Dispatch from France | August '24
***Our weekly Dispatches provide an overview of the most relevant recent and upcoming developments for the shift to climate neutrality in selected European countries, from policy and diplomacy to society and industry. For a bird's-eye view of the country's climate-friendly transition, read the respective 'Guide to'.***
Stories to watch in the weeks ahead
Stories to watch in the weeks ahead
- "Political truce" – France is still without a new prime minister after the "truce" declared by president Emmanuel Macron for the duration of the Olympic Games, which end on 11 August. The outgoing government has limited powers and is only supposed to manage current affairs. The behind-the-scenes negotiations to choose a new head of government continue between parties, freezing other important projects and decisions. The government's presentation of the third national plan for adaptation to climate change (Pnacc) has, for instance, been postponed yet again. The Senate has also postponed until October the processing of bills suspended by the dissolution, such as the energy programming text.
- The aftermath of the elections – The pledges made by the various parties which came out on top in the parliamentary elections may come under close scrutiny in the months ahead, as energy issues and household spending took up a large part of the election debates. The future of ecological planning is still uncertain, says the think tank i4CE, while several decisions are expedited. The multiannual strategy for financing the ecological transition (SPAFTE) should be debated at the beginning of autumn. The financial challenges for local communities should also be addressed (i4CE will publish a new study on this subject at the beginning of September), as well as the question of how households can be part of the transition. Lastly, the future of the law on agricultural policy needs to be clarified, said i4CE, which will publish an assessment of public spending on agriculture and food in mid-September.
- 2025 budget: Financing the ecological transition – The dissolution of the National Assembly on 9 June has put a burning issue on hold: the 2025 Finance Act. The text is eagerly awaited at a time when France has been called upon by the European Union to rapidly return to a deficit below 3 percent (compared with 5.5% in 2023). The Finance Bill (PLF) must be tabled in the National Assembly by 1 October 2024 at the latest.
- Power prices – Regulated electricity tariffs remain unchanged for now, but bills could evolve next year. The possibility of an increase of the TURPE (grid fees), which accounts for a third of household bills and finances the network of high, medium and low voltage lines, is still looming. Investment will be needed to maintain and develop the electricity infrastructure. The Energy Regulatory Commission (CRE) is expected to make a decision on this issue in September. However, this additional cost could be offset in 2025 by the sharp fall in wholesale electricity prices (estimated at between 10% and 15% by February 2025), as suggested by Bruno Le Maire, the French economy and finance minister. EDF has also announced a "sustainable" fall in electricity prices in the coming months.
- Concerns of energy companies – The implementation of the main texts of the transition is eagerly awaited by players in the energy sector, following the consultations held in recent months. This concerns the new multiannual energy programme, which has yet to be reviewed, and the national low-carbon strategy, which is to be put out to consultation, as well as the multiannual financing strategy for the ecological transition, which will be published this year for the first time. The Court of Auditors, meanwhile, called in July for better coordination between the trajectory of public finances and the climate transition. The seven main energy associations and federations urged greater "stability" from the new members of parliament in an open letter on 22 July.
The latest from France – last month in recap
The latest from France – last month in recap
- Power generation – Electricity generation in France has reached its highest level since 2019, with 272 terawatt hours (TWh) being generated in the first six months of 2024. RTE, France's Transmission System Operator, has identified several reasons for increased generation: Hydroelectricity is the leading source of renewable energy in the country. Dams were able to take advantage of the continuous rainfall in winter and spring. Hydropower plants' output was exceptionally high in the first half of the year (up 37% on last year +11.1 TWh; and 13% on the 2000-2020 average). Moreover, nuclear generation continues to recover from the stress corrosion issues, which saw several reactors shut after cracks were detected. Nuclear generation is up 12 percent on the same period last year (+19.1 TWh), but still 14 percent below the 2000-2020 average. The other main renewable sources grew steadily, with wind power generating 25.5 TWh and solar power 11.4 TWh.
- Cost increase – The projections for the gross cost of electricity generation in France up to 2035 were revised upwards by RTE as the need for electricity grows due to higher climate ambitions. The total would hit 46 billion euros in 2030 and 50 billion euros in 2035. The higher costs compared to RTE's previous Energy Futures 2050 projections are due to the extension of the operating life of all the nuclear power plants in service, the higher rate of deployment of renewable energies than in the previous predictions and, lastly, new flexibility requirements.
