France - Energy
The French energy sector is a mature market subject to very strong competition. Approximately two-thirds of France’s electricity comes from the country’s 56 nuclear reactors, and France has been an electricity exporter for the past 30 years. Just over half of the country’s energy is provided by primary domestic production. France imports most of its fossil fuels and has extensively diversified its geographic sourcing. With less greenhouse effects, electricity and gas have progressively replaced oil and coal use in the main industrial sectors, although oil-based products are still the norm in the transportation sector.
Renewable energy is taking on a growing share in the country’s energy mix, representing a target of 25.3% of France’s gross final energy consumption for 2022. French government support for renewable energies increased 25% with a commitment of €6 billion ($7.06 billion) in 2021. Green energy is a centerpiece of the country’s “France Relance” economic recovery efforts.
The National Energy Mediator reports that there are thirty suppliers that share the global energy market, with the French market dominated by three major players:
- EDF - {Electricite de France}, Electricity supplier/nuclear
- Engie – Natural gas supplier, LNG
- Total Energies - Mixed including fuel & gasoline
France’s multiannual energy strategy (PPE) released in April 2020 codified the government’s plan to reduce nuclear in the energy mix for electricity production from over 70 percent to 50 percent by 2035 and increase the role of renewables. However, the President Macron announced in February 2022 that France would construct six new nuclear reactors (with studies for an additional eight reactors) and would invest €1 billion in small modular reactors (SMRs). Nuclear energy will play a critical role in France’s efforts to achieve its strategic priorities to reducing CO2 emissions, secure supply chains, grow business competitiveness, preserve household purchasing power, maintain skilled industrial jobs, and develop technological expertise in this field.
With 56 reactors spread over 19 nuclear sites, France has the largest nuclear fleet in the world in proportion to its population. Each year, around 405 TWH of nuclear power is produced. The impact of the 1973 oil shock led the French government to initiate a program to build 16 reactors of 900 Megawatts of electricity (MWe), and 20 additional reactors of 1,300 Mwe after 1976. Between 1996 and 2000, 4 other 1,450 MWe reactors were commissioned, bringing the installed capacity to 63.2 GWe.
An EPR reactor (3rd generation) - with a capacity of 1,650 MWe - is currently under construction on the Flamanville plant site. In addition to France’s nuclear power plants, other nuclear sites in France include uranium manufacturing sites, radioactive waste management centers, and research centers operating experimental reactors.
With Russia’s war in Ukraine, the European Union set an ambitious target of reducing dependence on Russian gas. This decision will transform the global European LNG market, generating a boom for LNG producers. Therefore, to facilitate additional LNG imports, Europe planned to build gasification terminals throughout the EU. In 2022, French LNG imports jumped 87%, according to GRT Gaz, the Engie subsidiary managing most of the gas transmission network in France.
The three LNG terminals at Fos-sur-Mer (Bouches-du-Rhône), Montoir-de-Bretagne (Loire-Atlantique) and Dunkerque (Pas-de-Calais) through which the imported LNG is received are operating at full capacity. Consequently, Engie which was planning to close the Fos-sur-Mer terminal, has signed contracts ensuring that this terminal will continue to be used until 2028.
Europe has been buying LNG on a larger scale following the natural gas supply disruption stemming from Russia’s war in Ukraine. To support European energy security, the United States has increased LNG exports to Europe. U.S. LNG exports to the EU have more than doubled since the start of 2022.
Renewable energies have been growing steadily in the last few years in France to reach 11.7% of primary energy consumption and 25.3% of gross final energy consumption in 2019. Renewable energies support approximately 60,000 full-time jobs. The Renewable energy sector is very diverse, covering ten different sub-sectors: Wood energy: 35.2 % - Hydraulic 17.3 % - Biofuels 12.1 % - Wind 10.4 % - Heat pumps (Pompes a Chaleurs which are replacing traditional radiators) 9.6 % - Renewable waste 4.8 % - Biogas 3.4 % Solar 3.4 %. Others (geothermic, agriculture, marine) 3.6 %. The most developed renewable energies are still wood energy and hydropower, but onshore windfarms and heat pumps are two sectors that have progressed the most in the last few years with offshore windfarms currently under development. In absolute levels among the EU Member States, France is the largest producer of hydroelectricity and the second largest for biofuels.
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