Nuclear power remains the first choice for the French power industry but there are challenges on the horizon. A stiffly sceptical stance during the election amongst Mr Hollande has softened but still presents downsides for the industry and especially so for the state controlled EdF. Additionally, Mr Hollande‘s victory may also mean changes within the management of EdF, most notably in the case of Mr. Proglio (Chairman) who was an open supporter of Mr. Sarkozy. On a more favourable tone, interest in renewables remains strong.
There have been positive developments in the French wind sector in recent months. A consortium led by EdF, and including turbine-maker Alstom, has won three of the five development zones up for grabs in France’s first offshore wind tender. In addition, Nicole Bricq, Minister of Ecology, Energy, and Sustainable Development, expressed her support for wind
power and promised she would ensure that new wind turbines projects proceed.
The publication of the Nuclear Safety Authority (ASN)’s review of France’s nuclear power plants in January 2012 has brought mixed news for the sector. While the ASN confirms that no nuclear plants need to be decommissioned for safety reasons, it does make a series of recommendations to improve the security of nuclear plants in France, which will cost around EUR10bn to implement.
GDF Suez, through its subsidiary Eole Generation, has announced it will install and operate tidal stream devices at Raz Blanchard in Lower Normandy and the Passage du Fromveur off the Finistère coast in Brittany. These will be operational from 2015 and the firm aims to become a leading player in French marine energy.
French Electricity Production
Energy in France in the main involves the production of electricity and fuel for homes and transport needs. Traditionally the needs of electricity generation was served by the French coal industry making use of coal mainly from the French coal fields of Alsace and Lorraine. However growing environmental awareness and increasing costs of French coal compared to highly subsidised coal from developing nations menat that since the 1960s France has phased out it reliance on coal with the last coal mine closing in 2004
Unlike the United Kingdom or Norway, France has no oil reserves of its own. therefore a policy of building nuclear power stations was started in the 1950s and accelerated over the next half century, so that over 75% of Frances electricity production is provided by nuclear power. This makes France the worlds biggest producer of electricity from nuclear power. France is even an exporter of electricity with 18% of production supplying Belgium, the Netherlands and the UK.
Following the 1973 oil crisis France found itself dependent upon imported crude oil. This dependence spurred France to develop its own energy security through the use of nuclear power to provide low cost, CO2 neutral electricity. Following the Fukushima nuclear accident in Japan in 2010, there are calls in France to move away from nuclear power.
Nuclear power is not the only source of electricity in France, but it is still substantially the biggest. Hydroelectric, solar and wind generation provide a much smaller supply. Wind generation though visible in many parts of France is much smaller than in Belgium or Germany.
During the period 2011-2021, French overall power generation is expected to increase by an annual average of 1.01%, reaching 601.90TWh. Driving this growth is an annual 1.56% gain in gas-fired generation, an increase of 1.21% in nuclear power and a 4.42% rise in renewables-based electricity supply. Coal-fired generation looks set to fall steadily during the forecast period, reflecting moves towards a greener and cleaner supply slate. With a likely reduction in oil-fired power, natural gas will be the thermal source of choice for France, particularly in combined cycle projects.
In mid-2008, Spanish firm Iberdrola announced plans to construct a gas-fired combined cycle power station in Villiers-Charlemagne in north west France; the investment was estimated to stand at EUR500mn and the power station was planned to begin operations in 2013. In 2010, Iberdrola announced the project would be delayed – citing the uncertain economic climate as one motive – and by early 2012, regional press claimed that plans to build the power station had been abandoned altogether. In December 2011, EdF and General Electric’s GE Energy unit also announced that they had signed an agreement to jointly develop a gas-fired power plant in Bouchain, France. The 510MW combined cycle plant is planned to begin operations in 2015. In June 2010, Norwegian oil and gas producer Statoil and French power provider Poweo signed a 20-year agreement for the supply of gas to Poweo’s projected 400MW Combined Cycle Gas Turbine (CCGT) power plant in Toul. Deliveries are planned to start in October 2012. Poweo already operates a 412MW CCGT in Pont-sur-Sambre. It plans to develop other CCGT projects totalling more than 1.6GW.
France has 58 nuclear reactors operated by EdF, with total capacity of over 63GW, supplying 410TWh per annum of electricity, or three-quarters of total power. The French Nuclear Policy Council has launched a long-awaited overhaul of the country’s nuclear industry in the attempt to end internal disagreements and rivalries between the state-controlled utilities and technology companies. All major French power companies have been invited to cooperate, especially with regard to the development of a medium-sized power reactor, which could expand France’s nuclear export offerings. Although it reconfirmed the leading role of EdF as the prime contractor for nuclear-export projects, the council has indeed called on Areva, EdF and GdF-Suez to strengthen their collaboration in the development of the new mid-sized reactor – the Atmea-1. This reactor will be marketed primarily to countries embarking upon nuclear power programmes developed under a joint venture (JV) – established in 2006 – by Areva and Mitsubishi Heavy Industries.
