French firms ready to curb energy use to avoid rationing – lobby group

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PARIS — French firms will play their part in meeting a government demand to cut energy consumption by 10% to avoid rationing amid concerns about power shortages and spiraling prices as the war in Ukraine grinds on, a leading business lobby group said on Monday.

The government is urging companies to save power through dimming lights, closing external doors when running air conditioning units or heating systems, and switching off illuminated advertising hoardings at night among other means.

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For energy intensive industries, the challenge is greater.

“It is not impossible. It is a significant effort but absolutely necessary because we want to avoid rationing and power cuts that stop production,” Geoffroy Roux de Bezieux, head of the Medef lobby group, told France Inter radio.

Asked about the threat of a temporary windfall tax companies making bumper profits on the back of the energy crisis, Roux de Bezieux said he was firmly opposed to the idea.

Over the weekend, Prime Minister Elisabeth Borne told Le Parisien newspaper she was “not closing the door” on a windfall tax, though she added it made more sense for companies to adopt measures that lowered prices for consumers and improved the purchasing power of their employees.

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“The biggest profit-maker is the state whose fiscal revenues jumped in the first half … thanks to the bumper profits of these companies,” Roux de Bezieux said.

Medef holds its annual post-summer conference this week.

Borne is expected later on Monday to urge businesses to step up their efforts to save energy as prices spiral higher on power markets, shaken by the war abroad and nuclear production problems in France.

French year-ahead baseload power hit a record high of 1,200 euros/megawatt hour (MWH) on Monday.

French consumers have been relatively shielded for soaring power and gas prices so far thanks to government-imposed caps that run until the end of the year.

“We will maintain measures to cushion energy prices,” Borne told Le Parisien. “We will not let energy prices explode.”

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France is less reliant than some neighbors on gas imports from Russia, which account for about 17% of its gas consumption. But concerns about supply from Russia nevertheless remain.

Gas giant Engie on Monday confirmed that it was in talks with Algeria’s Sonatrach to increase imports from the north African country.

“These exchanges are part of the government’s strategy to diversify gas imports over the past several months,” the energy ministry said in a statement. (Reporting by Dominique Vidalon and Elizabeth Pineau; Writing by Richard Lough; Editing by Tassilo Hummel and Louise Heavens)