures, they can seize the mediator of the companies, or directly the mediator of Engie or EDF if the dispute is with one of these two suppliers.

Publication of a reference price for electricity

The Energy Regulatory Commission (CRE) will soon publish an electricity reference price for different professional consumer profiles, also forthcoming. This will allow them to compare the reference price with the price offered by a supplier before committing.

Guaranteed by the state with electricity suppliers

The financial law for 2023 requires the state to provide a guarantee to reduce the risk of non-compliance of companies with respect to their energy supplier. This will be a counter-guarantee of the bank guarantees required at the time of entering into energy supply contracts in order to reinsure these contracts covered by a credit insurer. The aim is to reduce suppliers’ requirements in terms of guarantees and security deposits at the time of signing contracts.

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