{"id":32122,"date":"2019-04-23T17:18:23","date_gmt":"2019-04-23T15:18:23","guid":{"rendered":"https:\/\/bmhavocats.com\/2019\/04\/23\/energy-the-ups-and-downs-of-french-energy-policy\/"},"modified":"2026-06-30T12:39:37","modified_gmt":"2026-06-30T10:39:37","slug":"energy-the-ups-and-downs-of-french-energy-policy","status":"publish","type":"post","link":"https:\/\/bmhavocats.com\/en\/2019\/04\/23\/energy-the-ups-and-downs-of-french-energy-policy\/","title":{"rendered":"[ENERGY] The Ups and Downs of French Energy Policy"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row type=&#8221;vc_default&#8221;][vc_column][vc_video link=&#8221;https:\/\/youtu.be\/0PkeqfwPqZg&#8221; el_width=&#8221;50&#8243; align=&#8221;center&#8221;][vc_column_text]<\/p>\n<p style=\"text-align: justify;\">The \u201cYellow Vests\u201d protests\u2014which were initially sparked by an increase in environmental taxes on fuel prices\u2014and the more recent Climate Movement protests have brought environmental and energy issues to the forefront. A few weeks before the protests and marches began, the French government released the broad guidelines of <em>the \u201cMulti-Year Energy Plan\u201d ( <\/em><em>\u201cPPE\u201d<\/em>) for the years 2019 through 2028. A draft \u201cPPE Decree\u201d was released to the public a few weeks ago. It details these broad guidelines for French energy policy for the next ten years and beyond. This summary presents some key elements of the \u201cPPE\u201d regarding renewable energy and nuclear power.    <\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #ffffff;\">&#8211;<\/span><\/p>\n<h4 style=\"text-align: justify;\"><span style=\"color: #000080;\"><strong>\u201cPPE\u201d: \u201cBe confident!\u201d<\/strong><\/span><\/h4>\n<p style=\"text-align: justify;\">The PPE is defined in its current form by <a href=\"https:\/\/www.legifrance.gouv.fr\/affichCode.do;jsessionid=BFE24B7E01A843EE9475D3C8DEF313B5.tplgfr26s_1?idSectionTA=LEGISCTA000031069405&#038;cidTexte=LEGITEXT000023983208&#038;dateTexte=20190805\">Articles L. 141-1 et seq. of the Energy Code<\/a>, as last amended by Law No. <a href=\"https:\/\/www.legifrance.gouv.fr\/affichTexte.do?cidTexte=JORFTEXT000031044385&#038;categorieLien=id\">2015-992<\/a> of August 17 <em>, <\/em> 2015 <em>, <\/em><em>\u201con the energy transition for green growth.\u201d<\/em> The purpose of the \u201cPPE\u201d is to establish guidelines and define priorities for action by French authorities across all energy sources within French territory, in order to achieve the objectives of French energy policy set forth in Articles <a href=\"https:\/\/www.legifrance.gouv.fr\/affichCodeArticle.do?cidTexte=LEGITEXT000023983208&#038;idArticle=LEGIARTI000023985176&#038;dateTexte=&#038;categorieLien=cid\">L. 100-1<\/a>, <a href=\"https:\/\/www.legifrance.gouv.fr\/affichCodeArticle.do;jsessionid=BFE24B7E01A843EE9475D3C8DEF313B5.tplgfr26s_1?idArticle=LEGIARTI000031063179&#038;cidTexte=LEGITEXT000023983208&#038;dateTexte=20190805&#038;categorieLien=id&#038;oldAction=&#038;nbResultRech=\">L. 100-2<\/a>, and <a href=\"https:\/\/www.legifrance.gouv.fr\/affichCodeArticle.do;jsessionid=BFE24B7E01A843EE9475D3C8DEF313B5.tplgfr26s_1?idArticle=LEGIARTI000031063168&#038;cidTexte=LEGITEXT000023983208&#038;dateTexte=20190805&#038;categorieLien=id&#038;oldAction=&#038;nbResultRech=\">L. 100-4<\/a> of the Energy Code. The \u201cPPE\u201d must address the following subjects:  <\/p>\n<ul style=\"text-align: justify;\">\n<li>Energy security;<\/li>\n<li>Increasing energy efficiency and reducing primary energy consumption, particularly from fossil fuels;<\/li>\n<li>The development of renewable and recovered energy;<\/li>\n<li>The balanced development of energy grids, storage, and conversion, as well as energy demand management, to promote local energy production, the development of smart grids, and self-generation;<\/li>\n<li>Preserving consumers&#8217; purchasing power and ensuring competitive energy prices;<\/li>\n<li>Assessing workforce skills needs in the energy sector and adapting training programs to meet those needs.<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">The \u201cPPE\u201d consists of a set of documents that have regulatory significance and include:<\/p>\n<ul style=\"text-align: justify;\">\n<li>A decree setting forth the main objectives of energy policy as well as priorities for action;<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li>A document summarizing the guidelines and actions of the \u201cPPE\u201d;<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li>A report on the content of the \u201cPPE\u201d;<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li>A Strategic Environmental Assessment.