France has Europe's second highest energy consumption after Germany. The country is the world's second-largest producer of nuclear power after the United States and has a higher proportion of nuclear power in its power supply (72 per cent) than any other country in the world.
President Emmanuel Macron declared in 2018 that the country would reduce the nuclear share of the power supply to 50 per cent by 2035 and shut down 14 of its 58 nuclear reactors by 2035. The country will also shut down its four remaining coal power plants by 2022. Macron's commitments are based on the PPE (Programmation pluriannuelle de l'énergie), the Government's multi-year governance programme for energy policy.
All French nuclear power plants are owned and operated by EDF (Électricité de France), in which the French state owns 83.7 per cent of the shares (2018).
France is the world's second-largest producer of nuclear power. Pictured is the Cruas Nuclear Power Station located next to the Rhône River in Cruas and Meysse communes in the department of Ardèche. (Photo: Shutterstock)
Hydropower is the second-largest power source in France. EDF holds 80 per cent of the hydropower licences in the country, while the French multinational energy company Engie holds 15 per cent. France is in tenth place worldwide in installed hydropower capacity, totalling 26 GW in 2018.
France's annual hydropower production is about 60 TWH, just over half of Norway's production. The French hydropower market is going to change, as state-owned licences will be tendered on the open market after 75 years. One fifth of installed capacity will already be tendered by 2020 and even more by 2030.
Statkraft established an office in Lyon, France in 2009, where 10 employees work today. Statkraft has ambitious plans, and the initial goal is to acquire a licence for hydropower production.
"We're still in a phase where we're developing business opportunities. The oldest licences expired ten years ago, and that was why Statkraft wanted to establish itself in France at that time. However, the French state has extended EDF's licences one year at a time. Consequently, we're continuing our work on preparing the best possible offer for the day it becomes possible to submit offers for a licence," says Arnaud Bellanger, Statkraft's country manager in France and head of Hydropower France.
He emphasises that an offer is not just about price; it will be evaluated on three important criteria:
- Price: That Statkraft proposed the best fee (based on the realised annual turnover) for the licence.
- Electricity output growth: That Statkraft can guarantee an increase in energy production based on a contractual investment plan.
- Stakeholders: The French State expects the candidates submitting offers to take into account the requirements from several stakeholders – fishermen, environmental NGOs, tourist associations, farmers, local elected officials and inhabitants living near the concession.
"Ten years ago, several companies established teams in France to submit offers for hydropower licences. Today, for all practical purposes, Statkraft is the only one remaining with a clear and sound business organisation. We're constantly meeting with politicians and various stakeholders – we build relationships and explain who Statkraft is and why we are good for France," says Bellanger.
Along the Loire-Ardèche river system, EDF operates a total of 30 dams and 27 power stations, supplying half a million households with electricity. One of the the hydropower plants on the river Loire, which is France's longest river, is Grangent in Saint-Etienne. The concrete arch dam was completed in 1957. (Photo: Shutterstock)
France has no plans to completely phase out nuclear power, such as in neighbouring Germany, Belgium and Switzerland.
"France sees hydropower as a supplement to nuclear power – hydropower is important because it's so flexible. Therefore, the state will only issue licences to companies that have solid financial and technical capacity, and that's exactly what Statkraft can offer," says Bellanger.
France is subject to strict EU climate targets, and the PPE states that the country will triple the production of onshore wind power and produce five times the amount of solar energy by 2030 and develop offshore wind to a more modest degree.
"France has set ambitious targets for increasing its production of renewable power. There are major plans to significantly increase renewable production in the future, especially within solar power," Bellanger says.
France aims to reduce greenhouse gas emissions by 40 per cent by 2030, compared with 1990 levels.
Increased fuel prices for petrol and diesel was one of the French government's climate measures. This triggered massive protests by the 'yellow vest' grassroots movement. While President Macron argues that increased fuel taxes are necessary for France to reach its climate goals, the yellow vests protest against what they believe is an unfair policy that has an unequal impact on different groups. At the same time, the French government is being sued by four environmental organisations that claim France is failing to meet its obligations under the Paris Agreement.
Brings sun and wind to the market
In addition to preparing offers for hydropower licences, Statkraft's France office offers market access solutions to renewable energy developers and investors. In 2017, Statkraft signed what is known as a power purchase agreement (PPA) with Groupe Valeco, a leading developer of wind and solar power in France. Three new PPAs were signed with the same company in 2019.
"The development of renewable energy sources is part of Statkraft's global strategy, and France is part of that effort. We've created a complete service offering for wind and solar power developers to help them bring their electricity to the market. Our goal is to become a leading company in this area in France," says Arnaud Bellanger.
Developing wind and solar portfolio
As part of Statkraft's ambitious international strategy for renewables, Statkraft France plans to develop wind and solar projects through pan-European or French acquisitions of development companies and planned projects, through project acquisition or through co-development of power plants.
On the top of these current activities, the new business areas of Statkraft can also become new businesses in France (EV charging, Hydrogen).
"With all our expertise areas, we can definitely play an active role in the energy transition in France" concludes Arnaud Bellanger.
France has set ambitious targets for increasing its production of renewable power. (Photo: Shutterstock)