France 2021

Energy Policy Review

INTERNATIONAL ENERGYAGENCYThe IEA examines thefull spectrumof energy issues
including oil, gas andcoal supply anddemand, renewableenergy technologies,
electricity markets,energy efficiency,
access to energy,
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management andmuch more. Throughits work, the IEA
advocates policies
that will enhance thereliability, affordability
and sustainability ofenergy in its
30 member countries,
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International Energy Agency
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IEA member
countries:

IEA association
countries:

Australia
Austria
Belgium
CanadaCzech Republic
Denmark
Estonia
FinlandFranceGermany
GreeceHungary
Ireland
Italy
Japan
Korea
Luxembourg
MexicoNetherlands
New Zealand
NorwayPolandPortugal
Slovak Republic
Spain
SwedenSwitzerland
TurkeyUnited Kingdom
United States

BrazilChina
India
Indonesia
MoroccoSingapore
South Africa
ThailandThe European
Commission also
participates in thework of the IEAThe International Energy Agency (IEA) has conducted energy policy reviews of its member
countries since 1976. This peer review process supports energy policy development andencourages the exchange of international best practices. By seeing what has worked – ornot – in the real world, these reviews help to identify policies that can deliver concrete
results.
As a member of the IEA for almost three decades, France has been instrumental in guiding
international efforts to accelerate clean energy transitions. France has demonstrated
important leadership in global climate negotiations, notably with the landmark Paris
Agreement in 2015 and in promoting green finance.

FOREWORD

ForewordI also highly value the strong engagement with IEA activities that we are seeing from
France’s Minister for Ecological Transition, Barbara Pompili, and her staff at the Ministry.
This close cooperation was evident in the preparation of this report as well as for a recent
joint study the IEA published with France’s transmission system operator, RTE, which
examined how power systems could operate with very high shares of variable renewables.
France was among the first countries in the world to adopt an energy transition frameworkwith a National Low-Carbon Strategy and a 10-year investment plan for the energy sector.
In 2019, France enacted into law its goal of reaching net zero emissions by 2050. However,France is behind schedule on its energy transition targets, despite important reforms being
underway. While its power sector emits relatively low quantities of carbon, its overall
energy consumption is dominated by fossil fuels, resulting in rising emissions, notably fromtransport.
France’s nuclear fleet is ageing and maintaining its low-carbon power generation will
require timely decisions about the future electricity mix along with an acceleration of clean
energy investments. France’s economic recovery plan (“Plan Relance”) and “France 2030”
investment plan have earmarked unprecedented levels of funding for sustainable mobility,
building retrofits, hydrogen, nuclear power and other technologies. To guide progress inthese areas, the government needs to refresh its 2016 national energy research strategy.
France has considerable work ahead on the road to net zero. It needs to focus on
implementation, reviewing progress to date, and increasing co-ordination across thegovernment. As the European Union implements its 55% emissions reduction target,
France will need to increase its 2030 targets for emissions reductions, share of renewables
and sector-by-sector energy efficiency. I strongly believe this report can help France
advance its energy and climate goals while ensuring fairness, energy security andeconomic growth. The IEA will continue to work closely with France as it moves ahead
with its transition.
Dr. Fatih Birol
Executive Director

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International Energy Agency

Foreword..............................................................................................................................3
1. Executive summary .....................................................................................................11
Increased climate focus .....................................................................................................11
Slow progress of France’s energy transition .....................................................................12
Prioritising implementation ................................................................................................13
Clear milestones for net zero and targets for 2030 ...........................................................14
Policies for the net zero pathway ......................................................................................15
Electricity market reforms ..................................................................................................15
Carbon pricing and energy tax reforms .............................................................................16
Sustainable recovery will be an opportunity ......................................................................16

TABLE OF CONTENTS

ENERGY INSIGHTS

Security of France’s clean energy transition .....................................................................17
Key recommendations .......................................................................................................18
2. General energy policy .................................................................................................19
Country overview ...............................................................................................................19
Energy supply and demand...............................................................................................21
Key institutions ..................................................................................................................26
Energy transition strategy and targets ..............................................................................27
Territorial and regional energy planning............................................................................29
EU Climate Law and the role of the National Energy and Climate Plan ...........................30
Energy and carbon pricing and taxation............................................................................31
Green budgeting ................................................................................................................32
People-centred transition ..................................................................................................33
Assessment .......................................................................................................................35
Recommendations.............................................................................................................38

ENERGY TRANSITION
3. Climate change ............................................................................................................41
Overview ............................................................................................................................41
Energy-related CO2 emissions ..........................................................................................42
CO2 emissions drivers and carbon intensity .....................................................................43
Governance and compliance.............................................................................................49
Climate finance ..................................................................................................................50
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Emissions reduction targets ..............................................................................................45

TABLE OF CONTENTS

Adaptation and resilience to climate change ....................................................................52
Assessment .......................................................................................................................55
Recommendations.............................................................................................................58
4. Energy efficiency .........................................................................................................59
Overview ............................................................................................................................59
Energy intensity and energy savings ................................................................................60
Energy efficiency targets and policies ...............................................................................62
Policies and progress by sector ........................................................................................64
Assessment .......................................................................................................................73
Recommendations.............................................................................................................77
5. Renewable energy .......................................................................................................79
Overview ............................................................................................................................79
Progress towards renewable targets.................................................................................80
Trends in renewable energy by sector ..............................................................................82
Policies and measures ......................................................................................................84
Renewables in electricity ...................................................................................................84
Renewables in heating and cooling ..................................................................................91
Renewables in transport ....................................................................................................93
Assessment .......................................................................................................................97
Recommendations.......................................................................................................... 102
6. Energy research, development and innovation ................................................... 105
Overview ......................................................................................................................... 105
IEA framework for energy innovation policy ................................................................... 106
Key energy innovation priorities ..................................................................................... 107
Main actors shaping France’s energy innovation........................................................... 107
A. Funding for energy R&D and innovation.................................................................... 109
B. Knowledge management ........................................................................................... 111
C. Support for innovation and market creation in strategic technology areas ............... 114
D. Tracking progress of energy innovation .................................................................... 117
Recommendations.......................................................................................................... 121

ENERGY SECURITY
7. Electricity................................................................................................................... 123
Electricity supply and demand........................................................................................ 124
Electricity trade ............................................................................................................... 125
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Overview ......................................................................................................................... 123

Electricity policy .............................................................................................................. 130
Market reforms................................................................................................................ 130
Electricity security and emergency measures................................................................ 136
Crisis management and emergency response .............................................................. 141
Assessment .................................................................................................................... 142
Recommendations.......................................................................................................... 147
8. Nuclear....................................................................................................................... 149
Overview ......................................................................................................................... 149
The role of nuclear in France’s energy transition ........................................................... 150
Outlook for nuclear energy ............................................................................................. 150
Modernisation and long-term operation ......................................................................... 153

TABLE OF CONTENTSElectricity demand .......................................................................................................... 128

The outlook for nuclear new build .................................................................................. 154
Financing nuclear and electricity market design ............................................................ 155
The nuclear fuel cycle, research and development ....................................................... 157
Assessment .................................................................................................................... 158
Recommendations.......................................................................................................... 161
9. Natural gas ................................................................................................................ 163
Overview ......................................................................................................................... 163
Gas market structure ...................................................................................................... 168
Networks and tariffs ........................................................................................................ 168
Gas policy and market regulations ................................................................................. 170
Assessment .................................................................................................................... 178
Recommendations.......................................................................................................... 180
10. Oil ............................................................................................................................. 183
Overview ......................................................................................................................... 183
Oil policy ......................................................................................................................... 187
Market structure .............................................................................................................. 189
Oil infrastructure ............................................................................................................. 190
Oil emergency policies ................................................................................................... 193
Assessment .................................................................................................................... 197
Recommendations.......................................................................................................... 199

ANNEX A: Organisations visited .................................................................................... 201
ANNEX B: Review team and preparation of the report .................................................. 203
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ANNEXESTABLE OF CONTENTS

ANNEX C: Energy balances and key statistical data ..................................................... 205
ANNEX D: International Energy Agency “Shared Goals” .............................................. 209
ANNEX E: Glossary and list of abbreviations ................................................................ 211