<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">The \u201cPPE\u201d plays a key role in shaping French energy policy and, by extension, in the implementation of public policies (such as urban planning and construction in general), because:<\/p>\n<ul style=\"text-align: justify;\">\n<li>All planning and strategic documents containing energy guidelines must be consistent with the objectives set forth in the \u201cPPE\u201d;<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li>The quantitative targets of the \u201cPPE\u201d must always be taken into account when issuing calls for bids for electricity generation facilities (particularly those using renewable energy), demand response capacity, or investments intended to enable the injection of biogas into transmission and distribution networks;<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li>The permits required to commission electricity generation facilities must meet the objectives set forth in the \u201cPPE.\u201d This principle also applies, among other things, to the \u201cstrategic plan\u201d announced last year by EDF in the field of solar photovoltaics and to the ten-year program for the development of the electricity transmission grid; <\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li>The PPE sets the security-of-supply levels for the electricity and natural gas sectors and, specifically with regard to natural gas, the level of storage capacity that must be maintained.<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">The \u201cPPE\u201d draft currently under discussion is a revision of the 2009\u20132020 \u201cPPE.\u201d The revision process was launched in June 2017 and led by the \u201cPPE\u201d Monitoring Committee, composed of 80 representatives of French society, most of whom have a good understanding of energy-related issues. A public debate was held from March to June 2018. Input was gathered from key government agencies and committees addressing environmental and energy issues. Discussions are currently underway regarding the draft \u201cPPE Decree,\u201d the publication date of which remains relatively uncertain.    <\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #ffffff;\">&#8211;<\/span><\/p>\n<h4 style=\"text-align: justify;\"><span style=\"color: #000080;\"><strong>And the winners are\u2026<\/strong><\/span><\/h4>\n<p style=\"text-align: justify;\"><strong><span style=\"color: #000080;\">Solar Energy<\/span><span style=\"color: #000080;\"> :<\/span> <\/strong>With a total installed capacity of approximately 9 GW in 2018, the French government plans to reach a total capacity of 20.6 GW by 2023 and between 35.6 and 44.5 GW by 2028. To achieve these highly ambitious goals, the French government plans to hold two tenders per year, each offering 1 GW of capacity for ground-mounted solar plants, and three tenders per year, each allocating 300 MWp of capacity for rooftop solar. The fact that leading French energy companies, TOTAL and EDF, have announced massive investment plans in the photovoltaic sector likely played a significant role in setting these targets.  <\/p>\n<p style=\"text-align: justify;\"><strong><span style=\"color: #000080;\">Onshore wind power:<\/span><\/strong> The French government has set a target of 24.6 MW by 2023 and 34.1 to 35.6 GW by 2028. In 2018, France\u2019s energy mix included approximately 15 GW of onshore wind power. In its summary document on strategic directions and key actions to be taken under the PPE, the government estimates that 6,500 new wind turbines would be needed to meet these targets. The government has clearly indicated that a significant portion of the additional capacity should come from replacing wind turbines currently in operation whose feed-in tariff contracts will expire in the coming years.   <\/p>\n<p style=\"text-align: justify;\"><strong><span style=\"color: #000080;\">Hydropower:<\/span><\/strong> The government projects that the share of electricity generation from hydroelectric facilities (including tidal power) will reach 25.7 GW in 2023, representing an increase of\u2026 0% compared to 2018. The issue surrounding hydropower generation is, in fact, different from that of other renewable energy sources: although France has been under scrutiny by the European Commission for many years regarding the renewal of its hydroelectric concessions for the largest facilities, the timeline for this renewal\u2014which has been postponed several times\u2014remains uncertain. In this regard, it should be noted that two decrees (<a href=\"https:\/\/www.legifrance.gouv.fr\/affichTexte.do?cidTexte=JORFTEXT000038257641&#038;categorieLien=id\">Nos. 2019-211<\/a> and <a href=\"https:\/\/www.legifrance.gouv.fr\/affichTexte.do?cidTexte=JORFTEXT000038257648&#038;categorieLien=id\">2019-212<\/a> of March 20, 2019, \u201cpooling\u201d the administrative processing of certain hydroelectric concessions, all located along the same rivers) have, in effect, led to the extension of some of these concessions (whose holders are primarily ENGIE and EDF) in exchange for significant investments by the concession holders. Assuming it was not consulted beforehand, it is unclear whether the European Commission would view this move very favorably.   <\/p>\n<p style=\"text-align: justify;\"><strong><span style=\"color: #000080;\">Nuclear energy:<\/span> <\/strong>At first glance, it may seem surprising to classify as a \u201cwinner\u201d an energy source whose share of France\u2019s energy mix is set to drop to 50% by 2035 from the current 75%. However, it is important to note that under the terms of Law No. <a href=\"https:\/\/www.legifrance.gouv.fr\/affichTexte.do?cidTexte=JORFTEXT000031044385&#038;categorieLien=id\">2015-992<\/a> of August 17, 2015, \u201con the energy transition for green growth,\u201d this figure was originally supposed to be reached by 2025. The fact that the pace of the reduction in nuclear power\u2019s share has been slowed is, in itself, a success for the French nuclear industry. Despite this ten-year \u201creprieve,\u201d 14 nuclear reactors will have to be shut down. The closure of the first two nuclear reactors at Fessenheim is scheduled for spring 2020, provided that the EPR reactor at Flamanville has been commissioned by then. Furthermore, since the reduction in nuclear power\u2019s share is mandated by law, a new law will need to be passed in the coming months to formalize the change in the timeline.   <\/p>\n<p style=\"text-align: justify;\"><strong><span style=\"color: #000080;\">&#8220;Innovative&#8221; energy sources:<\/span><\/strong> including biofuels, renewable heat, hydrogen, and <em>power-to-gas<\/em>, the \u201cPPE Decree\u201d aims to promote the development of alternative energy sources\u2014or, at the very least, energy sources that may have been overlooked in the past. Particular emphasis is placed on hydrogen and <em>power-to-gas<\/em>, with a target of 5,000 light-duty commercial vehicles by 2023 and between 20,000 and 50,000 by 2028. <\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #ffffff;\">&#8211;<\/span><\/p>\n<h4 style=\"text-align: justify;\"><span style=\"color: #000080;\"><strong>Those who have lost some feathers\u2026<\/strong><\/span><\/h4>\n<p style=\"text-align: justify;\"><strong><span style=\"color: #000080;\">Offshore wind power:<\/span><\/strong> First, it is worth noting that, surprising as it may seem, France\u2014which has the second-largest offshore wind potential in Europe\u2014currently has no operational wind farms. By comparison, the United Kingdom installed 1.3 GW in 2018 (including 1.1 GW in the first half of the year alone), bringing its total installed capacity to 6 GW, while Denmark has 1.5 GW of offshore wind capacity and is seeking new areas to launch future tenders. France, for its part, continues to move forward cautiously: in 2018, the government secured a significant reduction in the feed-in tariff applicable to offshore wind farm projects that had already been awarded and is calling for additional efforts regarding the Dunkirk wind farm projects (maximum 70 \u20ac\/MWh) in 2019 and in other areas in 2020 (65 \u20ac\/MWh). The targets set for offshore wind power may therefore seem relatively modest: 2.4 GW by 2023 and between 4.7 and 5.2 GW by 2028. These targets include technologies such as floating wind turbines: three tenders are planned for this specific technology by 2025, each with a capacity of 750 MW. Another tender, for a capacity of 500 MW, is being considered for both conventional and floating offshore wind, depending on the rates that will be in effect at that time.     <\/p>\n<p style=\"text-align: justify;\"><strong><span style=\"color: #000080;\">Natural gas\/biogas: <\/span><\/strong>It is an understatement to say that gas has, generally speaking, \u201cavoided the worst\u201d when compared to the initial \u201cPPE\u201d draft, in which gas\u2019s share of the French energy mix was set to be reduced by nearly two-thirds by 2028. Ultimately, the draft \u201cPPE Decree\u201d limits the reduction in gas\u2019s share to 19%, or 420 TWh, compared to 493 TWh in 2017. The PPE summary document clearly states that natural gas must eventually be replaced by biogas, given that the latter offers multiple advantages (ease of storage, an additional source of income for farmers, waste utilization and the circular economy, and an efficient and modern transportation network). Nevertheless, according to the \u201cPPE\u201d summary document, the cost of producing biogas is four times higher than that of natural gas. Consequently, the guiding principle is that the pace of construction of biogas production facilities will be adjusted in line with declining construction and operating costs for these facilities. The French government\u2019s goal is to increase biogas\u2019s share of total gas consumption to 7% by 2030, provided that the production cost of injected biogas is reduced to 67 \u20ac\/MWh (gross PCS basis) by 2023 and to 60 \u20ac\/MWh (gross PCS basis) by 2028, representing a 30\u201340% decrease compared to the current production cost. Assuming that production costs fall more rapidly, the 7% target could be raised to 10%. Furthermore, the government\u2019s ambitions regarding electricity generation from biogas appear very limited: installed capacity is projected to reach 0.27 GW in 2023 and between 0.34 and 0.41 GW in 2028. It can be inferred from this that electricity generation from biogas will likely be phased out over time in favor of directly injecting biogas into the gas distribution and transmission networks.        <\/p>\n<p style=\"text-align: center;\">* * * * *<\/p>\n<p style=\"text-align: justify;\">To achieve the objectives of the \u201cPPE,\u201d the French government has unveiled a series of measures that will need to be detailed in regulatory texts. The path forward appears to be clearly mapped out, but it will be important to keep a close eye on the draft Energy Bill, which is expected to be debated in Parliament in a few weeks. Uncertainty remains regarding the key assumption underlying the development of the \u201cPPE\u201d\u2014namely, that electricity demand in France will remain stable or increase slightly. This assumption appears questionable in light of recent trends in electricity consumption in France. Only time will tell whether this assumption was justified or not.    <\/p>\n<p><a href=\"https:\/\/bmhavocats.com\/equipe\/sebastien-canton\/\">S\u00e9bastien Canton<\/a>[\/vc_column_text][vc_btn title=&#8221;DOWNLOAD THE ARTICLE&#8221; style=&#8221;outline-custom&#8221; outline_custom_color=&#8221;#092b63&#8243; outline_custom_hover_background=&#8221;#E7E6E6&#8243; outline_custom_hover_text=&#8221;#092b63&#8243; shape=&#8221;square&#8221; size=&#8221;lg&#8221; align=&#8221;left&#8221; css=&#8221;&#8221; link=&#8221;url:https%3A%2F%2Fbmhavocats.com%2Fassets%2Fuploads%2F2019%2F07%2FLess-is-more_Les-soubresauts-de-la-politique-%C3%A9nerg%C3%A9tique-fran%C3%A7aise.pdf|target:%20_blank|&#8221;][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row type=&#8221;vc_default&#8221;][vc_column][vc_video link=&#8221;https:\/\/youtu.be\/0PkeqfwPqZg&#8221; el_width=&#8221;50&#8243; align=&#8221;center&#8221;][vc_column_text] The \u201cYellow Vests\u201d protests\u2014which were initially sparked by an increase in environmental taxes on fuel prices\u2014and the more recent Climate Movement protests have brought environmental and energy issues to the forefront. A few weeks before the protests and marches began, the French government released the broad guidelines of the \u201cMulti-Year [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":31728,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[964],"tags":[],"class_list":["post-32122","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-less-is-more"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>[ENERGY] The Ups and Downs of French Energy Policy<\/title>\n<meta name=\"description\" content=\"This summary presents some key elements of the \u201cPPE\u201d for renewable energy and nuclear power, as well as the winners and losers under its guidelines.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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