UK-based analyst firm Aurora Energy Research projects a €45 billion investment opportunity for the French renewable energy market. The French government will present its plan (Programmations Plurianuelles de l'Energie) to lower its dependency on nuclear energy from 75% to 50% by 2025, while at the same time meeting Paris Agreement compliant emission reductions targets.
Reportedly, reducing the country’s emissions while taking nuclear capacity offline would require a 70% increase in renewable generation capacity by 2030. Aurora stipulates that an additional €10 billion of government subsidies would be needed up to 2030 to unlock the €45 billion investment.
Under considerable media attention, former environment and energy minister and TV star Nicolas Hulot left the government in August, citing disappointment over Macron’s inability to push through with plans to reduce dependency on nuclear power against strong lobbying. In early October the French parliament voted to cut nuclear generation capacity over the coming years from 75% to 50%. The bill also includes a goal to increase the share of renewable energies in the country’s electricity generation to 23% by 2020 and 32% by 2030.
Moreover, French MPs decided to reduce the country’s 2012 levels of energy consumption by 20% by 2030 and halve it by 2050. French lawmakers also voted to reduce greenhouse gas emissions by 40% compared to the 1990 level in 2030 and by 75% in 2050.
Weijie Mak, Aurora’s Lead Associate on the French power market, assumes that the investment opportunities will see the entry of subsidy-free solar and onshore wind assets by 2030 in France. Moreover, rising gas and oil prices would preclude a 20% price hike in electricity tariffs, despite modest growth in consumption. This would be accompanied by price volatility resulting from the inherent variability of wind and solar generation assets.
This new market situation would, however, work to the benefit of building economic cases for storage projects. Aurora states that its analysis indicates that French storage market will grow to 5 GW by 2030.
Aurora’s Mak added, “France is currently at the forefront of decarbonization efforts relative to its neighbors, boasting one of the lowest emission levels and prices in the power sector in the EU. This is set to change in the next decade as neighboring countries continue to place greater emphasis on their climate change objectives. Aggressive decarbonization efforts by Great Britain, Spain, and Germany in particular could lower the market value for French domestic power by €5 billion (or 15%) in 2030, through a combination of lower exports and wholesale prices”.
Last week, the European Commission approved a new incentive scheme for self-consumption from distributed renewable resources for France. The plan comprises €200 million from the French State budget, for the support of the deployment of 490 MW of additional generation capacity.
Newly installed PV capacity in France in the first half of this year reached 479 MW, according to the latest statistics released by the Ministry for an Ecological and Inclusive Transition (MTES). Of this, around 228 MW were deployed in the second quarter of 2018, while Q1 saw roughly 251 MW installed. This compares to 214 MW in the second quarter of 2017, and 87 MW in the first quarter.