LIST OF FIGURES, TABLES AND BOXES

Figure 2.1
Figure 2.2
Figure 2.3
Figure 2.4
Figure 2.5
Figure 2.6
Figure 2.7
Figure 2.8
Figure 2.9
Figure 3.1
Figure 3.2
Figure 3.3
Figure 3.4
Figure 3.5
Figure 3.6
Figure 3.7
Figure 3.8
Figure 3.9.
Figure 3.10
Figure 3.11
Figure 4.1
Figure 4.2
Figure 4.3
Figure 4.4
Figure 4.5
Figure 4.6
Figure 4.7
Figure 4.8
Figure 4.9
Figure 4.10
Figure 4.11
Figure 4.12
Figure 4.13
Figure 5.1

Map of France..............................................................................................20
Overview of France’s energy production, supply and consumption, 2019 .22
Total energy supply in France by source, 2000-20 .....................................22
France’s energy production by source, 2000-20 .........................................23
Share of total energy supply produced domestically in France by ................
energy source, 2000-20...............................................................................23
Share of total energy supply by source in G20 countries, 2019 .................24
Total final consumption in France by sector, 2000-19 ................................25
Total final consumption in France per sector and per fuel, 2019 ................25
National, regional and local plans for the energy transition ........................30
Greenhouse gas emissions in France by sector, 1990-2019 and targets ..42
France’s energy-related CO2 emissions per sector, 2000-20 .....................43
France’s energy-related CO2 emissions by source, 2000-19 .....................43
Energy-related CO2 emissions and key drivers in France, 2000-20 ...........44
CO2 intensity per GDP* in France and IEA countries, 2000-19 ..................44
CO2 intensity of electricity and heat generation in France and selected .......
IEA countries, 2000-19 ................................................................................45
France’s path to climate neutrality under the revised National Low-Carbon
Strategy, 2005-50 ........................................................................................47
France’s carbon budgets under the National Low-Carbon Strategy ...........48
Losses from extreme weather events in EU countries and the .....................
United Kingdom, 1980-2019 ........................................................................52
Emissions of air pollutants in France, 2000-19 ...........................................54
Concentrations of air pollutants in France, 2009-18 ...................................54
France’s energy demand and key demand drivers, 2000-19 .....................60
Energy intensity per GDP in selected IEA countries, 2000-18 ...................60
Energy intensity per capita in IEA countries, 2019 .....................................61
Energy savings by sector in France, 2000-18 .............................................61
Total final consumption in France by sector, 2000-19 ................................62
France’s primary and final energy consumption, 2000-18 and targets .......63
Buildings energy demand in France by source, 2000-19............................64
Residential energy consumption in France by end-use, 2019, and by ..........
source, 2000-19 .........................................................................................65
District heat supply in France by source, 2000-19 ......................................66
Transport total final consumption in France by fuel, 2000-19 .....................69
Total fleet of electric cars and charging points in France, 2010-20 ............69
Industry total final consumption in France by source, 2000-19 ..................72
Industry total final consumption in France by subsector, 2019 ...................72
France’s renewable energy by sector, 2019 ...............................................818

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FiguresFigure 5.4
Figure 5.5
Figure 5.6
Figure 5.7
Figure 5.8
Figure 5.9
Figure 6.1
Figure 6.2
Figure 6.3
Figure 6.4
Figure 6.5
Figure 6.6
Figure 6.7
Figure 7.1
Figure 7.2
Figure 7.3
Figure 7.4
Figure 7.5
Figure 7.6
Figure 7.7
Figure 7.8
Figure 8.1
Figure 8.2
Figure 8.3
Figure 8.4
Figure 9.1
Figure 9.2
Figure 9.3
Figure 9.4
Figure 9.5
Figure 9.6
Figure 10.1
Figure 10.2
Figure 10.3
Figure 10.4
Figure 10.5
Figure 10.6
Figure 10.7
Figure 10.8

9TABLE OF CONTENTS

Figure 5.3

France’s progress towards 2020 and 2030 goals for renewable ...................
energy deployment ......................................................................................82
Historic trend of renewable energy in total final energy consumption ...........
in France, 2000-19.......................................................................................83
Renewable energy consumption by sector in France, 2019 .......................83
Renewable electricity generation in France, 2004-20 .................................85
France’s renewable electricity budgetary commitments (20 years) ............87
Renewable energy in heating and cooling in France, 2004-19...................91
Renewable energy in transport in France, 2004-19 ....................................94
Renewable energy in transport in IEA countries, 2019 ...............................95
The IEA’s four functions of a successful innovation ecosystem for ...............
energy ....................................................................................................... 106
Energy innovation ecosystem in France .................................................. 108
Energy-related public RD&D budget by sector in France, 2009-19 ......... 109
Energy-related public RD&D spending per GDP in IEA countries, 2019* 110
Energy-related R&D spending by globally listed companies .........................
headquartered in France, by sector, 2015-20 .......................................... 111
Energy patenting trends in France (left) and contributions to global .............
patenting (right)......................................................................................... 113
Early-stage venture capital investments in clean energy start-ups in .............
France, by sector, 2010-20....................................................................... 116
France’s electricity generation by source, 2000-20 ................................. 124
France’s electricity net trade (imports/exports), 2000-19 ......................... 126
Electricity infrastructure of France ............................................................ 127
Electricity demand in France by sector, 2000-19 ..................................... 128
Share of electricity in total final consumption in IEA countries, 2019 ...... 129
Electricity generation for IEA countries, 2020 .......................................... 129
Electricity prices for France and selected IEA countries, 2000-20 .......... 134
Electricity industry and household prices in IEA countries, 2020 ............ 135
Nuclear power generation in France, 2000-20 ......................................... 149
History of commissioning pressurised water reactors in France, ..................
1977-99 ..................................................................................................... 153
Projections for the levelized cost of electricity in France by technology .. 154
Key actors in the French nuclear sector ................................................... 157
Share of natural gas in France’s energy system, 2000-20 ...................... 163
France’s natural gas net imports by country, 2000-19 ............................. 164
France’s natural gas demand by sector, 2000-19 .................................... 165
Industry and household natural gas prices in IEA countries, 2020 .......... 169
Natural gas prices in France and selected IEA countries, 2000-20 ......... 170
Gas infrastructure in France ..................................................................... 172
The role of oil in supply, electricity and consumption in France, ...................
2000-20 ..................................................................................................... 184
France’s crude oil net imports by country, 2000-19 ................................. 184
France’s oil products production, 2000-19 ............................................... 185
France’s oil products consumption, 2000-19 ........................................... 185
France’s oil products net trade by country, 2000-19 ................................ 186
France’s oil demand by sector, 2000-19 .................................................. 187
Price comparisons for automotive diesel, unleaded gasoline (95 RON) .......
and light fuel oil in the IEA, 3Q 2020 ........................................................ 190
Oil infrastructure in France ....................................................................... 191

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Figure 5.2

TABLE OF CONTENTS

Figure 10.9 Stockholding system in France ................................................................ 196
Figure 10.10 Emergency oil stocks in France by type, 2010-20 .................................... 196
TablesTable 2.1
Table 2.2
Table 3.1
Table 5.1
Table 5.2
Table 5.3
Table 5.4
Table 6.1
Table 7.1
Table 8.1
Table 9.1
Table 9.2
Table 9.3

Main targets and policies and measures in the multiannual energy plan .....
2020 .............................................................................................................29
Evolution of domestic consumption taxes between 2013 and 2020 ...........32
France’s targets for reducing emissions of pollutants for 2020 and 2030 ..54
France’s renewable energy targets by sector for 2020 and 2030...............81
France’s targets by fuel for the electricity mix up to 2035 ...........................84
Targeted promotion of renewable electricity capacity (GW) .......................85
France’s targets for renewable heat under the PPE 2020 (TWh) ...............92
Mission Innovation – Spending overview ................................................. 110
Structure and evolution of electricity generating capacity in France........ 125
Nuclear power reactors in France ............................................................ 151
Entry interconnection capacities of the French gas network (GWh/d) ..... 173
Exit interconnection capacities of the French gas network (GWh/d) ....... 173
Liquefied natural gas terminals in France, 2020 ...................................... 174

Boxes

Box 6.1
Box 7.1
Box 7.2

Technical conditions for a power system with a high share of renewables ...
in France towards 2050 ...............................................................................86
France’s national hydrogen strategy ........................................................ 116
The restructuring of the French utility EDF .............................................. 132
Towards a consumer-centred clean energy transition ............................. 135

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Box 5.1

France has been an early thought leader of the global energy transition. As host of the
COP21 and the Paris Agreement, France is widely seen as a frontrunner in the energy
transition by the international community.
France benefits from decarbonised electricity and the lowest per capita emissions ofadvanced economies thanks to the role of nuclear energy, which accounted for 71% of its
power mix in 2019, and the role of hydro power (10%).

