Degree of reliance on imported energy:
Due to the size of its power market, and to its location in the centre of Europe, France has many interconnections. France is a net exporter of electricity. In 2010, it has exported 28.6 GWh net, i.e. circa 5.57% of its overall consumption.
Oil and gas
With little domestic energy production, the country relies on a diversified set of imports to meet most of its oil and gas consumption. France was the 12thlargest oil consumer and 7thlargest net importer of petroleum liquids in 2011.
Oil represents approximately one-third of France's total primary energy consumption and that share has been falling since 2001. France imports crude oil through three major sea ports (Marseille, Le Havre, and Saint-Nazaire) and the South European Pipeline System (SPSE) to Germany. Four main product pipelines, especially the LHP line supplying Paris, and seven sea ports (including those that take in crude oil) supply France with refined petroleum products. France has very little domestic natural gas production, and the French government banned the use of hydraulic fracturing to explore unconventional resources such as shale gas. French authorities project natural gas demand to remain stable or fall slightly through 2020. France imports natural gas through a variety of cross-border pipelines from the Netherlands, Norway, and Russia. France also imports liquefied natural gas at a number of ports from countries around the world, notably Algeria and Qatar.
Main sources of Energy:
France is the most important nuclear energy producer in the EU. Nuclear power accounts for over 40% of France’s primary energy supply. France exhibits an energy import dependency close to average EU levels, with the majority of imports being oil, which is the second most important source of energy. The share of gas, also imported, has been steadily increasing in recent years. Renewable sources, biomass and hydro also contribute to the energy and electricity mix. Transport is the sector that consumes the largest share of final energy. Energy demand has been growing steadily over the past decades. Given its strong commitment to nuclear energy, France remains one of the EU countries with the lowest CO2 per capita emissions.
France is the second largest economy in Europe, and the second largest consumer and producer of electricity. The French energy sector is traditionally dominated by high share of nuclear power, while RES-E had no significant growth during the last 20 years. Due to the large hydro resources, France started from a substantial share of RES-E, which was 14.8 % in 1990 and slightly decreased to 14.4 in 2008. In 2010, the RES-E share has reached 14.9%.
Extent of the network:
The French distribution grid corresponds to a voltage level of up to 50 kV, while the German distribution network for example includes also the 110 kV level. In France the consistency of the transmission networks is determined by the decree No. 2005-172 of 22 February 2005. With some exceptions, the transmission grid comprises all installations with a tension higher or equal to 50 kV. Stakeholders highlighted the above outlined tension structure as main reason for the fact that in France grid saturation occurs in the transmission grid, while in Germany it rather occurs in the distribution network, even though the grid saturation occurs on the same voltage level in both countries.
While France generally has steady power supplies thanks to its 58 EDF-run nuclear reactors, it lacks flexible capacity - usually generated by gas, coal or oil-fired plants - to meet peak evening-time demand during cold snaps, when people return home from work and switch on heating and appliances.
Potential for Renewable Energy:
The national action plan envisages a total installed capacity of 5,400 MW in 2020, of which 4,860 MW would come from photovoltaic panels (i.e. 10 times more than in 2010) and 540 MW would come from concentrated solar energy, thus producing a combined total of 6.9 TWh of solar electricity per year.
Each SRCAE (Schéma Régional du Climat, de l’Air et de L’Energie) include regional wind energy plan with potential locations for onshore and offshore production. Overall target for wind energy in France by 2020 is 25,000 MW (onshore 19,000 MW, offshore 6,000 MW).
The National Renewable Energy Action Plan (NREAP) envisages an increase in the production of biomass electricity from 3.8 TWh in 2010 to 17.2 TWh in 2020, by doubling solid biomass electricity production (wood and household waste) and tripling biogas electricity production. The incineration of household waste (currently representing more than 50% of solid biomass electricity production) should remain the same; it is therefore wood and biogas that should provide the additional 13.4 TWh.
The NREAP envisages doubling the capacity of the experimental deep geothermal installation (>5,000m) at Soultz-la-Forêt in Alsace (from 1.5 to 3 MW) and significantly increasing the capacity of the installations in use in the French West Indies, resulting in a total increase from 0.1 TWh in 2010 to 0.5 TWh by 2020.
The NREAP envisages obtaining a total capacity of 140 MW from various experimental technologies currently producing 0.65 TWh per year, which shall be added by 2020 to 250 MW of capacity produced by the La Rance Tidal Power Plant (Brittany) which currently produces 0.55 TWh per year.
