Electricity contracts must be subject to renegotiation immediately, says the French rail association AFRA. Many rail freight operators in France struggle with the increased electricity bills, which threaten their viability. Infrastructure manager SNCF Réseau quadrupled traction prices in early January, and diesel locomotives already substitute electric ones to reduce operational costs.

At the same time, more and more trucks take on the roads since they remain a cheaper transport option compared to electrified rail. “The reverse modal shift has been initiated, cancelling all efforts to develop rail freight. What an aberration in the context of energy sobriety and ecological transition”, commented Alexandre Gallo, president of AFRA and CEO of DB Cargo France.

Unable to pay bills

Conor Feighan, secretary general of ERFA, mentioned a few days ago in discussion with RailFreight.com that electricity prices are lower compared to the spike they noted a couple of months ago. Nevertheless, they remain extremely high compared to the same period last year.

AFRA confirmed this trend by revealing the charges that rail operators have to pay to SNCF Réseau. The fee for traction current supply quadrupled on 1 January “from 111,95 euros per megawatt-hour excluding tax in 2022 to 473,51 euros in 2023”.

“This rise in energy prices is unsustainable for all rail players”, says Raphaël Doutrebente, president of AFRA freight commission and Europorte. Additionally, he underlines that the sector has been alerting the transport ministry for months. Still, with no actions taken, several operators “face a worrying financial situation and fear that they will soon no longer be able to pay their electricity bills to SNCF Réseau. We, therefore, call for an immediate renegotiation of contracts to return to a sustainable energy price”, he stressed.

Doubling modal share: still feasible?

Since late 2020, France has turned its focus on doubling the modal share of rail freight by 2030 from 9 to 18 per cent. The government drew a national recovery plan for this purpose, which, in the current context, seems to be moving backwards. Efforts provided a positive output, as AFRA informs since, with the contribution of private operators, rail freight’s share in France had increased from 9,6 to 10,7 per cent between 2020 and 2021.

However, those efforts now seem to have been in vain. Gallo stressed that the reverse modal shift in France is in full swing, with increasingly fewer electric trains running. Since France and many other EU states “have not made use of the electricity market intervention enabled by the EU or have not channelled its results to traction electricity users”, as UIRR highlighted a few days ago, surviving the increased costs is only a short-term goal.

That is because the longer-term effects of neglecting rail freight operators and their financial struggles will mostly be apparent in the environmental goals. France is a good example of this looming danger. The country already faced issues with its rail freight sector but is now risking to give it a final blow by “abandoning” it, said AFRA.

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