ENERGY INSIGHTS

1. Executive summary

France’s decarbonisation framework, anchored in the Energy Transition Law of 2015,
builds on the National Low-Carbon Strategy for 2050 (Stratégie Nationale Bas-Carbone,
SNBC), with targets for the reduction of fossil fuel use and emissions by sectors under
three five-year carbon budgets out to 2034. In the energy sector, actions are implemented
by two successive five-year energy investment plans (la programmation pluriannuelle del’énergie, PPE). Building on the SNBC and the PPE, regions are implementing their own
climate and energy transition goals under the regional plans for spatial planning,sustainable development and equality. At the local level, municipalities are working on theirclimate air and energy plans.
In 2021, France is not yet on track to reach its targets for energy efficiency, renewableenergy or emissions reductions, that were agreed in 2015. France should be able to catchup in the coming years, if the important reforms which are under way are implemented
across the energy sector. As foreseen in the PPE, a significant acceleration in investmentin the clean energy transition is needed to achieve France’s energy and climate targets by
2030. Commendably, the government adopted a historic Recovery Plan to fight the
COVID-19 pandemic, which in addition to the PPE funding, offers important green funding
dedicated to the energy transition. The next five to ten years are critical and France willneed to focus on the implementation of its energy policy priorities towards a sustainable,
secure and just transition.

Increased climate focus

The government has increased awareness of the need for climate action and has worked
to strengthen its governance. The High Climate Council was created in 2019. The
prime minister was tasked with co-ordinating climate action across government based on
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Since the International Energy Agency’s (IEA) last review of France’s energy policies
in 2015, the government has taken significant actions to strengthen domestic climate
action on the road the net zero. The 2019 Energy and Climate Law legislated carbon
neutrality by 2050 and a tighter emissions reduction pathway (an 85% reduction by 2050
compared to 1990 levels). In 2020, the government updated the SNBC and the PPE
towards the goal of carbon neutrality by 2050.

1. EXECUTIVE SUMMARY

sector roadmaps. The Citizens’ Convention provided a range of recommendations for
speeding up climate action by 2030, including at the regional and local levels, which arealso reflected in the 2021 Climate and Resilience Law. France has made progress instrengthening building codes, labelling and the application of energy audits for enterprises
and has enhanced measures to support improved efficiency of the mobility system. A
strong focus on renovation, the just transition and clean mobility is emerging with additional
funding provided under the historic green funding under the French Recovery Plan fromthe COVID-19 pandemic. In October 2021, France announced a EUR 30 bln investment
plan for 2030, which targets French industrial development in the energy, automotive andspace sectors, including EUR 8 bln dedicated to energy technology investment in the
decarbonisation of industry, in hydrogen and small modular reactors; EUR 4 bln for electricand plug-in hybrid vehicles.

Slow progress of France’s energy transition
Despite this laudable progress in upgrading its energy transition framework, France islagging behind with implementation. France has not reached its 2020 targets on energy
efficiency and renewable energy. And its 2030 emissions targets, adopted in 2015, remainunchanged; the second carbon budget was revised upwards in 2020, lowering the effort
required up to 2023.
In the area of energy efficiency, final energy consumption was 145.5 million tonnes of oil
equivalent (Mtoe) in 2019, much above the 2020 target of 130 Mtoe. To put France on a
net zero pathway and achieve the targeted decline in final energy consumption to
120.9 Mtoe in 2030, pivotal changes in France’s economic structure and consumer
behaviour, alongside greater digitalisation and electrification, are required.
Over the past decade, wind and solar photovoltaic (PV) electricity generation haveincreased, driving the share of renewables in electricity generation from 14% in 2010 up
to 23.4% in 2020. Hydropower represents half of renewable electricity generation. France
aims at a share of 23% renewables in gross final energy consumption by 2020, but had
17.2% in 2019 and 19.1% in 2020 (preliminary data). The gap with the 2023 targets under
the PPE is massive: France would need to add 6.4 gigawatts (GW) of wind capacity(i.e. 40% of total cumulative capacity to date) and almost double the solar PV capacity injust three years.

Moreover, the electric power fleet is ageing and private investments in large-scale capacity
additions are not coming forward, amid the lack of long-term visibility of the electricity mix
beyond 2035. The SNBC strongly relies on low-carbon electricity, but does not provide
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The delivery gap is mainly due to the lack of administrative staff and lengthy permitting
procedures, but a range of remarkable reforms was carried to shorten and streamline
them, such as the ESSOC Law, PACTE Law and ASAP Law. Results are expected tomanifest themselves in the coming years. The retroactive revision of support mechanisms
has been chaotic and their implementation takes too long, like for new solar tariffs. Stop-go
policies, notably the retroactive cuts on incentives for solar plants built in the period
2006-10, are undermining investors’ confidence and increasing the risks and costs offuture investment. Offshore wind is taking off slowly, but France remains significantly
behind its neighbours in the implementation of an offshore wind strategy and in the paceof deployment.

visibility on the sources and technology options for 2035 and beyond. The government
postponed the planned reduction in the share of nuclear electricity to 50% from 2025 to2035. Recommended by the 2015 IEA review, this is a welcome step at the time of climate
urgency, which maintains the benefits of low-carbon electricity for France’s energy
transition. With the support of France’s transmission system operator RTE, thegovernment is currently reviewing several 2050 decarbonisation scenarios as input to atimely decision on the long-term electricity mix beyond 2035, which is very much needed.
Whichever scenario will be followed, both the role of nuclear and renewable energy will
have to be secured. A joint study by the IEA and RTE in 2020 has provided analysis
regarding the technical requirements for system operation with high shares of variable
renewables in 2050.
France is not on track towards its emissions reduction targets for sectors outside theEuropean Union’s (EU) Emissions Trading System (ETS), as transport emissions continue
to grow. France has not met its first carbon budget and it remains to be seen if it will meetits second one. In 2020, the IEA expects a 12% reduction in CO2 emissions from 2019
levels for France, due to the COVID-19 pandemic. However, these trends do not reflect
actual emissions reductions and a fast rebound is expected with the recovery of theeconomy.

ENERGY INSIGHTS

1. EXECUTIVE SUMMARYFrance has ambitious targets and incentives, such as the bonus/malus system andconversion bonus to support the switch to electric and plug-in hybrid vehicles. The Mobility
Strategy and 2019 Law on Mobility Orientation require all sales of new passenger cars tobe zero emission in 2040. The Climate and Resilience Law of 2021 also includes a ban of
the sale of the most polluting vehicles from 2030 onwards. Many countries already havemore ambitious targets (despite having a much less decarbonised power mix). It is
welcome that the new Climate and Resilience Law has moved to a 2030 target. This is a
critical signal, as France is likely to miss its target for electric vehicle roll-out and charging
infrastructure under the PPE, targeting sales of electric and plug-in hybrid vehicles of
1.2 million by 2023 and 4.8 million by 2028, which requires a strong increase, up fromabout 671 000 in mid-2021. After Norway, Sweden, the Netherlands and Germany, France
is now catching up in Europe’s electric mobility market, reaching the level of theUnited Kingdom, when considering new car registrations.

Prioritising implementation

To date, the government does not yet assess the results and progress of the renewable
tenders or the efficiency improvement by sector. There is no framework to track, assess
or guide progress towards the many domestic targets besides the medium-term National
Energy and Climate Plan, as many policies and targets remain fragmented acrossgovernment.

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Over the past five years, the government has revised its Energy and Climate Law twiceand set a very high number of targets for fuels and sectors. Local and regional authorities
have also adopted targets, but these are not necessarily aligned or in step with net zero
goals, technology progress, socio-economic analysis or affordability concerns. While many
countries are also struggling with similar challenges, notably as they target net zero
emissions by 2050, going forward, a very strong focus on accelerating implementation andexecution is critical for France.

