France's "ambitious targets" to reduce its nuclear share of electricity production from more than 75% to 50% by 2025 may be compromised by a lack of alternative low-carbon energy sources that are as reliable as nuclear, the International Energy Agency (IEA) said on 17 January in its latest country review of energy policies.
“Energy Policies of IEA Countries: France 2016 Review” praised France for "setting in motion significant reforms towards more secure, affordable and sustainable energy supplies and the green growth of its economy".
France's electricity industry is "undergoing considerable financial challenges, but the restructuring and recapitalisation by the state should ensure that resources and capabilities are available to also finance the energy transition", IEA said. Plans to cut the share of nuclear power while also reducing greenhouse gas emissions by 40% in 2030, "will require significant investments in energy efficiency and new low-carbon generation”, the report noted.
"France has to implement nothing less than a transformation of its energy system and power market," Paul Simons, IEA deputy executive director, said at the launch of the report in Paris. "France's Transition Act is a first-class energy and climate framework, based on a low-carbon strategy, carbon budgets, and the related investment planning. France leads on carbon pricing with a long-term carbon price trajectory set by law up to 2030."
The IEA report highlights five avenues to accelerate the energy transition and guide energy investment: it encourages the government to track progress along robust scenarios, to continue with clear and long-term carbon pricing instruments, to take timely decisions on the safe and long-term operation of the nuclear reactors, to further reduce barriers to renewable deployment, and to strengthen efforts towards market opening, competition and consumer choice.
The IEA shows that deployment of renewable energy in France is still below the IEA average. While solar and biomass are developing well, further government action could help improve siting, permitting, acceptance and grid connection of wind power. Despite recent reforms, price signals from the electricity and carbon markets are weak and technical and market barriers remain for further renewable deployment.
The IEA acknowledges France's progress in gas market reforms, with higher trade and regional integration. But despite reforms of the electricity market, including dropping regulated tariffs for large and mid-sized consumers, and ensuring competitive regulated access to the nuclear fleet, France's electricity sector has only a few large players. The government has decided to encourage demand response, to launch capacity mechanism and set investment targets under the multi-annual energy planning (PPE). However, when implementing these significant measures, the government needs to remain vigilant of competition and electricity supply security, notably during times when winter peak demand coincides with low nuclear availability.