French electricity price for rail will increase 745 percent
SNCF Réseau will increase the electricity prices in France, from 56 euros/MWh in 2021 to 473,51 euros/MWh in 2023, which means an 8.5-fold increase in prices. What are the consequences for rail freight and passengers?
“Despite these alarming figures, the Ministry of Transport remains silent on support for the rail freight sector”, says Alliance 4F in a statement this week. The rail freight association has two main demands concerning the issue. First, a cap on the electricity price to be set at 180 euros per megawatt hour. Moreover, the association is asking for the adjustment of the existing toll aid system. In this case, the change would be that freight toll invoices by SNCF Réseau to the operators would be picked up and paid by the state.
Urging for interventions
One of the risks highlighted by 4F is that higher energy prices for rail might cause chaos for the road freight industry as well. This is because, as the association explained, the road sector cannot absorb all the rail volumes, leading to possible disruptions in the whole supply chain. 4F is urging the French government to act. “Without an appropriate response, the dynamics recorded between 2020 and 2021 of the modal shift will be seriously called into question”, they said.
Alliance 4F brings together twenty-two companies involved in rail freight, from SNCF Fret and its subsidiaries such as ViiA and Captrain France to rail players outside SNCF Réseau like Voies ferrées de France, Transalpine, the independent infrastructure managers Agifi, as well as independent carriers Regiorail, Lineas, Europorte, DB Cargo, T3M, Objectif OFP and more.
Tarriff shield for passenger tickets
The freight alliance is not the only player that is asking for more state intervention to help out the rail freight industry with the continuously rising energy prices. Earlier this week, the Community of European Railway and Infrastructure Companies (CER) has called on EU member states to intervene on behalf of railway companies when it comes to the rising electricity prices. CER stated that the current outlook exposes some worries concerning the financial stability of many railway companies.
As for passenger rail in France, the SNCF will increase its ticket prices by 5 percent on average from January 10, 2023, while setting up a “tariff shield” aimed at to protect certain categories of travellers, it announced in November. The prices of the Ouigo, the minimum prices of the TGV Inoui and the MAX subscriptions remain unchanged. The SNCF estimates the increase in its costs at 13 per cent for high speed next year but announced on November 18 not to pass on the equivalent of this increase to the prices paid by travelers by setting up in turn a ” tariff shield” which will apply under certain conditions. The increase, which will take place on January 10, 2023, will mainly concern tickets purchased at the last minute or the most requested journeys.
Without asking for aid from the State, SNCF Voyageurs “will bear half” of these increases, which would be several hundred million euros, to “protect purchasing power”, “defend the attractiveness of the train” and “continue to allow the development of the TGV”, said CEO of SNCF Voyageurs Christophe Fanichet at a press conference, reported Les Echos.
The National Federation of Transport User Associations (Fnaut) welcomed increases that protect young people in particular. “But the trains are more and more full and the prices are increasing more and more”, regretted Olivier Gazeau, the president of Fnaut. “We would like transparency on prices, and more supply to meet the demand.”