1. EXECUTIVE SUMMARY

Several steps need to be envisaged to make a step change in the implementation ofclimate policy. The government needs to focus its policies on implementation and adopt
tools to achieve faster progress and track, including the results towards the targets, forinstance with an annual update of the SNBC and PPE indicators.
The government needs to boost its achievement focus and policy certainty to increase
investors’ confidence and accelerate affordable private investment at the pace necessary
to meet the 2020 and 2030 targets for renewables and sectorial as well as interim subtargets under the PPE. Any contradicting signals increasing uncertainty, risk and cost ofinvestment should be carefully avoided. Any retroactive measures are particularly harmful
in this respect. In the area of energy efficiency and renewables, the public support
schemes remain complex, multiple and fragmented and do not yet support large-scale
investment. They need to be further simplified for consumers, building on recent examples,
like MaPrimeRénov’, energy vouchers and solar PV.
To steer implementation in all sectors, the government, led by the prime minister, should
ensure the co-ordination, implementation and tracking of progress across all levels ofgovernment, alongside an increase in the capacity of the ministries to monitor, guide anddeliver policies on the ground. The prime minister should present concrete proposals to
speed up and streamline procedures for licensing of renewable energy projects, andstrengthen energy taxation (with a focus to phase out remaining indirect fossil fuelsubsidies). The government needs to increase its expertise and resource capacity forleveraging higher private investment. This requires transparency, communication andengagement with all stakeholders.
To improve implementation and ensure a just transition, the government should also
strengthen its capacity to work with the regions. The regionalisation of the PPE is awelcome step in this regard, provided it is well co-ordinated and utilised with the aim ofaccelerating implementation.
A regular review of progress is fundamental: the High Council on Climate’s annual report
and the government’s report on the PPE, carried out every two years, are good starting
points. To respond to the High Council on Climate, the government should carry out amore systematic annual review of progress. Clear identification and communication of thegaps between policy provisions and real actions are critical for the transparency andaccountability of France’s clean energy transition.

Among G7 members, France has the lowest value of CO2 emission per capita inabsolute terms. It has the least stringent goal in relative terms with a target of a
40% reduction of greenhouse gas emissions by 2030. However, the target has
not been strengthened since 2015 and progress will not be made without new policy
action. France plans to revise its National Low-Carbon Strategy and the energy
plan. This is an opportunity to align with the EU’s target of reducing emissions by
55% by 2030 and respond to the EU Green Deal and the related Fit-for-55%
package. In doing so, the government should improve the clarity and stability of its
targets (reflecting updated energy technology costs and socio-economic analysis),alongside stronger policy consistency, gap analysis and robust implementation
tracking.
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Clear milestones for net zero and targets for 2030

Moving towards net zero will require that transport, buildings and industry are put on
cost-effective pathways towards climate neutrality while maintaining a low-carbon
electricity supply. A clean energy technology roadmap underpinning a revised nationalenergy research strategy should accompany the new SNBC/PPE under preparation for2024 to identify pathways and technology choices, job creation opportunities, and inform
investment decisions and track progress. Based on a robust evaluation of clean energy
technology pathways for 2030, 2040 and 2050, the PPE will need to be strengthened andidentify broad clean energy technology options in annual green budgets under the PPE,
including for energy efficiency.
In this context, the government needs to revisit the expected contributions of biomass;
carbon capture, utilisation and storage; and decarbonised gases, notably hydrogen, basedon the latest technology progress, when updating the SNBC. The PPE, the Programming
Plan on Jobs and Competences (PPEC), and the revised National Strategy for Energy
Research (SNRE) will need to be aligned.

ENERGY INSIGHTS

1. EXECUTIVE SUMMARY

Policies for the net zero pathway
Robust policies are needed for clean energy investments in modern energy markets insupport of a strong energy industry. This includes stable and clear market-based support
schemes, which lower risks and support technology scale-up and accelerate deployment.
This should be complemented by procedures that deliver the permit as a default and grants
and loans that expand green recovery funding. The MaPrimeRénov’ is already a very goodstep towards this delivery-focused design of policies that could quickly reach scale.

Electricity market reforms
Since the IEA’s last review in 2015, energy markets in France have seen a rise incompetition – in the gas sector thanks to unbundling and the phase-out of regulated prices;
and in electricity, with the entry of new suppliers at both the wholesale and the retail level
thanks to European wholesale electricity market reforms.

A key element in this context are the conditions under which other suppliers can haveaccess to electricity from existing nuclear power plants. A new market regulation for the
French electricity market is needed by 2025 with the end of regulated access tariff(ARENH) mechanism, closely integrated with its European neighbours. A timely decisionon how the government plans to finance the modernisation of existing generation capacityand new nuclear investment is urgently needed.
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A more competitive electricity retail market is slowly emerging, with a large number ofelectricity suppliers offering market deals to French consumers, some below regulated
tariffs. France maintains regulated tariffs which are offered by Électricité de France (EDF),
the incumbent supplier of more than 70% of French residential consumers. The
government does not have plans to phase out regulated tariffs for residential consumers
and continues seeing benefits of those, as reflected in the assessments made by the
French Competition Authority and the Council of State in 2021. However, the government
needs to ensure a level playing field among all actors, EDF and new entrants, based on
unbundling and fair rules for all market participants. However, the government has said it
will review the purpose and use of regulated electricity prices.

1. EXECUTIVE SUMMARY

New network tariffs were adopted in 2021 and electricity network tariff regulation
increasingly empowers prosumers, renewable energy communities and electricity
distribution companies to drive the energy transition.

Carbon pricing and energy tax reforms
Carbon price signals remain important for clean energy investments. The EU Green Dealand its Fit-for-55% package are expected to strengthen the carbon price signal under the
EU ETS and non-ETS sectors. In the transport and buildings sectors, France already levies
a carbon tax as part of its energy taxation at EUR 44 per tonne of CO2.
However, carbon pricing cannot be done without policies for a just transition, which needs
to be a continuous priority for the government. Social acceptance of additional taxes
reached a limit, as shown by prolonged protests during 2018-19, when excise taxes on
motor fuels and the related carbon component both increased during a period of high oil
prices. France has increasingly narrowed the gap between the taxation of diesel andgasoline, which now better reflect the relative carbon footprints of these fuels. Moreover,France is the first country to implement a green budgeting approach, which offers lessons
for many EU countries at the time of the energy transition.
There is little room for further tax increases without a new approach to managing the costof the transition, e.g. by supporting reskilling, employment, and the transition ofcommunities and workers. Any further reform of carbon taxes should be part of a broader
energy tax reform. French environmental taxes need to better reflect environmental andsocial costs. Phasing out fossil fuel subsidies in the form of energy tax exemptions will
reduce consumption and emissions and increase efficiency, notably in the transport sector.

Sustainable recovery will be an opportunity

France’s Recovery Plan is a historic plan for accelerating the implementation of energy
and climate targets and supporting a people-centred transition. Leading global efforts,
France has adopted a very large and also green recovery plan, dedicating more than EUR
30 billion (bln), out of a total of EUR 100 bln, of the funding under the French Recovery
Plan to sustainable recovery objectives: to support transport (EUR 20 bln), the renovationof buildings (EUR 6 bln), technology innovation in nuclear (EUR 470 million) and France’shydrogen strategy (EUR 7 bln). This funding comes in addition to the support schemes forrenewable energies included in the PPE in 2020 as well. Important innovative investment
schemes include the MaPrimeRénov’, which supports energy efficiency in buildings acrossall income classes (and replaces the energy transition tax credit), increases subsidies forthe private purchase of electric vehicles and provides additional tax credits for the
installation of electric vehicle chargers at home.

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France has a highly skilled energy industry, which can be a backbone for a resilient
economic recovery. While nuclear and the oil and gas sectors account for the majority of
employment today, the renewables sector, notably wind and solar, has seen dynamic
growth in jobs and investments. Under the SNBC, this is projected to accelerate with thecreation of 300 000-500 000 new jobs by 2030 and 800 000 by 2050, boosted byinvestments in transport, buildings and energy.

