IEA: "challenges remain" on French liberalisation

18 August 2004

Necessary research that will allow France to maintain its nuclear power capacity should be carried out with Europe’s new liberalised electricity market in mind, the International Energy Agency (IEA) has warned.
In an assessment of French energy policy, it noted France’s “substantial government research and development in this field and the marketing and construction of French nuclear plants abroad will help in keeping the nuclear option open.” This was crucial, noted the IEA, given that in 2002 nuclear accounted for 79% of national electricity generation. The agency stressed that French plans to build a demonstration European Pressurized Water Reactor unit by 2012 should ensure it was constructed “under market conditions.”
Meanwhile, the IEA warned that the dominance of Electricité de France is risking progress made by the French government in the liberalisation of its power market. It said Paris had been “successful achieving energy security, economic growth and environment protection, with a centralised approach using strong government involvement.”
The French government had taken “commendable steps towards a sound legal and regulatory framework for liberalised energy markets” including the creation of a “largely independent” transmission system operator, non-discriminatory third-party access to power networks, and a strong regulator. However, “challenges remain, in particular incumbent market power, which could threaten the success of liberalisation.”



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