France’s policy on its energy transition is ambitious but it will still have to deliver “significant investment” in energy efficiency and green energy and also its nuclear installations, stresses the International Energy Agency (IEA) in a report published on Tuesday 17 January, seven years after its previous review of French energy policy.
Over the past ten years the French economy has reduced its carbon intensity and benefitted from greater energy efficiency, notably in the residential sector, highlights the IEA, praising the country’s leadership role in climate change mitigation and green finance around the world and at home, thanks to the adoption of the ambitious set of measures in 2015.
The IEA found, however, that the French government’s plan to cut the share of nuclear power from 78% of electricity produced today to 50% by 2025, while also reducing greenhouse gas emissions by 40% in 2030, will require significant investments in energy efficiency and new low-carbon generation.
Underlining that France has to implement transformation of both its energy system and power its energy market, the IEA says that France’s Transition Act is a “first-class energy and climate framework”, based on a low-carbon strategy, carbon budgets, and the related investment planning. France leads on carbon pricing with a long-term carbon price trajectory set by law up to 2030.
France’s ambitious goal of reducing its share of nuclear power over the next decade amid ageing installations is going to transform its energy sector. Reaching the target will require careful policy guidance, effective markets and strong measures for renewables and energy efficiency, according to the IEA’s latest review of France’s energy policies, the IEA stresses.
Taking the view that the outlook for France’s nuclear sector in the next ten years will be “decisive” for the country’s capacity to meet its climate and energy goals and maintain electricity security, the IEA states that no decision has been taken in favour of long-term operation pending safety reviews of a nuclear fleet that has reached a 30-year average life span.
To speed up France’s energy transition, and guide energy investment, the IEA highlights five avenues. It encourages the government to track progress along robust scenarios, to continue with clear and long-term carbon pricing instruments, to take timely decisions on the safe and long-term operation of nuclear reactors, to further reduce barriers to renewable deployment and to strengthen efforts towards market opening, competition and consumer choice.
The IEA highlights the shortfall of the French policy on renewable energy, deployment of which is still below the IEA average. While solar and biomass are developing well, further government action could help improve the siting, authorising, acceptance and grid connection of wind power, the agency says. Despite recent reforms, price signals from the electricity and carbon markets are weak and technical and market barriers remain for further renewable deployment, it points out.
While acknowledging France’s progress in gas market reform, with higher trade and regional integration, the IEA is critical of the delays in the reform of the electricity market, even though significant reforms (including dropping regulated tariffs for large and mid-sized consumers, and ensuring competitive regulated access to the nuclear fleet) have taken place. “France’s electricity sector has only a few large players”, laments the agency, keen to see hydropower concessions opened to competition – an area of disagreement between Paris and the European Commission – and recommending the ending of regulated sales tariffs for electricity and gas to individuals, as was done for companies and industrial consumers.
By contrast, the IEA commends the French government’s decision to encourage demand response, to launch capacity mechanisms and set investment targets under the multi-annual energy planning. When implementing these significant measures, the government needs to remain vigilant of competition and electricity supply security, notably during times when winter peak demand coincides with low nuclear availability, the agency concludes. (Original version in French by Emmanuel Hagry)