To implement the plan successfully and ensure that taxpayers’ money is spent wisely,
policies for net zero, as outlined above, can leverage projects and catalyse private
investments, including in electric mobility, low-carbon residential heating, hydrogen andbatteries.

Security of France’s clean energy transition
Maintaining a high level of security of supply during the clean energy transition needs tobe a priority for the government and an integral part of the country’s decarbonisation plans.
The Minister of the Ecological Transition needs to strengthen the oversight on security ofthe energy transition and bring together the stakeholders necessary for managing possible
crises across the energy supply chains and infrastructure. Key questions relate to theshort- and medium-term electricity adequacy and the medium-term transition of France’s
oil and gas infrastructure and related security risks. Besides, the government also needs
to increase preparedness to address new threats, stemming from more frequent extreme
weather events or cybersecurity risks, but also the availability of critical minerals andmetals indispensable for clean energy transitions. The new analysis of critical minerals
presented by the government is welcome and should trigger domestic and global actions.

ENERGY INSIGHTS

1. EXECUTIVE SUMMARYElectricity security will be at the heart of the clean energy transition. It cannot be excluded
that ensuring adequacy and reliability may require adjustments in the pacing of the
anticipated policy measures, including the schedule of closing nuclear reactors. In the2019 Energy and Climate Law, France committed to closing its remaining coal-fired power
plants in 2022, and depending on the evolution of electricity demand, 14 nuclear reactors,
to reach a share of 50% of nuclear in its power mix by 2035, while almost tripling renewableelectricity generation.
If the deployment of renewables and related flexibility needs is not ramped up quickly
enough through prioritising execution and implementation, the objective of closing
14 nuclear reactors may be difficult to achieve while preserving capacity margins. France
has taken leadership in developing demand response across the electricity markets andbenefits from a well-interconnected power grid. However, neighbouring countries are also
going through deep energy transitions, indirectly also affecting France.

France is making hydrogen a top priority with its national hydrogen strategy that focuseson industry and heavy-duty transport, underpinned by EUR 7 bln in public funding. The
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France’s aging nuclear fleet will need to be modernised for long-term operation, provided
safety is guaranteed, to support a secure and affordable energy transition. Major
uncertainty remains around the future of nuclear new build and its long-term contribution
to France’s emissions reduction objectives. As in all countries entering a transition of theelectricity system with the development of higher shares of renewables, power system
operations will also require an incremental need for flexibility and diversity during theperiod of 2021-25, over which adequacy imbalances may occur. RTE will, in particular,need to ensure that sufficient flexibility is available during winter peaks, which should bereflected in the PPE, which already includes targets for demand response. Electricity
security will need to be carefully monitored and the flexibility portfolio enlarged, notably bycompleting the legal framework for energy storage, including hydro, and boosting smart
grids and dynamic pricing.

1. EXECUTIVE SUMMARY

government focuses on developing an industry and French expertise in a new technology.
The government should use the opportunities from regional hydrogen hubs across Europe
to keep up the important momentum for the development of the technology in France andboost the potential to utilise hydrogen as a new energy carrier and provider of long-term
energy storage in the energy system.
France has strengthened gas security with the merger of the gas exchanges in 2018 andthe latest reform of gas storage. Maintaining oil and gas security remains a major
challenge, as the transition accelerates. France’s industry is already investing inbiorefining and low-carbon fuel supply chains, based on ambitious targets for biomethane,biogas, hydrogen and second-generation biofuels. The government should accompany
the capacity of the industry to adapt and support the affordability of the transition, including
by making the best use of existing infrastructures. The planned strategy on oil and gas in
the transition is a welcome step. In this context, the government should carefully monitor
the impacts of a rapid shift in oil products consumption on the security of supply, including
the future of the service station network, notably in rural areas of France.

Key recommendations
The government of France should: Increase implementation focus and policy certainty to accelerate private investment tomeet energy and climate targets, avoiding any contradicting signals. Adopt regularprogress review points for all measures and strengthen implementation capacity
across government, co-ordinated by the prime minister.
 Ensure consistency of 2030 targets with the updated National Low-Carbon Strategy
and multiannual energy plan, underpinned by new EU ambitions, socio-economic
analysis and technology/innovation roadmaps. Introduce clean energy technology
budgets to leverage higher private investments.
 Align national and regional targets, policies and regulations; reduce administrative
barriers and streamline procedures; and provide for additional action critical to closing
delivery gaps and achieving a sustainable, secure and affordable energy mix.
 Building on the green budget approach, scale up the mainstreaming of climate
objectives into taxation, government expenditures and regulations across government
to improve the cost-effectiveness of the energy transition.

 Introduce an energy-system approach across key energy carriers (electricity,
decarbonised gases, heat) and networks, including interconnections to neighbouring
countries. Facilitate close co-operation between the gas and electricity system
operators, industry stakeholders, and regulators. In this context, leverage the nationalhydrogen strategy for developing a new energy carrier and provider of long-term
energy storage.
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 Clarify the ambitions for the closure and long-term operation of existing and theconstruction of new nuclear reactors in France, including financing mechanisms to
mitigate uncertainties on the path towards net zero to support an affordable,
sustainable and secure electricity mix.

Key data (2020 estimated)
Total energy supply (TES): 217.8 Mtoe (nuclear 42.3%, oil 28.3%, natural gas 16.1%,
bioenergy and waste 7.7%, coal 2.5%, hydro 2.5%, wind 1.6%, solar 0.6%, geothermal 0.2%),-7.8% between 2010 and 2019, -10% between 2019 and 2020

ENERGY INSIGHTS

2. General energy policy

TES per capita: 3.2 toe/cap (IEA average: 3.8 toe/cap)
TES per unit of GDP:* 81 toe/USD million PPP (IEA average: 91 toe/USD million PPP)
Energy production: 119.5 Mtoe (nuclear 77.1%, bioenergy and waste 13.2%, hydro 4.5%,
wind 2.9%, solar 1.1%, oil 0.6%, geothermal 0.4%), -3.3% between 2010 and 2019, -8.9%
between 2019 and 2020
Total final consumption (TFC) (2019): 105.1 Mtoe (residential 39.3%, industry 30.4%,transport 30.3%), -3.9% since 2009
* GDP data are in billion USD 2015 prices and PPP (purchasing power parity).
Note: 2020 data are impacted by the energy demand and supply shock of the COVID-19 pandemic and is a break inhistoric series.

Country overview
With a territory of 549 087 km2, France is the largest country in the European Union (EU)and shares borders with Germany, Belgium, Luxemburg, Switzerland, Italy, Monaco,
Andorra and Spain. It borders the Mediterranean Sea, the Channel and the North Sea, theRhine, and the Atlantic Ocean. France has the second-largest maritime area in the world,
behind the United States, with 11 million km2 of exclusive economic zone and around
500 ports. The 12 state seaports handle more than 80% of France’s maritime freight traffic.

France is the second-most populated country in the EU (Eurostat, 2020), with 67 million
people in 2020. Around 2 million people live in Paris, the capital city. The population growsby 0.3% per year (INSEE, 2020) and has a relatively high density of 119 inhabitants per
km2 in 2019, compared with the EU average of 34 inhabitants/km2. Life expectancy is also
one of the highest in the world, at 85.6 years for women and 79.7 for men (INSEE, 2020).
France is praised for its high standards of living thanks to a well-educated and skilledworkforce, high environmental standards, and middle average income inequality (OECD,2019).
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France is administratively divided into 18 regions: metropolitan France with 13 regions(64.8 million inhabitants) and 96 administrative departments plus 5 overseas territories(2.1 million inhabitants) (Figure 2.1).

2. GENERAL ENERGY POLICY

Figure 2.1 Map of France

Political structure
France is a semi-presidential republic, as defined by the Constitution of 4 October 1958
that gave birth to the Fifth Republic. The executive power is held by the head of state (thepresident) and the government (under the authority of the prime minister). The president
is elected for a five-year term and can serve for two consecutive terms if re-elected. The
legislative power is in the hands of the Senate (348 senators) and the National Assembly(577 deputies). The next presidential elections are scheduled for 2022.

