This contribution is based on a policy paper published by the author in July 2022 reflecting on France’s energy future available here (in French).
When officially submitting its national recovery and resilience plan (NRRP) on 29 April 2021, France chose to dedicate nearly half (46%) of its overall €40bn envelope coming from the EU to support climate objectives, resulting in €18bn being allocated to the green transition. In France, final energy consumption breaks down as follows: oil (42%), electricity (25%), gas (20%) and renewables/heat (13%). Consequently, the foreseen spending was primarily directed towards building renovation and sustainable transport since these sectors are, respectively, the two main consumption factors for gas and oil.
While the plan was formally adopted by the Council on 13 July 2021, since then both the political landscape and constraints have significantly changed in France. Despite being reelected as President of France, Emmanuel Macron failed to secure an absolute majority during the following legislative election which complicates the implementation of his presidential manifesto. In addition, like the rest of the continent, France has been undergoing a fossil fuel crisis that has been exacerbated by the war in Ukraine.
In order to shield the consumers from the price surge, the country has already deployed a €30bn package which mainly contains climate-damaging responses and non-targeted measures (fuel discount, opening of a new LNG terminal, gas price freeze for residential customers until the end of the year). As a result, France has so far successfully managed to protect its citizens from bearing the burden of the ongoing energy crisis. However, as the measures put in place do not comply with the green transition objective, France is expected to design a coherent investment scheme that combines short (protecting the most vulnerable ones to ensure a just transition), medium (having France as a leader in the energy transition) and long-term imperatives (meeting its climate target).
France’s original plan was to focus on sectors that were lagging behind in terms of decarbonisation (transport emissions are currently stagnating in France, and the rate at which building emissions are declining is way too slow for France to be meet its climate targets). However, France will also have to tackle power generation constraints to achieve both its energy transition and its desire for an industrial renaissance.
Effectively addressing the decarbonisation challenges
In France nearly one out of five houses (17%) are classified as worst-performing. Hence, according to estimates, 5.6M households are affected by energy poverty.
Out of the €5.8bn allocated to building renovation, the French NRRP devotes €1.4bn to an already existing grant scheme supporting insulation, heating, ventilation or energy audit works on private dwellings called “MaPrimeRénov’” in order to achieve relevant energy savings (at least 30%). However, there is a major flaw in this scheme. The energy savings objective has no legal effect and climate compliance will only be evaluated according to the number of grants provided under the supporting scheme instead of the effectiveness or the quality of the renovation. While the scheme allowed to perform 700.000 renovations in 2021, most of the work done (86% of the files) consisted in small improvements (solely replacing windows, or boilers for instance). In fact, only 1.000 (0.2% of the files) could be categorized as deep renovations. According to the French Agency for Ecological Transition, deep renovations require work on the entire building as it allows to cut energy consumption between 60 to 90%. Instead, the available estimates show that, on average, energy renovations in France only manage to reduce energy consumption by 20%.
To make the best use out of the European funding, France will have to massify global renovation through the adoption of Minimum Energy Performance Standards while building an entire ecosystem that is fit for the upcoming French renovation market. If over the last decade France had implemented its renovation targets from 2008, it would have saved the equivalent of its 2019 Russian gas import and would be able to face this winter in a more serene way. In order to ensure that the building sector is able to deliver, one of Macron’s electoral promises must be fulfilled: a law programming climate investments that would set in stone how much money will be allocated per sector over the next five years should be adopted in 2022 in order to give more visibility and predictability to the actors in the sectors involved.
The transport sector will receive a €7bn envelope to modernize its railway network (€4.4bn) and build new clean transport infrastructures (€2bn). In France, the transport sector is the sector that emits the most GHG gases in France. Opinion polls conducted prior to the French elections showed that French people remain more skeptical towards electric vehicles or using alternative mobility sources in comparison with other EU Member States for instance. Such results could explain the reluctance of the current French government when it comes to discussing the reduction of car speed on highways and deciding instead of subsidizing e the reduction of gasoline prices. Still traumatized by the Yellow Vest protests that occurred in 2018-2019, the French government was indeed quick to realize the inflammatory nature of an energy price surge in France. With the EU agreeing on the end of the sale of combustion engine vehicles by 2035, major changes will be needed in the years to come to convince public opinion on the feasibility of such a turn.
To avoid a dead-end, investing in sufficiency measures related to mobility to trigger substantial behavioral changes among its citizens appears as one of the major challenge for the government. In the same way, the reflection concerning the training and the reorientation of the workforce must be carried out promptly. In order not to be caught unprepared, designing measures allowing the employees directly concerned to fully have a say in tomorrow’s energy transition is mandatory. Public consultations will also be one of the essential steps to foster public acceptance. Effectively reconsidering its relationship with energy in an era where diverting from fossil fuels is more than ever paramount for France.
Making France a driving force in the green transition
Additionally, the French NRRP also puts an emphasis on green innovation by investing more than €4.5bn in that area. This includes, for instance, investments towards the decarbonization of industrial processes (€300m) or investments in R&D and innovation (€1.9bn). Those investments are more than ever essential to close the existing gap with EU countries like Germany (€3.4bn) or the UK (€3.9bn) that lead the way in terms of yearly (2021) investments in cleantech. Ultimately, the French positioning could help build a momentum to ensure that Europe leads the way towards climate neutrality and overtakes US or Chinese competitors, therefore strengthening its strategic autonomy.
However, to ensure the effective reindustrialization of its productive fabric, France will have to boost its power generation in a context where, contrary to its neighbors, France is also facing an electricity generation crisis. Over the last 20 years, France used to be a net electricity exporter during summer. That was not the case in 2022 as half of its nuclear fleet was shut down (for maintenance or security reasons) resulting in France importing electricity rather than selling it. This vulnerability will be even more problematic during next winter as a continuing drought might hinder the hydropower generation (12% of annual power generation in France) and as gas resources will be scarce and precious in France but also in its vicinity (currently 10% of power generation comes from gas in France, 20% at EU level).
France is also the most temperature-sensitive country in Europe when it comes to winter as cold weather leads French to use their electric heater therefore increasing the demand for electricity. To see its ambitions finally materialize, France will have to adopt a pragmatic approach. Currently, France is the only European country that did not meet its renewable targets set at European level (19.3 % of gross final energy consumption in 2020 instead of 23%) and will have to massively invest in renewable energy while reducing the delay of permitting that remains far too long in comparison with its neighbors. This should go hand in hand with an extension of the operation of the nuclear fleet as long as the French Nuclear Safety Authority allows it to benefit from affordable electricity that would allow the revival of its industrial policy.
Recently, Emmanuel Macron considered that France was “living a great upheaval” that would be based on “the end of [energy] abundance” meaning that not managing well the current energy crisis would definitely endanger the realization of French long-term climate and industrial objectives. As the vast majority of the measures that are beneficial for French consumers also go in the direction of ensuring security of supply and tackling climate change, France is at a turning point. The following years will be decisive in determining whether or not France will be a beacon to “make our planet great again”.
With the support of the European Commission's Representation in Italy.
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