Energía

Cibles pour le prochain plan énergétique pluriannuel dévoilées

Posted on:2 January 2024

Consultation is launched

On November 22, Agnès Pannier-Runacher, France’s Minister for Energy Transition, launched a public consultation on a document setting out the main directions of the country’s energy policy, as part of the work on the French Energy-Climate Strategy. The consultation was open until December 22, 2023.

The French Energy-Climate Strategy aims to achieve carbon neutrality by 2050. It is based on four pillars: energy sobriety, energy efficiency, the revival of nuclear power and the acceleration of renewable energies.

This consultation is part of a process that will culminate over the coming months in a decree setting out the Pluriannual Energy Program (PPE), the main strategic document for steering France’s energy transition.

I want to talk to an expert about carbon neutrality

Be the first major industrial country to move away from fossil fuels

This is the commitment announced by the government. It meets three major challenges for France. The first concerns energy sovereignty. The war in Ukraine has shown that France is highly vulnerable to geopolitical events. Tensions are also appearing over the raw materials and equipment needed for the energy transition. Improving energy independence depends on abandoning imported fossil fuels, diversifying raw material supplies and developing an equipment industry for the energy transition.

109 billion euros

La facture d’importation de combustibles fossiles passera de 48 milliards d’euros en 2021 à 2022

Source: SDES, Energy balance sheet

The second issue is economic. France’s balance of trade has been undermined by last year’s surge in energy prices. Fossil fuel import bills soared. Increased use of nuclear power and renewable energies should improve the country’s competitiveness.

The final challenge concerns the fight against climate change. The government wants to accelerate the decarbonization of all sectors: transport, industry, construction, agriculture, and energy.

Being the first major industrial country to move away from fossil fuels implies profound changes, as illustrated by the graph below.

Consommation finale d’énergie 2021 et projections jusqu’en 2050

Source: RTE, SDES, DGEC

Energy consumption is expected to decrease by up to 50% by 2050. The electrification of transport and heating systems in particular, thanks to improved efficiency, will play a significant role. Energy sobriety will need to complement this effort, with its expected contribution ranging between 15% and 20%.

51%

The share of fossil fuels in the final energy consumption of industry in 2021

Source: SDES, Energy balance sheet

The transition away from fossil fuels is inevitable. While they currently represent just under 60% of final energy consumption (37% oil and 21% natural gas), we will need to eliminate their use by 2050. Although the decarbonization of the electricity generation mix is already in progress, the same cannot be said for the transportation sector. Moving away from energy sources used for heating buildings and industries also poses a significant challenge.

The final hurdle in reshaping the energy mix lies in scaling up the production of decarbonized energy: nuclear power, renewable electricity, renewable heating and cooling, biogas, biofuels, etc. It is projected that electricity production will need to increase by 10% by 2030 and 55% by 2050.

This transition towards 2050 necessitates setting intermediate goals to chart a course. This is where the Multiannual Energy Programme comes in, outlining five objectives detailed in the consultation document.

I want to reduce my energy consumption over the long term.

Objective 1: reduce energy consumption while reindustrializing the country

50 TWh

More end-energy consumption due to reindustrialization in 2030

Source: French Ministry of Energy Transition

The final energy consumption has been decreasing for about ten years. The goal is to speed up the pace of this decrease. For 2030, the PPE has set a target of 1,209 TWh for total energy consumption across all sectors, representing a 25% reduction from 2021. This projection includes a reindustrialization process in France, which will lead to an increase in energy consumption in the industrial sector, especially for electricity. In conjunction with reindustrialization efforts (such as the “green industry” law and the France 2030 program), the Multi-Year Energy Plan calls for an enhancement of the industrial sector’s energy efficiency, relying in particular on the continuation of the work carried out by the strategic sector committees (currently 19 accredited). The multi-annual energy plan also includes an increase in obligations under the energy-saving certificate scheme.

Objective 2: adapt networks, especially to meet industrial requirements

The increasing electrification of energy usage, the growth of renewable electricity production, and the reindustrialization of the sector all necessitate the modernization of power grids. The investment needs for the upcoming years are substantial. RTE, the French electricity transmission system operator, is currently revising its investment plan. The previous assessment, conducted in 2019, estimated the necessary investment between now and 2035 at 33 billion euros. Enedis, the distribution network operator, anticipates a 25% increase in annual investments, reaching 5 billion euros per year by 2032.

The Multi-Year Energy Plan calls for enhanced planning of connections in the most dynamic industrial zones and port areas. It also aims to bolster the national industrial sector for electrical materials and equipment related to networks.

The situation concerning natural gas networks is quite different. Natural gas consumption is expected to decrease significantly, aligning with the objective of carbon neutrality by 2050. The challenge for gas network operators is to adjust their infrastructures to the decline in consumption while incorporating biomethane and hydrogen. The costs of adapting networks for green gas are projected to range between 6 and 9.7 billion euros by 2050.

Objective 3: guarantee security of supply

For fossil fuels and natural gas in particular, the challenges lie in diversifying supplies to reduce our exposure to geopolitical events, and in producing decarbonated substitutes (sustainable fuels, biomethane, etc.).

In the case of electricity, security of supply must be ensured not only by ramping up production, but also by developing flexibility to balance supply and demand during periods of peak consumption. Among the measures envisaged on the electricity supply side by the next multi-annual energy program are the development of interconnections, support for the deployment of batteries and the launch of calls for tenders for pumped-storage energy transfer stations (STEP). Demand-side measures are also planned. In particular, the government intends to introduce incentives or regulatory constraints for the control of certain equipment (charging stations and heating systems, for example). Electricity prices should also provide consumers with greater incentives to modulate their consumption during peak periods. Finally, new incentive mechanisms should be introduced to take full advantage of the potential of both diffuse and industrial load shedding.

Objective 4: preserve purchasing power and competitiveness

This objective is divided into two parts: one for households and the other for businesses. In the case of households, the measures focus on support for energy renovation and assistance for people in need. In terms of competitiveness, the next multi-year program aims to bring the electricity market reform project to a successful conclusion. Electricity prices paid by end consumers, particularly industrial consumers, must better reflect the production costs of nuclear power. This is the key issue at stake in the work currently being carried out in parallel with the next multi-annual energy program, concerning the system that will take over from ARENH from 2026 onwards. The government recently suggested an average selling price for nuclear electricity of around €70/MWh, compared with the ARENH price of €42/MWh.

Finally, the 5th objective is the development of decarbonized energy production, a major component of the next PPE. This will be the subject of our next article.

I would like more information