France is committed to active international co-operation within the European Union, theG7 and G20, and the United Nations, among others. It plays a significant economic anddiplomatic role, notably in the area of climate change and the United Nations Framework
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President Emmanuel Macron was elected on 7 May 2017. He is the founder of the centrist,
liberal and pro-European political movement “La République En Marche” (LREM).
Edouard Philippe served as his first prime minister until 3 July 2020, when a new
government was formed, with Jean Castex as prime minster. Since July 2020,
Barbara Pompili is the Minister of the Ecological Transition, in charge of energy matters.

Convention on Climate Change (UNFCCC) (Paris Agreement and the “Race to Zero”). A
founding member of the European Coal and Steel Community, the European Economic
Community, and the European Union, France also joined the Organisation for Economic
Co-operation and Development (OECD) in its early days in 1961, and the International
Energy Agency (IEA) in 1995. During the first half of 2022, France will assume thePresidency of the Council of the European Union.

Economy of France
France is the seventh leading economy in the world, with a gross domestic product (GDP)reaching more than United States dollar (USD) 3.4 trillion in 2019 (OECD, 2021a). In 2019,the unemployment rate was 8.4% (OECD, 2020). France attracts capital thanks to its
leading economic and political position in the EU and its developed infrastructures. In
2019, public administration services, defence, education, health and social work
accounted for the largest share in GDP (in terms of share of real value added) with 21.9%.
The second-largest sector is trade (17.7%), followed by the industry and energy sector(13.5%) (OECD, 2021a). Tourism accounted for 7.4% of GDP in 2018 (CEDEF, 2021).
France was the most visited country in the world in 2018, with more than 89 million
international tourists.

ENERGY INSIGHTS

2. GENERAL ENERGY POLICYThe COVID-19 pandemic strongly hit France, including services, tourism, trade andindustry, leading to lockdowns and restrictive sanitary measures that caused an estimatedfall in economic activity of 9.1 points of GDP in 2020 (OECD, 2021b). France’s key priority
has been saving lives while minimising the economic costs of the pandemic. France’s GDP
is yet expected to recover from the crisis, with an economic growth of 5-6% in 2021 (above
world average estimations; IMF, 2020a) and 4% in 2022 depending on the evolution of thepandemic and related containment measures. The policy response to the pandemic has
provided strong support for the economy thanks to multiple fiscal, budgetary andinvestment plans (OECD, 2020), including green stimulus measures.
The 2019 OECD Economic Survey of France (OECD, 2019) found that the country’s heavy
tax burden hampers economic growth and stifles the capacity of the business sector
to create new jobs and investment. It also limits the capacity for government to use tax
policies to steer behaviour. Social acceptance of additional taxes reached a limit, as shownby prolonged protests during 2018-19, when excise taxes on motor fuels and their related
carbon component both increased.

Energy supply and demand

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In 2019, France produced about half of its total energy supply (TES) domestically(Figure 2.2). Domestic energy production mainly consists of nuclear energy (79%),
bioenergy (13%) and other renewables (including a large role of hydro with 3.7%). Nuclear
accounted for 43% of TES in 2019, followed by imported oil (29%), natural gas (15%) anddomestically sourced bioenergy (7%). On the demand side, oil still covered 44% of total
final consumption (TFC) in 2019, followed by electricity and natural gas. Buildings were
responsible for 39% of TFC, followed by transport and industry, each accounting for 30%
of TFC.

2. GENERAL ENERGY POLICY

Figure 2.2 Overview of France’s energy production, supply and consumption, 2019
250

Mtoe

Bunker oil

200

Transformation and losses

Imports

150

Industry100
500Production

Total supply

TFC (by fuel)District heat
Electricity
Other renewables*
Bioenergy and waste

Transport

Natural gas

Buildings

Coal

TFC (by sector)

Oil
Nuclear
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French production secures almost half of total energy supply. Oil, electricity and natural gas
account for most of energy consumption. Buildings have the highest energy demand.
* Other renewables includes hydro, wind, geothermal and solar.
Notes: Total supply includes total energy supply plus international bunker fuel. Buildings includes residential and commercial and public
services buildings.
Note: Mtoe = million tonnes of oil equivalent. TFC = total final consumption.
IEA (2021), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

SupplyTES was 217.8 million tonnes of oil equivalent (Mtoe) in 2020. It decreased by 8% between
2010 and 2019, and by 10% between 2019 and 2020, as an effect of the COVID-19
pandemic (Figure 2.3). The share of nuclear was stable in the last decade. Oil, the second
energy source in TES, accounted for 28% in the same year. Renewables (including
bioenergy, hydro, wind, geothermal and solar) increased by 23% from 2010 to 2020, while
the supply of coal decreased by 55% and natural gas fell by 18%. The decrease in coalsupply reflects a fall in electricity production from coal (-81% in the period 2010-20).
Figure 2.3 Total energy supply in France by source, 2000-20
275
250
225
200
175
150
125
100
75
50
25
0
-25

Mtoe

Other renewables*
Bioenergy and waste
Hydro
NuclearNatural gas
Oil
CoalElectricity exports
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Between 2010 and 2020, the supply of coal decreased by 55% and natural gas fell by 18%.
Note: Mtoe = million tonnes of oil equivalent.
Source: IEA (2021), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

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* Other renewables includes wind (3.0 Mtoe in 2019), solar (1.2 Mtoe), geothermal (0.5 Mtoe) and tide (0.04 Mtoe).

Out of 120 Mtoe in 2020, nuclear covered 77% of domestic production, but it decreased
by 17% in the period 2010-20. Bioenergy and waste accounted for 13% (a 2% increasein 2010-20) and hydro for 4.5% (a 1% decrease in 2010-20) (Figure 2.4).
France imports all its needs of coal and gas, as the domestic production of coal ended
in 2004 with the closure of the La Houve coal mine. Only 1% of oil supply was produced
domestically in 2020. The ratio between energy produced domestically and total energy
supply was mostly stable between 2010 and 2020.
Figure 2.4 France’s energy production by source, 2000-20
140

Mtoe

120

Other renewables*

100

Hydro

80

ENERGY INSIGHTS

2. GENERAL ENERGY POLICY

Bioenergy and waste

60

Natural gas

40

Oil

20

Coal
Nuclear0

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Nuclear is the main energy source of domestic energy production (77%). Bioenergy andwaste (13%) comes second, followed by hydro (4.5%).
* Other renewables includes wind (3.0 Mtoe in 2019), solar (1.2 Mtoe), geothermal (0.5 Mtoe) and tide (0.04 Mtoe).
Note: Mtoe = million tonnes of oil equivalent.
Source: IEA (2021), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Figure 2.5 Share of total energy supply produced domestically in France by energy
source, 2000-2060%

Total energy

50%

Oil

40%

Natural gas

30%

Coal

20%
10%
0%

IEA. All rights reserved

French domestic energy production covers half of its total energy supply. The country relies
heavily on imports for its fossil fuels supply.

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Source: IEA (2021), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

2. GENERAL ENERGY POLICYFrance produced 54% of TES in 2019 (Figure 2.4), with domestic energy production
consisting mainly of nuclear energy. Domestic coal production was around 20% of coalsupply two decades ago. Today, France imports all its coal needs, primarily from
Australia and the Russian Federation. Natural gas is entirely imported, mainly from
Norway and Russia. Oil is imported from Saudi Arabia, Russia, Kazakhstan, and othercountries with a smaller share (see oil section) (Figure 2.5).
France has the lowest share of fossil fuels among G20 countries (Figure 2.6) thanks tothe significant share of nuclear in its energy mix.
Figure 2.6 Share of total energy supply by source in G20 countries, 2019
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Solar
Wind
Bioenergy
Geothermal
Hydro
Nuclear
Waste
Natural gas
Oil
Coal
Fossil fuelsFrance had the lowest level of fossil fuels in its energy supply among G20 countries.
Source: IEA (2021), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Demand24

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TFC in France has slowly decreased, from 160 Mtoe in 2010 to 150 Mtoe in 2019, when
it reached its lowest level since 1994. France has witnessed an overall decoupling
between the growth of the country’s GDP and its final energy consumption (TFC/GDP
ratio), despite the population increasing by 4% between 2009 and 2019. France’s GDP
increased by 15% over the period, while energy intensity of GDP has declined by 16%
since 2009 (see Chapter 4). In 2019, energy demand for buildings covered more than athird of TFC (39%) (Figure 2.7). Energy demand for industry and transport was 30% of
TFC for each sector. Since 2010, energy demand in buildings saw the sharpest decline,
decreasing by 14% (from 68 Mtoe in 2010 to 59 Mtoe in 2019). Over the same period,
industry energy consumption fell by 4% (from 48 Mtoe to 46 Mtoe). The only increase
was in transport (4%).

