The Government of New Caledonia has adopted a draft resolution calling on the French State to extend its electricity cost equalisation mechanism to the territory, in a move aimed at easing energy costs and supporting economic recovery.
The decision was approved during the Government’s weekly meeting on 25 March, with authorities seeking to include New Caledonia in the reimbursement system that compensates excess electricity production costs in overseas areas not connected to mainland France’s grid.
Under France’s existing framework, tariff equalisation ensures that electricity prices remain broadly comparable across the country by offsetting higher production costs in non-interconnected zones such as Guadeloupe, Guyana, Martinique, Réunion, Mayotte and Wallis-et-Futuna. The mechanism is designed to uphold national solidarity and provide households and businesses in overseas territories with access to energy under conditions similar to those in metropolitan France.
At present, New Caledonia and French Polynesia are the only French territories not covered by the scheme.
Government spokesperson Christopher Gygès said extending the mechanism would address growing concerns over purchasing power, particularly as global pressures, including the conflict in the Middle East, risk further increasing energy costs.
In New Caledonia, electricity prices are structurally higher due to factors such as geographic isolation, limited market size and reliance on imported energy inputs. These costs place additional pressure on households while also affecting the competitiveness of businesses and the wider economy.
Electricity plays a central role in the territory’s economic structure, particularly in industrial and metallurgical activities, as well as in the operation of public services and critical infrastructure. As a result, energy pricing is regarded as a key determinant of both economic stability and growth.
The Government said that, in the current challenging economic environment, reducing electricity costs could serve as an important lever to support business activity, protect purchasing power and aid the territory’s economic recovery.
By seeking inclusion in the equalisation scheme, New Caledonia aims to align itself with the broader principle of national solidarity applied across other overseas territories. The proposal also extends to French Polynesia, which faces similar structural constraints.
The draft resolution will now be submitted to the French State for consideration, with authorities emphasising that the extension of the mechanism would promote equity while supporting the sustainable economic development of France’s overseas regions.
