This is a best prospect industry sector for this country. Includes a market overview and trade data.
The French energy sector is a mature market and is subject to very strong competition. The National Energy Mediator reports that there are thirty suppliers that share the global energy market and is dominated by three major players:
- EDF,electricity supplier
- Engie (formerly GDF – Gaz de France), gas supplier
- Total Energies, resulting from the merger of Total and Direct Energie.
In 2019, the energy sector represented 2% of the French GDP. The energy was responsible for €44 billion (approximately $48 billion) of France’s 2019 trade deficit. For an average household in 2018, energy represented 9 % of its monthly budget. Just over half of the country’s energy is provided by primary domestic production. France imports most of its consumption of fossil fuels and has extensively diversified its geographic sourcing. France’s significant use of nuclear energy not only covers its own needs, but in addition, it has been an electricity exporting country for the past 30 years. With less greenhouse effects, electricity and gas have progressively replaced oil and coal use in the main industrial sectors, although oil-based products are still the norm in the transport sector.
Renewable energy is taking a growing share in the country’s energy mix, representing a target of 25.3% of France’s gross final energy consumption for 2022. French government support for renewable energies is expected to increase 25% with a commitment of €6 billion ($7.06 billion) for 2021. Green energy is a centerpiece of France’s Plan de Relance economic recovery efforts.
Renewable energies have been growing steadily in the last few years in France to reach 11.7% of primary energy consumption and 25.3% of gross final energy consumption in 2019. Renewable energies sustain the equivalent of 60,000 full-time jobs. The Renewable energy sector is very diverse, covering ten different sub-sectors: Wood energy: 35.2 % - Hydraulic 17.3 % - Biofuels 12.1 % - Wind 10.4 % - Heat pumps 9.6 % - Renewable waste 4.8 % - Biogas 3.4 % Solar 3.4 % Others (geothermic, agriculture, marine) 3.6 %. The most developed renewable energies are still wood energy and hydropower, but onshore windfarms and heat pumps are two sectors that have progressed the most in the last few years with offshore windfarms currently under development. In the European Union in 2018, France was in sixteenth position for the share of renewable energy in gross final energy consumption. In absolute levels among the Member States, France is the largest producer of hydroelectricity and the second largest of biofuels.
France’s multiannual energy strategy (PPE) released in April codified the government’s plan to reduce nuclear in the energy mix for electricity production from over 70 percent to 50 percent by 2035 and increase the role of renewables. However, nuclear energy will play a critical role in France’s efforts to achieve its strategic priorities to reducing CO2 emissions, secure supply chains, grow business competitiveness, preserve household purchasing power, maintain skilled industrial jobs, and develop technological expertise in this field.
France is home to one of the most important nuclear parks in the world: With 56 reactors spread over 19 nuclear sites, France has the largest nuclear fleet in the world in proportion to its population. Each year, around 405 TWH of nuclear power is produced.
Nuclear power started its development in France in 1963. After having tested the graphite-gas technology (1st generation) by building nine reactors of this type, France decided in 1968 to turn to the gas industry for technical and economic reasons. pressurized water (2nd generation) designed and developed by the United States.
The impact of the 1973 oil shock led the Messmer government to initiate a program to build 16 reactors of 900 Megawatts of electricity (MWe), 20 additional reactors of 1,300 Mwe after 1976. Between 1996 and 2000, 4 other 1,450 MWe reactors were commissioned, bringing the installed capacity of the park to 63.2 GWe.
An EPR reactor (3rd generation) - with a capacity of 1,650 MWe - is currently under construction on the Flamanville plant site. Other nuclear sites exist in France, but they do not produce electricity. These are uranium manufacturing sites, radioactive waste management centers, or research centers operating experimental reactors.
The French smart grids market is anticipated to boom in the following years. Smart grids are electrical networks that use new technologies to optimize the distribution and consumption of energy.