Figure 2.7 Total final consumption in France by sector, 2000-19
180

Mtoe
Industry*

160

Transport

140

Buildings**

120
100
80
60
40
20
0

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reserved.

ENERGY INSIGHTS

2. GENERAL ENERGY POLICY

Total final consumption has been slowly decreasing since 2010, reaching a minimum at
150 Mtoe in 2019, while transport sector demand was still rising.
* Industry includes non-energy demand.
** Buildings includes residential and commercial and public services buildings.
Note: Mtoe = million tonnes of oil equivalent.
Source: IEA (2021), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Figure 2.8 Total final consumption in France per sector and per fuel, 2019
Industry*

39%

5%

26%

24%

Oil

4%

Natural gas

3%
Transport

91%

Buildings**

12%

29%

2%

7%

12%

Electricity

1%
Total

44%
0%

20%

20%
40%

25%

8%
60%

80%

Bioenergy and waste
Other renewables***

4%

43%

Coal

2%
100%

Heat

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Oil, natural gas and electricity were the main fuels consumed in France in 2019.
* Industry includes non-energy demand.
** Buildings include residential and commercial and public service buildings.
*** Other renewables includes hydro, wind, geothermal and solar.
Source: IEA (2021), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

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Oil covered 44% of energy demand in 2019, mainly in transport and industry (Figure 2.8).
Electricity accounted for a quarter of TFC, with the highest share in buildings (43%).
Natural gas comes third and is the second-most used energy source in industry andbuildings, accounting for more than a quarter in both sectors. Bioenergy and waste also
account for an important part (8%), especially in the buildings sector (12%).

2. GENERAL ENERGY POLICY

Key institutions
The French institutional landscape is shaped by the national, regional and local levels ofgovernment.
At the national level, policy making in energy, environment and climate is the competenceof the Ministry of the Ecological Transition (MTE). This super-ministry is also in charge oftransport, air quality, water, risk management and buildings. Within the ministry, theGeneral Directorate for Energy and Climate develops and implements the policies inenergy, climate and air quality. The MTE also directs regional ministerial services in theregions and departments. Its unique cross-disciplinary setting enables the MTE to work
together with other ministries not only on climate, biodiversity, clean air, technology andenergy taxation, but also on social issues, such as equality. Under the prime minister, thehigh commissioner for the plan (Haut Commissionaire au Plan) is in charge of planning
exercises across government.
In 2018, the High Council on Climate (Haut Conseil pour le Climat) was created, which
independently evaluates the government’s climate strategy and assesses theeffectiveness of the government’s policies. It publishes an annual progress report to thegovernment and the parliament, to which the government must officially respond.
When it comes to economic development (notably sustainable recovery) and thecompetitiveness of French industry, the Ministry for the Economy, Finance and theRecovery is the lead. The Higher Energy Council and the National Consumer Council(Conseil supérieur de l’énergie and Conseil national de la consummation) bring together
the main stakeholders in the sector. An important implementing authority for energy
efficiency, heat, renewable energy and energy innovation is the French Agency for
Ecological Transition (Agence de la transition écologique, ADEME). ADEME implements
public policies related to the environment, energy and sustainable development throughfunding programmes, including for innovation/demonstration, monitoring and evaluations.
Regional delegations of ADEME support the territories and the various authorities,
including with the development of thermal refurbishment platforms and regional energy
efficiency plans which would also involve renewable energy.
The MTE shares the responsibility for energy research, development and demonstration(RD&D) with the Ministry of Higher Education, Research and Innovation. ADEME, theNational Research Agency and the Banque Publique d’Investissement (Bpifrance) are themain RD&D funding agencies. The National Alliance for the Coordination of Energy
Research is an alliance of all research and training organisations in France in the energy
sector, led by the National Centre for Scientific Research, the Alternative Energies andAtomic Energy Commission, and the IFPEN (IFP Énergies nouvelles).

The French Competition Authority has the power to prevent and sanction anticompetitive
practices in any economic sector, including electricity and gas. It must inform the CRE
when seized of any matter that would fall under the CRE’s jurisdiction. The French
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The Energy Regulatory Commission (CRE) regulates the French electricity and gas
markets. It is financed by the state, with a EUR 20.9 million budget under the Finance Law.
An energy ombudsman provides consumers with information concerning their rights,
current legislation and the means of dispute settlement available to them in the event of aconflict.

Competition Authority must also notify the CRE of any abuse of a dominant position or any
anticompetitive practice in the gas or electricity sectors.
Regions implement climate and energy transition goals under the regional plans for spatialplanning, sustainable development and equality (schémas régionaux d’aménagement, dedéveloppement durable et d’égalité des territoires, SRADDET). Based on the Energy
Transition for Green Growth Act of 2015, the SRADDETs include the regional
climate-air-energy plans developed at a sub-regional scale (plans climat-air-énergie
territoriaux, PCAETs). They are co-ordinated by the local authorities in the regions
including districts (intercommunalités). The regions support citizen’s projects orbusinesses, and are responsible for public transportation, waste and water management
at a local scale. They are also often the concession holders of the heating networks, aswell as gas and electricity distribution networks.

ENERGY INSIGHTS

2. GENERAL ENERGY POLICY

Energy transition strategy and targets
France has been an early leader in promoting the energy transition, with a cross-sector
planning system, anchored in the Energy Transition Law of 2015. Building on the energy
strategies and targets of the 2005 POPE Law (Loi n° 2005-781 du 13 juillet 2005 deprogrammation fixant les orientations de la politique énergétique) and the 2007-10
Grenelle Environment Acts, France has had a decade of experience in building an energy
transition framework to green economic growth towards 2030.
Reflecting France’s international climate change ambitions and leadership at COP21, theEnergy Transition for Green Growth Act (Loi relative à la transition énergétique pour lacroissance verte) entered into force on 17 August 2015. It was the result of the National
Debate on the Energy Transition, an intensive stakeholder consultation that ran fromJanuary to July 2013. The national debate discussed four potential transition pathways(“factor4” target which equals a 75% reduction of greenhouse gas emissions by 2050
compared to 1990 levels):
1.

DEC – decarbonisation through electrification

2.

DIV – diversification and moderate efforts for energy efficiency

3.

EFF – strong efforts for energy efficiency and diversification

4.

SOB – strong efforts for energy efficiency and sobriety and nuclear phase-out.

No consensus was found on the best pathway to implement. However, a generalagreement emerged from the pathway debate that the energy transition should be
economically profitable for France and lead to a strong cut in final energy demand andfossil fuel consumption, and that all no-regret options should be taken as soon as possible.

At the heart of the French energy transition policy, the National Low-Carbon Strategy
for 2050 (Stratégie Nationale Bas-Carbone, SNBC) sets emissions reduction targets bysector and the pathway across three five-year carbon budgets (see Chapter 3). Additional
measures are implemented through two successive five-year energy investment plans (la27

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The Energy Transition for Green Growth Act set the basis for emissions reductions (-40%by 2030 from 1990 levels), energy efficiency (with an envisaged reduction of 20% in TFC
by 2030 and 50% by 2050 from 2012 levels) and the share of renewable energies(targeting 23% in the gross final consumption by 2020 and 32% by 2030). These targets
have remained in place.