Potential for Energy Efficiency:
As of 2009, primary energy intensity in France was slightly above the European average, although industrial energy intensity came in just below the average. Energy companies are subject to binding energy reduction schemes under the 2005 Energy Law, with the period 2010-2013 having a target of 345 TWh of cumulative lifetime savings, building on the 65 TWh savings achieved in the 2006-2009 period. Per-capita consumption of energy in France in 2009 was over 20% higher than the European average, and as of 2011 the transport sector was the largest consumer of total final energy in the country (28.6%), closely followed by the residential sector (24.2%), indicating the potential for further measures in these sectors.
The current National Energy Efficiency Action Plan for France sets a number of policies in place across all sectors, particularly ambitious targets for retrofitting of buildings and efficiency standards for new buildings. Financial incentives and auditing procedures have also been put in place in the industry and tertiary sectors, although exceptions and rate reductions for some forms of natural gas and electricity use are also given. No targets have yet been specified in terms of energy saving obligations on industry, also, although both voluntary agreements and binding targets are mentioned in the Plan.
Power production was strongly regulated by the state, which controlled the company operating nuclear plants (Electricité de France - EdF). Even after liberalisation of the energy markets, the French government continued to protect its national energy from outside competition.
France’s electricity sector is still generally dominated by their former national vertically integrated incumbent Electricité de France (EdF). EdF, now vertically separated from its distribution and transmission grid ownership and operations to the extent required by the EU Directives, still owns the largest retail supply business in France.
Structure / extent of competition:
- France has liberalised its electricity sector slowly relative to its neighbours and relative to the requirements of the EU.
- Opening of the retail market for the largest customers in 2000, for non-household customers occurred in 2004, while household customers could choose their supplier from 2007. Regulated third-party access and regulated grid tariffs are in place since 2004.
- The electricity market has been fully open to competition including households since 2007.
- Full customer choice was available since 2007, but competition was weak to begin, according to IERN (country profiles France), and the large user market was liberalised with laws in 2003 and 2005.
- The gas market has been open to competition including households since 2007.
- The retail gas market in France is also characterised by the presence and large market share of the former incumbent national utility, Gaz de France (GdF).
Legal unbundling was required of the transmission company in 2004 and the distribution companies in 2007. EdF remains the asset owner in a separate company.
Existence of an energy framework and programmes to promote sustainable energy:
Overall French energy policy is regulated by the Planning Act of 13 July 2005, which aims to reduce national energy dependency, ensure competitive power prices and tackle climate change. The French government implemented several policies to reach these objectives, including renewable energy subsidies, a feed-in tariff for renewables, and tax incentives for renewables.
French energy policy is based largely on its use of nuclear power for electricity. The reliance on nuclear power, which is essentially free of direct carbon emissions, has also led to a French GHG emissions profile that is much lower than the EU average – per capita and per unit of GDP. France’s emission targets have thus been lower than those of similarly industrialised economies. France has implemented climate strategies in various forms since 1995. Initial action plans were followed by the National Programme for Combating Climate Change in 2000, which was in turn followed by the national strategy for sustainable development published in 2004 and updated in 2006.
The policy for combating climate change was finally strengthened at the end of October 2007 within the framework of the conclusions from round tables on “the Grenelle Environment Forum” and eventually named the Climate Plan 2004-2012. The latter is France’s action plan for meeting its commitments in relation to the Kyoto Protocol. It is now required that the climate policy be updated every two years according to the 2005 Energy Policy Framework Law. The “Grenelle Environment Round Table” initiated under the presidency of Nicolas Sarkozy, and the Environmental Conference introduced in September 2012 by the government of Francois Hollande, reflect France’s engagement in green growth measures and climate mitigation.
The goal of these processes is to develop a governmental work programme through the formulation of a national roadmap identifying the path forward on sustainable development and particularly on energy transition in close consultation with industry, government, and non-governmental organisations. The French government finances this process through e.g. its “Investment for the Future” Programme (Programme d´investissements d´avenir). Within this framework, France has set itself the target of reducing its greenhouse gas emissions by 2050 by at least 75%. President Hollande pledged to cut the share of nuclear energy in the country's electricity mix to 50% from 75% by 2025. In September 2012, he reinforced this plan and initiated an "energy transition” debate that is to culminate in a new energy bill in June 2013. The debate will include a wide range of stakeholders and is expected to have important impacts on the development of renewable energy.
