France’s Pathway to Decarbonization; Renewable Energy & Energy Efficiency
Romain Zissler, Researcher, Renewable Energy Institute
A few months before successfully hosting the 21st Conference of the Parties, or “COP 21,” in December 2015, which delivered the landmark Paris Agreement, France took early leadership by adopting its Law Relative to the Energy Transition for Green Growth; a major accomplishment with regard to the country’s long-term energy policy. 1
This Law encompasses critical economic and social aspects; industrial development, competitive and affordable energy prices, quality of life…, as well as unavoidable energy security and environmental dimensions; reduction of fossil fuel imports and usages, amelioration of air quality and human health. And decarbonization stands as its first and foremost goal (Table).
This is all the more remarkable that it is expected to be met thanks to renewable energy (RE) expansion and progresses in energy efficiency while significantly reducing France’s reliance on nuclear power and phasing out coal power in the short to medium term.
Table: French Energy Transition Key Targets:
This strategy is in stark contrast with current energy policies in Japan, where – despite brilliant achievements in energy efficiency & savings improvements and solar photovoltaic (PV) deployment in recent years – policy makers are still inexplicably weighing restarting nuclear power to reduce the country’s greenhouse gas (GHG) emissions and contradictorily have a shameful weak stance towards coal power.
Another interesting aspect of the French energy transition is the beginning of the integration of the power and transportations sectors with the electrification of the later. The installation of at least 7 million charging points for electric vehicles by 2030 is targeted. 5 The Government of France also announced in July 2017 that it plans to end the sale of gasoline and diesel vehicles by 2040. 6
This is a sound integrative approach because France’s electricity generation is already essentially GHG-free, which is not the case of the transportation sector that remains by far the primary source of pollution (Chart 3) due to the heavy use of refined petroleum products.
Such a wide strategy for the entire energy system painfully lacks in Japan where policies essentially focus on the power sector leaving aside cross-sectoral synergy opportunities.
While the vision of France’s energy paradigm shift is to be praised, it is equally important to present concrete results – both successes and failures – towards this change:
On the positive side; RE capacity targets by technology a supported by policies such as pluriannual auctions for large scale wind and solar power, for example, have the merit to offer visibility to industrial actors by guaranteeing volumes of capacity to be installed in the next few years and pave the way to the targets. 7 Auctions have also already demonstrated their efficiency in delivering cost competitive – with existing nuclear power – solar PV in France; a recent auction showed average price of solar PV for awarded large-scale ground mounted projects (5-17 megawatts) at €56 per megawatt-hour. 8
In addition, administrative authorizations for RE projects, which were a big challenge for wind power in particular, i.e. developers had to lead several administrative procedures and obtain different approvals based on various legislations resulting in project realization time of 6-7 years, have been simplified and promising results achieved; a record 1.3 gigawatt (GW) of wind power capacity was installed in 2016. 9 To further accelerate projects realization time, reduce uncertainty, and thus cost, a unique environmental authorization for RE projects finally came into force on 1 March 2017. 10 Such efforts, would also be very welcome in Japan where inadequate environmental impact assessment regulation is slowing down wind power expansion. 11
When it comes to energy efficiency of buildings, the thermal regulation 2012, defining the requirements for the thermal performance of new buildings (those that applied for a building permit after 1 January 2013), sets three innovative and stringent performance indicators among which; a primary energy consumption level below 50 kilowatt-hours per square meter per year for five uses – heating, domestic water-heating, lighting, cooling, and auxiliary systems. 12 The new thermal regulation 2020 will target positive energy buildings, which produce more energy than they consume. 13 At the same time, renovation efforts of existing social and private dwellings takes place as well. 14
Regarding financing aspects, France has been quite innovative. The Law Relative to the Energy Transition for Green Growth requires pension funds, insurance companies and other institutional investors to disclose how they are managing climate change risks. 15 In June 2017, a monitoring report by experts from Ernst & Young, a global leader in assurance, tax, transaction and advisory services, showed that 90% of the 40 companies of the study panel (among which; Air France, Électricité de France, ENGIE, Renault, Total…) are reporting direct GHG and energy indirect GHG emissions and 20% of them have a goal to reduce their GHG that is compatible with a 2°C scenario. 16
Finally, in January 2017, France became one of the first countries to issue a sovereign green bond. 17 Amounting to €7 billion, a record, it enabled to fund the country’s energy transition. 18
On the negative side; a lack of a detailed roadmap to reduce nuclear power creates uncertainty and slows down the energy transition in France. In this regard, France and Japan would be wise to learn from the German experience, which by clearly paving the way at an early stage of the country’s nuclear phase-out made investors let know well in advance the volume and timing of capacity needed to be replaced. In France inaction has led to postpone the nuclear reduction target, a resounding failure, which could have been avoided with unwavering political willingness and thorough industrial planning.
Undeniably both France and Japan have made good progresses towards sustainability in recent years. A lot more remains to be done though. If France really wants to become the leader it envisions to be, it will need to take stronger actions. And if Japan wants to become a leader it should start developing an ambitious vision, and in this regard France – to some extent – may also provide a case worth looking at.