Forecasts on the French market are promising: from €300 in 2014, it climbed to €800 million in 2016. In 2018, it represented €1.5 billion. After that, its level did remain stable. It is anticipated to represent €1.4 billion in 2022.
According to the Think Smart grids association, the sector today represents some 15,000 direct jobs in France.
France imports record volumes of liquefied gas from Qatar, Russia, and from the United States, taking advantage of low world prices. France strengthens its position in Europe by re-exporting to Spain, Italy and Switzerland.
2019 was a record year for liquefied natural gas (LNG). The process of cooling the gas to -160 degrees to liquefy it then allows it to be transported by ship anywhere on the planet. This method of distribution, which is much more expensive than pipeline delivery, but also much more flexible, is enjoying unprecedented success in the world. Last year, French LNG imports jumped 87%, announced the company GRT gaz, the Engie subsidiary managing most of the gas transmission network in France.
The three LNG terminals at Fos-sur-Mer (Bouches-du-Rhône), Montoir-de-Bretagne (Loire-Atlantique) and Dunkerque (Pas-de-Calais) through which the imported LNG are received have operated at full capacity. Consequently, Engie which was planning to close the Fos-sur-Mer terminal, has signed contracts ensuring that this terminal will continue to be used until 2028.
American exports: In addition to France, all of Europe has been buying LNG on a massive scale since last year. In addition to Qatar and Algeria, France’s historical suppliers, LNG production capacities have jumped in Australia, Russia and above all in the United States, which are starting to export their competitively priced shale gas. Europe’s well developed LNG storage capacities that have boosted its ability to increase imports.
€2 billion is the amount that the French government will invest on hydrogen until 2022 as part of France recovery plan. An amount that is expected to increase to reach €5.7 billion by 2030.
The French government’s hydrogen plan aims to encourage territorial projects to develop “green” hydrogen for use in industry and mobility.
The French plan opts to produce “green” hydrogen by electrolysis from decarbonated electricity sources. Another method would consist of using methane and storing the CO2 emitted during the transformation, which gives what is called “blue hydrogen”.
In France, the total on shore wind power connected amounted to 17 932 MG (Megawatt) on March 31, 2021. A total of 323 MW has been connected since the beginning of the year. In 2020, the wind power production was 39 685 GWh, representing 8.9 percent of national electrical consumption.
In December 2020, France had the fourth European wind farm representing 17 612 MW, behind Germany (62 627 MW), Spain (27 264 MW), and the United Kingdom (24 168 MW).
The offshore wind site on the coast of Saint Nazaire, is currently under construction. It will have 80 wind turbines, provide the equivalent of the annual electricity consumption of 700,000 people, or 20% of the consumption of Loire-Atlantique. It should be finished at the end of 2022. However, several offshore wind projects are currently being developed on the west French coast (Saint Nazaire, Fécamp. Courseulles-sur-Mer, Saint Brieuc, Ile d’Yeux, Dieppe):
France’s commitments to deploying the sector are included in the Pluriannual Energy Programming (PPE). Targets for 2023 and 2028 are as follows:
On shore wind:
24 600 MW for 2023
34 100-35600 MW for 2028
2 400 MW for 2023
4 700-5200 MW for 2028
Ademe (French Agency for Ecological Transition)
Association Francaise du Gaz - AFGAZ
French Gas Association
Conseil français de l ‘Energie - CFE
French Council for Energy (member of the World Energy Council)
Syndicat des Energies Renouvelables - S.E.R.
French Renewable Energies Trade Association
Société Francaise des Energies Nucléaires - SFEN
French syndicate for Nuclear Energy
Think Smart Grids
French Solutions for Smart Grids
Smart Grid + Smart City
Paris - Porte de Versailles
WNE - World Nuclear Exhibition
Paris Nord Villepinte
Contact: U.S. Embassy France - U.S. Commercial Service Trade Specialists:
Tel: +33(0)1 43 12 70 14 / 71 98