In its review of the safety of France’s nuclear power station – undertaken following the nuclear power station accident at Fukushima, Japan – published by France’s Nuclear Safety Authority in January 2012, the authorities call for tighter controls on safety at nuclear reactors, in case an accident should occur. The review also calls for nuclear power operators to show how emergency back-up reactors would work, and for the creation of a nuclear task force, available in case of emergency. Operators have until mid-2012 to respond. While the industry will welcome the fact that the safety authority did not recommend that any existing nuclear power plants be shut down, there are concerns over the costs of safety improvements: EdF will have to invest up to EUR10bn. France has plans to further expand its substantial nuclear power industry. A report released by the government in November 2003 called for growth, including the construction of a third-generation of nuclear reactors and the upgrading of existing plants. In 2005, a law established guidelines for energy policy and security. The role of nuclear power is central to this, along with specific decisions concerning the European Pressurised Water Reactor (EPR); one of the most notable decisions is whether to build an initial unit. This would enable the government to decide by 2015 whether it should build an additional 40 units.
EdF’s July 2011 announcement that it will delay its Flamanville third generation EPR reactor by another two years – this time due to newly-introduced safety regulations – deals another blow to the beleaguered project. The new safety instructions will also prompt a cost increase; it is now thought that the project could cost as much as EUR6bn (US$9bn), from an original estimate of EUR3.3bn.
Wind Generation and future developments
European utilities are currently battling to secure parts of the French government’s EUR10bn (US$12.8bn) project to install 25,000MW of wind capacity by 2020. In 2011, France – which currently has no offshore wind power – launched what is now one of the biggest developments of its kind in Europe. The preliminary contracts encompass the construction of 600 wind turbines in five zones off the coast of Normandy and Brittany, with a combined capacity of 3,000MW. Winning bids will be preselected in April 2012, with a final decision in 2013, once the companies have confirmed their modes of financing. The wind farms are then scheduled to become operational between 2015 and 2020.
Three industrial consortia, led by Spain’s Iberdrola and France’s EdF and GdF-Suez, all submitted their bids on January 10 2012. Furthermore, Siemens – a German turbine manufacturer – is part of GdF’s bid, while EdF and Iberdrola have teamed up with French suppliers Alstom and Areva. On land, in January 2012, GdF-Suez – in collaboration with Compagnie Nationale de Rhone – inaugurated a 12MW wind farm in Guerville. This latest plant takes GdF Suez’s operational wind power total in France to over 1,000MW; the French government has set a target of raising France’s installed wind capacity to 6,000MW by 2020. In other wind power developments, in December 2011, German wind turbine manufacturer Nordex announced that its French business unit had sold four wind farms with a total capacity of 47.5MW to Allianz and BNP Paribas. Nordex has also sold four 2.5MW turbines to BOREAS, a wind farm developer, for a project in eastern France. The financial terms of both deals were not disclosed. Indian wind turbine manufacturer Suzlon Energy’s subsidiary REpower Systems revealed in November 2011 that it had signed a turnkey contract to deliver and install six REpower MM92 wind turbines for the La Chaude Vallée power plant in Northern France. REpower also has a construction contract for the plant’s infrastructure and equipment.
France is working to develop its solar power sector through a number of proposals including new incentives and a number of projects. According to Renewable Energy World, in November 2008, the French government announced plans to double the amount of power generated by renewables by 2020, equivalent to 23% of energy coming from renewables. A large part of this is to come from solar power, with plans to raise capacity to 5.4GW by 2020. The country is hoping to become a leader in solar power, a position currently held by Germany. Solar photovoltaic electricity could, in the right circumstances, be competitive with grid electricity in Italy by 2013 and in France, Germany, Spain and the UK by 2020, according to a report published in September 2011 by the European Photovoltaic Industry Association (EPIA). The report said that dynamic grid parity – the point at which the value of the long-term electricity revenues from a PV installation equals the long-term cost of traditionally produced grid power – could happen by 2013 in the commercial sector in Italy and then spread across Europe by 2020. System prices for solar PV are falling, the EPIA report said, citing a 50% price decrease in Europe over the last five years. System prices are expected to decrease in the next 10 years by 36-51%, it added.
Different levels of sun across the north and south of Europe mean that competitiveness will not happen at the same time everywhere in Europe. According to EPIA data, Italy had a total solar PV capacity of 2.3GW in 2010; France had 0.7GW, Germany 7.4GW, Spain 0.37GW and the UK 0.45GW. Spain’s Solarig completed the installation of a 5.35MW PV plant in Bonnat, in central France, in January 2012 – having only received approval for the plant’s installation in September 2011. Costing EUR15mn, EdF will purchase the electricity produced at a rate of EUR0.346/kWh. In other solar energy developments, in January 2012 the European investment fund the Marguerite Fund purchased 36MW stake – nearly a third of total capacity – in a 115MW solar project under development in Toul-Rosières, in north-east France, being developed by EdF Energies Nouvelles. The developers expect the plant to become operational in Q312. SunPower, a US solar-power components manufacturer, announced in December 2011 that it plans to acquire French solar provider Tenesor for US$165.4mn. Earlier in 2011, Total acquired a 60% share in SunPower. In January 2012, Vattenfall, ArcelorMittal, Rhodia and SNCF announced that they have formed a joint venture company, Force Hydro, in a bid to participate in a tender for hydropower concessions in France. The tender to develop 5.3GW of new hydroelectric generation capacity is scheduled to be issued by the government in 2012, with Force Hydro aiming to secure concessions for 2GW of new capacity.
- Business Monitor International