In March 2011, the Ministry of the Environment and the Ministry of Economy passed a new decree on the support of photovoltaics power that brought major changes to the tariff structure. Tariffs for all sizes of installation were lowered significantly by 20% after having been one of the highest in Europe. Policymakers introduced an automatic, recurring degression of up to 9.5% for photovoltaic tariffs that occurs four times a year and depends on the capacity additions in the previous quarter. If huge quantities are added, tariffs can potentially decrease by up to 33% annually. The revision of the policy also brought a new categorization to the tariffs that distinguishes between fully integrated and integrated installations, location (mounted to private, commercial, and public buildings; ground-mounted), and size.
In the heating/cooling sector, policies largely remained unchanged. Since the beginning of 2011, the tax deduction benefits for investments in heating/cooling installations that use renewable energy (“Eco-Prêt à Taux Zéro”) can no longer be combined with the zero interest loan (“Crédit d‟Impôt Développement Durable”).
A fixed feed-in tariff and a public competitive bidding scheme for biomass and offshore wind power plants are the key instruments for RES-E support in France. The feed-in tariff covers all major renewable energy technology and provides support for periods of 15 and 20 years depending on the technology. Tariffs are differentiated by technology and size of installation. Except for wind and solar photovoltaic power, they are not subject to annual degression; policymakers reduce them on an ad-hoc basis every few years. Additional bonuses are paid for the compliance with certain quality criteria. Over the last three years (2009-2011), several modifications to the legislation have been made, particularly what concerns the support of power production from solar photovoltaic, biomass, geothermal and wind energy.
France has three major instruments for the support of renewable energy sources in the heating and cooling sector. The Heat Fund (“Fonds Chaleur”) is the most important instrument for large-scale installations. It enables heat producers to receive a region-specific feed-in premium for every MWh of heat they feed into the network. For small-scale installations of households and municipalities two main incentives are in place, which are a zero interest loan (the “Eco-Prêt à Taux Zéro”) and a tax deduction policy (the “Crédit d’Impôt Développement Durable”). Some regions provide investors of small scale projects with additional fiscal incentives.
Renewable energy sources in the transport sector receive support through several policies. A quota obligation forces retailers to blend their fuel with a minimum share of biofuels. Blended fuels and pure biofuels also benefit from reduced taxes. There is a bonus-malus system, which encourages the replacement of inefficient vehicles with low-emission vehicles. France also provides buyers of electric and hybrid vehicles with a premium.
Energy efficiency measures
Economic stimulus measures provide incentives for scrapping old vehicles and launch a zero-interest loan programme for residential energy efficiency improvements. They also included energy requirements for new buildings (50 kWh/m2/year) and energy efficiency assessment and renovation of state-owned buildings.
Current energy debates or legislation:
The development of the grid has been identified as a key issue for the further integration of RES-E into the grids. Yet, there is no comprehensive grid development plan for the whole of France. The “Grenelle II”-Act has called for the creation of regional development schemes on climate, air and energy, which should outline the regional planning for the RES development, including quantitative objectives. In addition the ministry for energy is also defining wind off-shore zones, which will be developed in the framework of calls for tender. The sum of the before mentioned plans and development zones will outline the required development for the whole of France. However, as time is running short, stakeholders expressed concerns as to the realisation of the plans until 2020.
Recently, the potential to obtain natural gas via hydraulic fracturing has spurred debate in France, as the practice is prohibited there since July 2011 due to its negative impact on the environment. Shale gas potential continues to divide political parties – current president Francois Hollande rejected several applications for oil shale exploration licences in 2012.
Major energy studies:
European Energy Network
France is member of the EnR, which is a voluntary network of European energy agencies which aims at promoting sustainable energy good and best practice. EnR also strengthens cooperation between members and other key European actors on all sustainable energy issues (energy efficiency, sustainable transport and renewable energy). The French Environment and Energy Management Agency (ADEME) holds the presidency of the network for 2013.
Role of government:
Two ministries are responsible for the elaboration and issuance of the decrees on feed-in tariffs, which are the Ministry of the Environment and the Ministry of the Economy. Tariffs for solar photovoltaic installations are issued by the Energy Regulation Commission (CRE).
Ministry of Ecology, Sustainable Development and Energy
The Ministry of Ecology, Energy, Sustainable Development and Town and Country Planning was established in 2007. The name was changed to Ministry of Ecology, Energy and Sustainable Development and the Sea in 2009. Combining the separate institutions focusing on transport, urban development, climate change and energy was a presidential priority and the ministry now ranks third in size and importance after the President's and the Prime Minister's Offices.