- Gas prices – Gas prices continue to rise. The average bill rose by 11.7 percent in July, followed by a 1.8-percent increase at the beginning of August. This increase had been anticipated since last February due to the rise in distribution costs (the cost of transporting gas). Nevertheless, it has been the subject of much debate, as the cost of energy is weighing heavily on many households because of the end of the tariff shields introduced by the government to limit the rise in prices during the energy crisis. Energy prices were a key campaign issue during the parliamentary elections on 30 June and 7 July following the dissolution of the National Assembly after the European elections. For more in depth analysis, the Shift Project think tank examined the place of climate issues and fossil fuel phase-out in the debates.
- Hydrogen – A memorandum of understanding for a major project to produce green hydrogen in Tunisia was signed by HDF Energy (Hydrogène de France) and the Tunisian Ministry of Energy at the end of July. With an initial investment of around 3 billion euros, it is set to supply both the European market and French needs. TE H2, which is 80 percent owned by Total Energies alongside the Eren group, had in May announced a partnership with Austrian energy company Verbund to set up a huge Tunisian green hydrogen production project called Notos. Many fear the consequences for local populations of European support for initiatives to develop the use of green hydrogen on the other side of the Mediterranean, mainly in Tunisia and Morocco.
- Solar support down – The level of support on offer for the installation of solar panels has dropped since 1 August The main reason is the decision to stop subsidising Chinese products, which are cheaper and more popular than European counterparts with higher production costs.
- New nuclear – EDF wants to build new reactors within less than six years, chairman Luc Rémont announced. The French multinational electric utility company, which is owned by the government, wants to invest in a new nuclear programme with six, or even 14, new nuclear reactors in France between now and 2035-2040. The first six will be built at Penly (Seine-Maritime), Gravelines (Nord) and Bugey (Ain). As for the Flamanville reactor in Normandy, it should be up and running before the end of the year, after 17 years of construction and accumulated delays. However, several associations took legal action in July against the Flamanville project after irregularities were reported by the French nuclear safety authority (ANS) in the supply chain for materials destined for the plant. The projected cost of the six future reactors was revised upwards last March to 67.4 billion euros, or 30 percent more than initially announced for 2021.
- Data sets – Several sets of data were updated in July, ranging from energy prices (lower prices for petroleum products despite persistently high levels, primary energy production rebound by 13%, 2.6% fall in final energy consumption in 2023) to renewable energies (22.2% of renewable energy in gross final consumption in 2023, an increase of 1.7 percentage points compared with 2022) and household energy consumption.
Camille’s picks – highlights from upcoming events and top reads
Camille’s picks – highlights from upcoming events and top reads
- Local solidarity – A householder can offer his neighbours the surplus electricity produced by the solar panels on the roof of his house. This France Inter radio report takes us into the experience of sharing the electricity produced by photovoltaic panels of a household in a village in Bouches-du-Rhône as AMEP (Association for the sharing of local energy) initiatives multiply across the country. The household also donates a large part of its electricity to a home for the disabled.
- Olympic games and energy issues – Despite their much-criticised impact on the climate (notably in an analysis by Carbon Market Watch), the Olympic Games were also an opportunity to rethink energy’s importance. EDF, which is supplying 100 renewables renewable electricity for all the competition venues, has extensively spoken about its temporary power plants to produce green electricity in the Saint Denis’ athletes' village with the help of solar panels. The supply of electricity also became a security issue throughout the event following the sabotage of train lines ahead of the opening ceremony. In addition, power was out around 10 minutes in several of the capital's districts on the night of 27 to 28 July, following a short "technical anomaly" according to Enedis, manager of the electricity network.
- Fake news – This power cut fuelled fake news, including images of the unlit Eiffel Tower actually dating from 2021. Similarly, it was falsely claimed in July that a new power tariff increase had been applied and that EDF was giving 4.5 percent of its production to Germany free of charge – unfounded information that risks disappointing our German neighbours!
- September highlights – The 2024 edition of the European Energy Transition Conference will be held in Dunkerque (North) from 10 to 12 September, with more than 3,500 energy players expected to attend. Foreign energy policies will be at the heart of debates between scientists and experts. On 20 September, the prestigious ENS (Ecole nationale supérieure) “rue d'Ulm” will be opening its doors to explore the theme of energy through dozens of conferences, round tables and workshops for the 6th edition of the Nuit de l'ENS.
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