IEA to France: Increase Electricity Prices and Competition

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On Monday the International Energy Agency (IEA) released its latest country report on France. These reports are generally issued every five years.

Although France has not been immune to the global economic downturn, the climate change plan known as the Grenelle de l’Environnement is still considered by the IEA as having “many positive provisions”.

Indeed, the government is willing to cut by a factor of four the country’s carbon dioxide emissions by 2050 (compared to 1990 levels). To do so, important efforts will be dedicated to the building and transportation sectors, which account for a large share of greenhouse gases emissions in France.

It is estimated that 20 million homes will have to be retrofitted and insulated within the next four decades.

Thanks to nuclear power, France has one of the lowest per capita emissions amongst developed nations. According to recent research, France has lower per capita emissions than China . The IEA remarks, however, that the government must ensure that waste must be addressed in a sustainable fashion.

The IEA has identified two key issues which must be improved upon:

First, the utility sector, even if in line with European directives, suffers from a lack of competition.

The former national utility, Electricité de France (EDF), controls the lion’s share of the 56 nuclear reactors operating in the country and thus has lower production costs than its competitors. In 2006, the price for 100 kW-h was 12.05 € while the EU average was of 14.16 €. The OECD energy watchdog calls for increased competition and this would increase prices.

The heavily regulated EDF prices do not adequately reflect actual costs as the government subsidizes a portion of the nuclear reactors.

This might change with a law adopted on June 15 by the local Senate which would give to EDF’s competitors a share of its nuclear electricity. (see Le Figaro [Fr] for more)

Second, the French electricity grid lacks peak load capacity. Nuclear reactors can provide baseload capacity but can’t answer to higher demand. Investment in renewables and smart grids would be great solutions for this.

Throughout the year, France exports electricity to its neighbors. In 2003, it exported no less than 94 TW-h, but is nonetheless an importer of electricity in the winter to heat buildings. (The country developed massive electrical heaters to use the electricity generated by nuclear power).

Heat pumps might be a solution as they use up to five times less electricity than traditional solutions.

Overall, the French government is happy with the IEA findings. It is worth noting that in its official press release, in addition to having low overall CO2 emissions, the country is ranked second amongst European countries in terms of renewable electricity production.

The IEA also noted that France has a coherent and efficient policy as the Ministry in charge of climate change is also in charge of energy, transports and urbanism. This might be an idea for other countries.

The Minister in charge of these issues, Mr. Jean-Louis Borloo, called with his German and British colleagues for more action and believes the European Union must cut its emissions by 30 percent by 2020.

photo: Calips96

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About Author

Fascinated by sustainability and cleantech since 2004, Edouard wrote both his Bachelor of Arts' dissertation and Master's thesis on sustainable energy topics. He haven't stopped writing on these subjects ever since. A French Master's graduate in international management, Edouard has had several experiences in Marketing and Communications in Europe. He worked for firms as diverse as a German water treatment company, a leading French business school and lately a Belgian automation specialist. He is currently for hire globally. Since 2007 Edouard has been selecting for his own blog the latest headlines and best researches on sustainable development, climate change, cleantech and the world energy sector. With over 1,600 published articles, he is read all over the world. On Cleantechies, Edouard has been proposing since June 2009 news articles and opinion pieces on on French and European policies. Don't hesitate to contact him as he is always interested in discussing with new people.

3 Comments

  1. Pingback: IEA to France: increase electricity prices and competition :: Sustainable development and much more

  2. Just spent a month outside a major city in France. Nice apartment, very nice patio area. But very hot and no air conditioner of any sort and none in the neighborhood. Had a plumbing problem – the sewer line was near sidewalk depth. It overflowed over the sidewalk one foot away from the open air back door of the bakery next door. No problem, evidently. We bought at the bakery every day as did everyone else. I eventually snaked the sewer blockage (took one minute, once I figured it out and found a snake in the garage, but I was quoted $700 to fix it by a “plumber” who showed up as part of a scam, I think. I know the city is old and difficult to upgrade, but I can’t remember a place in all of the U.S. where I’ve seen worse plumbing conditions. I’m just saying I wouldn’t brag about France’s utilities. Absolutely no sense of health regulations – room temp food everywhere. In a month, I saw very little work ethic – lazy servers, crazy selfish drivers with no regards to safety on very narrow streets. It’s very, very pretty, but not customer friendly. I’ve been there several times – it’s always the same. I’m surprised thousands don’t die of food poisoning. This is not the place to hold itself up as a model for energy for the world; there’s more to it than that. But I love the place; it’s a great backdrop for photos, just don’t look too closely.

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