European perspectives

Beyond the COP: the state of affairs of the French energy transition

2015 could be described as something of an "energy and climate policy marathon" in the case of France. As a first stage, after several years of intense political debates, France adopted its first-ever national energy transition law in August 2015, supposedly illustrating the French exemplarity as a leader in the transition towards a sustainable economy. Later in December, Paris hosted the 21st international climate conference of the parties (COP 21), which carried over the heavy burden of defining an ambitious international agreement to fight global climate change for the post-2020 period. Both challenges have been met with some success in providing a new impetus and defining key milestones for future national and global action.

by Kathrin Glastra, Heinrich Boell Foundation Brussels and Andreas Rüdinger, IDDRI

Considering in particular the energy transition law, the French transition plan might very well be one of the most ambitious across Europe, including all the key ingredients and objectives of a coherent climate road-map. However, its implementation will prove to be increasingly difficult, with timing becoming one of the greater challenges. Indeed, after the great focus on energy and climate in the second half of 2015, many observers fear that both political attention and willingness to commit to strong policy measures might progressively decline before entering a standstill with the upcoming 2017 presidential and parliamentary elections. Six months after the COP 21, where does France stand in the implementation of its own energy transition strategy?

Three main challenges can be outlined in this regard: the effective implementation of energy efficiency measures, initially coined as the “cornerstone of the French energy transition strategy”; the measures intended at reducing the consumption of fossil fuels, in the transport sector in particular; and most importantly, the adoption of a clear trajectory outlining the evolution of the energy mix until 2030, providing a coherent picture of how the different objectives should be achieved over time.

Even though it does not receive as much attention, the objective to reduce the final energy consumption by 50% between 2012 and 2050 stands out as the most ambitious objective of the French law. However, the current measures fall short of living up to this ambition. The French government recently announced the publication of several regulations by mid-2016 which might act as positive signals. Nonetheless, the existing support schemes (tax credits and eco-loans for efficiency) have not yet been reformed or reinforced at all, neither has a large-scale financing instrument for building retrofits been set up, which is rather astonishing, given the very strong ambitions. All in all, the current path seems more to be one of small incremental changes rather than a real upheaval to enshrine the “efficiency first” principle. The same applies to the fight against energy poverty: while most experts agree that this can only be achieved through structural measures (i.e. decreasing energy consumption through more efficient homes and appliances), the only new measure concerns the implementation of an “eco-check”, a 150 EUR aid to help modest-income households to pay their energy bills.

Regarding the issue of reducing fossil-fuel consumption by 30% until 2030, very few signals currently indicate a divergence from the status quo. Incentives to favor soft mobility and public transportation merely consist of a (meager) subsidy for commuters using their bicycles. And most regrettably, the French government did not seize the opportunity of record-low oil prices to adjust the increase of its carbon tax, which might have provided a significant source of funding for energy transition projects.

As a third item, the publication of the new multi-annual planning framework for energy (planification pluriannuelle de l’énergie, PPE) might possibly be considered the single most important issue with regards to the future implementation of the French energy transition. Unlike previous planning instruments, which treated all sectors (renewables, electricity, natural gas, transports, etc.) independently, the intention behind the PPE was to merge them into a coherent trajectory achieving the multiple 2030 objectives. Initially expected before the end of 2015, the PPE has recently been postponed to mid-2016. More importantly, it might eventually fail to shed light on the one issue which still seems to block a real transition in the French power sector: clarifying the future of nuclear power and the implementation of the target to reduce its share from 75% to 50% by 2025. Rather than providing any clear signals on the future evolution of the electricity mix as a whole, the government has chosen a two-fold approach to (partly) satisfy the renewables industry while avoiding the conflicting issue of possible nuclear shut-downs. On one hand, a decree published in April 2016 provides intermediary objectives for the development of renewable energies, indicating (legally not binding) target values of:

  • 10 GW of installed solar capacities by 2018 (2015: 6.5 GW) and 18 to 20 GW by 2023
  • 15 GW of installed wind capacities by 2018 (2015: 10 GW) and 22 to 26 GW by 2023

On the other hand, the government has stated that no decisions on the possible shut-down or lifetime extension of nuclear reactors (except the case of the oldest nuclear plant in Fessenheim, supposed to shut down by the end of 2017) will be taken before the end of 2018, effectively dismissing any responsibility in the short term. This absence of policy signals presents a series of risks:

  • Considering the current level of production, reaching a 50% share of nuclear power corresponds to the shut-down of approximately 25 reactors by 2025. If this has to happen after 2020, it would represent an average of five reactors per year, with an equivalent need for an upsurge in power savings and renewables.
  • Without any clear signal and trajectory by the government, the French electricity operator EDF could very well choose to carry out the investments required to extend the lifetime of the power plants before the government defines its trajectory. It is already difficult to shut down a power plant which is at the end of its lifetime; but it is much harder to shut down a nuclear plant which just benefited of a one-billion EUR retrofit.
  • France is the biggest exporter on the European power market which already suffers from significant over-capacity and depressed prices (25 €/MWh on average in April 2016). In this context, reinvesting in both nuclear power and renewable capacities will necessarily produce a vast amount of stranded assets, since these plants will never recover their costs.

While this short summary gives a rather critical appraisal of the current state of affairs, it is worth outlining what is at stake. Indeed, the timely adoption of a coherent road-map and key measures to trigger the transition effort is not only a question of achieving the French policy objectives in the first place. It is most and foremost the political legacy of the current government in the field of climate change which is at risk. Indeed, the French energy transition might soon be challenged by another transition of political nature. In the event of a political changeover and right-wing government, it is most likely that the current law would be watered down and purged of many of its key objectives. The only way to avoid this is to become a “leader by example” and to advance as much as possible in the implementation on the ground, so that society as a whole takes ownership of this new vision.