The Directorate-General for Energy and Raw Materials (DGEMP), previously attached to the Ministry of Economy, Finance and Industry, was changed to the Directorate-General for Energy and Climate (DGEC) in 2008. The climate section of the Inter-ministerial Mission for the Greenhouse Effect (MIES), the previously independent National Observatory for Climate Warming Effects (ONERC) and the Office of Air Quality were added to DGEC.
Government agencies in sustainable energy:
French Agency for Environment and Energy Management (ADEME)
The French Agency for Environment and Energy Management (ADEME) is a public agency under the joint authority of the French Ministry for Ecology, Energy and Sustainable Development, and the Ministry of Higher Education and Research. The agency is active in the implementation of public policy in the areas of the environment, energy and sustainable development. ADEME provides expertise and advisory services to companies, local authorities, government bodies and the public at large, helping these actors finance projects, in particular research, in five areas (waste management, soil conservation, energy efficiency and renewable energy, air quality and noise abatement) and assists them in their progress towards sustainable development.
Energy planning procedures:
Réseau de Transport d’Electricité is the French Transmission System Operator, and is a wholly-owned subsidiary of EdF. RTE is responsible for providing yearly ten-year network development plans, based on both existing and project demand, and existing and projected supply. The plan must also include a list of all upcoming projects over the following three years. The generation assumptions that form the basis of the NDP come from biennial generation adequacy forecast reporting, which is prepared y RTE in conjunction with the national regulator, the Energy Regulatory Commission (CRE). Following the production of the NDP, it is submitted for consultation with the Comité des clients utilisateurs du Réseau de Transport d’Electricité (CURTE), the transmission system users’ committee, and then to the CRE. The CRE opens the plan to public consultation, and RTE is obliged to accept the proposals made in the NDP following this.
The investments described in the three-year section of the NDP are binding. For implementation, the TSO must develop a yearly investment plan to be submitted to the NRA for approval.
Energy regulator Date of creation:
The French Energy Regulatory Commission (CRE) is an independent board created in March 2000 with responsibility for the opening of the energy markets. While it originally dealt only with the electricity market, its powers were expanded to include the gas market in 2003.
Degree of independence:
Article L 133-6 of the energy code requires members and officers of the CRE they exercise their functions independently and impartially, prohibiting any instructions from the government or third parties. In addition, the provisions of Article have also imposed an obligation of professional secrecy.
According to the provisions of Article L 132-1 of the energy code, CRE is organized around two independent bodies (a board that consists of 5 members and a committee of dispute settlement and sanctions consisting of 4 members) using transparent procedures for developing their decisions and opinions (working groups, public consultations, hearings).
Regulatory framework for sustainable energy:
The French legal framework provides for the general obligation of the grid operator to connect RES systems to the grid. Still, the grid operator is only obliged to conclude a contract on a non-discriminatory basis. Renewable energy installations do not enjoy a privileged access to the grid, except in the context of the regional schemes for grid connection of renewable energies foreseen by the “Grenelle II”-Act. As for the costs of grid connection, the French legal framework is constantly evolving since 2007. Stakeholders qualified the current regime as a shallow-deep-approach, while also highlighting that the new provisions of the “Grenelle II”-Act are showing a tendency towards a shallow cost regime. Due to the definition of the transmission and the distribution grid, respectively their voltage levels, saturation in France is an issue mainly for the transmission grid. The French purchase obligation for RES-E provides generally favourable conditions for the development of electricity from renewable sources.
The CRE is responsible for ensuring open access to all transmission and distribution networks (for electricity and gas) for all eligible suppliers to customers and the independence of these networks from any influences. It proposes transmission and distribution tariffs in both the electricity and gas sectors to the government which than has the authority to accept or reject them.
Role of government department in energy regulation:
The French Competition Authority has the power to prevent and sanction non-competitive processes in the energy sector. It must inform the CRE when seized of any matter that would fall under the CRE’s jurisdiction. The FCA must also notify the CRE of any abuse of a dominant position or any anti-competitive practice in the gas or electricity sector. The Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF – Department for competition, consumers and fraud) is tasked with enforcing adherence to the new energy market regulations in the sector.
The financial impact of the legal obligation regarding ancillary service for RES-E installation operators is a barrier for the further development and the integration of RES-E, as additional financial burdens have to be covered.
As far as the obligation is addressing newly constructed installations, there would be the possibility to raise the Feed-in tariff of these installations, to cover at least a certain share of the additional expenses, which the installation operator has to bear by complying with its legal obligation; thus further promoting the development and integration of RES-E and facilitating the operation of the electricity network, even with a high share of renewable electricity.
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