An energy market in perpetual motion for the past 2 years
The energy market is constantly evolving, especially over the past two years. While electricity prices were around €60 per MWh on the wholesale market before the covid crisis, today, even distant years like 2026/2027 see their tariffs exceed €100. We experienced peaks of more than €1000/MWh in August 2022 linked to the geopolitical context of the war in Ukraine and the failures of the French nuclear fleet. It took almost a year for markets to return to prices around €130/MWh in October 2023. In markets that are still very tight, prices have jumped by 30% in just 4 days because of the Israeli-Palestinian conflict. Markets are still very unstable, even if the crisis at the end of 2022 was exceptional in view of the global geopolitical context, today there is no mechanism to protect companies from a new rise like this.
Why do we need to compete?
Today's market, marked by a sharp increase in prices, makes comparing offers more important than ever. Atome supports companies in this process, allowing them to benefit from the best possible conditions. Its mission is to analyse, compare and negotiate offers in order to reach advantageous agreements despite an upward trend in energy supply costs.
The benefits of using a broker
Atome brings significant added value by anticipating market movements to optimize energy contracts. Its expertise not only allows us to lock in tariffs at strategic times, but also to offer personalized follow-up for the daily management of the energy budget. For small meters, the broker warns, for example, of the importance of guarding against regulated increases, which could see prices increase by 15 to 20% per year until the end of 2025, and of the benefits of locking in a price when conditions are optimal.
For medium and large meters, the market has shown that it is capable of excessive fluctuations, with energy budgets weighing more and more heavily on companies' balance sheets. Today, it is preferable to secure a budget that seems sustainable rather than hoping for a continuous decrease and risk seeing your budget exploded at a time when choosing to renew it is impossible.
Anticipating your gas and electricity supply
Anticipation is key in the management of gas and electricity supply. It is necessary to follow the market closely in order to choose the right time to subscribe or renegotiate contracts. Atome recalls that market offers, whether fixed or indexed to the ARENH, are directly linked to spot prices, and that it is essential not to find ourselves trapped in tacit renewals, which have led to difficult situations such as those observed at the end of 2022.
Why shouldn't prices continue to fall in the long run?
Energy prices are unlikely to fall in the long term. The substitution of cheap Russian gas by US and Norwegian LNG, as well as the increase in European and Asian demand for LNG, partly explains this trend.
For electricity: the financing of the new EPR initiative, the ageing of the French electricity fleet, the abolition of the tariff shield for companies, the announced end of the ARENH mechanism in 2025, and the massive investments to be made to finalise the energy transition should keep prices high for several years.
Companies should be aware that the energy budget should be managed like any other raw material purchase, especially since for some companies, electricity can account for up to 10% of their turnover.
For those who are currently locked into contracts that are too expensive, the options are limited. Early termination fees are often unavoidable, and the best strategy is patience and proactive securing for years to come to avoid repeating the same mistakes.
In terms of timing, Atome advises to remain vigilant throughout the year. Winter periods, once feared for underwriting due to increased consumption, are less predictive today due to the complexity and interconnectedness of energy markets.
To learn more about Atome, visit their website.
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