2. GENERAL ENERGY POLICY

programmation pluriannuelle de l’énergie, PPE) and an economy-wide carbon tax
trajectory. Sector roadmaps are under preparation and co-ordinated by the prime minister.
In 2019, France adopted the Energy and Climate Law (Loi n° 2019-1147 du 8 novembre
2019 relative à l’énergie et au climat). The 2019 Energy and Climate Law amended the2015 law, modifying some of the energy sector targets for the decade up to 2030, as
milestones for reaching climate neutrality by 2050 with an 85% reduction in greenhousegas (GHG) emissions (without land use, land-use change and forestry [LULUCF])
compared to 1990 levels and stressing the ecological and climatic urgency. The following
targets have been set:

the installation of 1 gigawatt (GW) of offshore wind per year by 2024
a slower reduction of the share of nuclear power production to 50% in the electricity mix
by 2035a more aggressive reduction of fossil fuel consumption to 40% (from 2012 levels) by 2030
and closing the remaining coal plants by 2022

a share of 20-40% of decarbonised and renewable hydrogen in France’s total hydrogenconsumption by 2030



activating 6.5 GW of demand response by 2028



providing for an increase in the threshold of maximum generation capacity that Électricitéde France (EDF) needs to offer to the market at the regulated access tariff (ARENH) of
EUR 42 per megawatt hour (MWh) from 100-150 terawatt hours (TWh)ending price regulation for industry by end of 2021 (electricity, gas) and by end of 2023 forhouseholds (gas).

In line with the climate neutrality by 2050 goal, the SNBC and the PPE were updated in2020 with new targets (Table 2.1). The next SNBC and PPE will be adopted in 2024. Theenergy programming law will be presented in 2023.

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The 2021 Climate and Resilience Law (Loi portant lutte contre le dérèglement climatiqueet renforcement de la resilience face à ses effets dite “Loi Climat et Résilience”) was
published on 24 August 2021. It prohibits domestic flights for short distances when a trainride of 2.5 hours offers an alternative; and abolishes badly insulated buildings (energy
sieves or passoires thermiques), with a timeline to prohibit the sale of houses with anenergy performance of G (by 2025), F (by 2028) or E (by 2034). The law also includes
provisions in favour of subsidies for electric bikes and the objective to reduce air pollution(particulate matter) from biomass heating by 50% from 2020 to 2030 in areas covered by
an atmospheric protection plan in France. The law empowers mayors to create
low-emission zones in major cities and ban the sale of the most polluting vehicles in 2030,
as well as to introduce an environmental footprint score for goods and services consumedin France. The law promotes a greater regionalisation of the next PPE.

Table 2.1 Main targets and policies and measures in the multiannual energy plan
2020
Policy area

2023

2028

Final energy consumption(compared to 2012)
Primary consumption of fossil fuels(compared to 2012)
Greenhouse gas emissions from energy combustion(compared to 1990)
Renewable heat consumption(compared to 2017)
Renewable gas production-7.6%-16.5%

-20%

-35%

-27%

-40%

+25%

+40-60%Installed RES-E capacity(compared to 2017)+50% or73.5 GW

24-32 TWh
+100% or101-113 GW

ENERGY INSIGHTS

2. GENERAL ENERGY POLICY

Note: RES-E = electricity from renewable energy sources. GW = gigawatt. TWh = terawatt hour.

Territorial and regional energy planning
Regions implement their climate and energy transition goals under the SRADDETs. At the
sub-regional level, districts (intercommunalités), which gather several municipalities,
prepare local PCAETs. Regional and local authorities and their respective publicestablishments have to take the SNBC strategy and its carbon targets into account, inparticular through their planning exercises (the SRADDETs and the PCAETs). Targets are
updated for every five-year carbon budget (see also Figure 2.9).
By October 2021, around 80% of the SRADDETs (nine schemes) have been approved.
The PCAETs were expected to be approved and in place by end of 2018. In 2021, theMTE announced that 224 PCAETs had been adopted. The government works on acommon methodology for an indicator framework based on consultation. The framework
will allow comparisons between territory plans and interactions and/or flows resulting fromconnecting activities.

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As indicated above, the Climate and Resilience Law of 2021 will add another dimension
and strengthen the regionalisation of the PPE to ensure stronger alignment between theabove-mentioned national goals of the SNBC and the PPE and the regional plans andtargets. The SRADDETs (and the climate-air-energy scheme in the Paris region) must
therefore take into account the SNBC and must be compatible with the next PPE (Article
83 of the Climate and Resilience Law). In the 2024 PPE, national renewable targets mustbe translated into regional targets through a national decree after concertation with
regional councils and the concerned stakeholders.

2. GENERAL ENERGY POLICY

Figure 2.9 National, regional and local plans for the energy transition

Note: PNSE = national environmental health plan. PPA = Atmosphere Protection Plan. PRÉPA = National Plan to
Reduce Air Pollutant Emissions. PNACC = National Plan for Adaptation to Climate Change. PPE = Ten-year Energy
Investment Plan. SNBC = National Low-Carbon Strategy. SRADDET = regional plan for spatial planning, sustainable
development and equality. SDRIF = Master Plan for the Île-de-France Region. SAR = regional development plan.
PLH = local housing programme. PLUi/PLU = local intercommunal planning plan. PDM = mobility plan. ScoT =territorial coherence scheme. PRSE = regional health environment plan.
Source: ADEME (2021), A diversity of approaches for a diversity of territories, www.territoiresclimat.ademe.fr/ressource/30-9.

EU Climate Law and the role of the National Energy
and Climate Plan
In 2020, France presented its final National Energy and Climate Plan (NECP) to the EU
under the EU Governance Regulation. By 2023, France will also have to update its NECP
in step with the EU net zero ambitions by 2050 and the EU Climate Law.

EU member states are also required to report on the implementation of their NECPs. The
first of such reports (so-called integrated national energy and climate progress reports) isdue by 15 March 2023. Any new policies and measures can be included in the progress
report.
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The EU Climate Law sets into legislation the objective of a climate-neutral EU by 2050,
and creates a system for monitoring progress and adjusting national and EU-wide action,
if needed. In line with the Paris Agreement, the EU Climate Law provides for a five-year
stocktaking process. The NECPs, which are regulated under the EU GovernanceRegulation, are at the heart of this process. In 2019/20, the first edition of NECPs was
adopted for ten years up to 2030. For the first time, by 2023, the European Commission
will assess progress. By 30 June 2023, member states are required to provide a draft
update of the NECP and by 30 June 2024, the final updated NECP.

In July 2021, the European Commission presented a range of proposals to implement thehigher emissions reduction ambition with the Fit-for-55% Package, including rules for the
reduction of GHG emissions (Effort Sharing Regulation and Emissions Trading System[ETS]) and proposals to revise the Energy Efficiency and Renewable Energy Directives,
including their target levels. The updated NECPs (by 2023/24) will have to reflect theseincreased climate and energy ambitions at EU level, once negotiations are finalised, as
well as the results of the national progress reports.

Energy and carbon pricing and taxation
Domestic taxes on the consumption of petroleum products, natural gas and coal (TICPE,TICGN, TICC) include a carbon component and an energy component. There is no carbon
component in the TICFE (the tax on final consumption of electricity), as power plants are
subject to the EU ETS. The carbon component is included within these domestic taxes on
domestic consumption of energy (ITC). The total ITC was planned to increase over time
(up to EUR 56 per tonne of carbon dioxide [t CO2] in 2020, EUR 86/t CO2 in 2022 andEUR 100/t CO2 in 2030), yet it has remained at EUR 44.6/t CO2 since 2018. Introduced
in 2014, the carbon component, referred to as the climate energy contribution (CCE), is amethod of calculating a part of domestic consumption taxes, proportionally to the CO2
content of energy products.

ENERGY INSIGHTS

2. GENERAL ENERGY POLICY

The ITC taxation significantly increased the taxes levied on the consumption of coal,heating oil, liquified petroleum gas, gasoline, diesel and natural gas over the period
2014-18. Table 2.2 illustrates the changes in the domestic taxes for some energy products.
For instance, the government accelerated the increase of the price of carbon for diesel,from EUR 42.84 in 2014 to EUR 59.4 per 100 litres (L) in 2018, leading to a better balanceof diesel and gasoline taxation. The carbon component tax (EUR 44.6/t CO2) is expected
to result in the reduction of 1.2 Mtoe in energy consumption and of 3.3 million tonnes ofcarbon dioxide equivalent (Mt CO2) per year. Domestic flights and kerosene consumption
are exempt from the ITC.

Energy and carbon taxation includes a number of reduced rates for freight (trucks over
7.5 tonnes), buses and coaches, and taxis. It also applies several exemptions (mostly forcommercial flights and navigation) or reduced rates of excise on energy products for
specific sectors, notably reduced rates for diesel use in agriculture, buildings and off-roadtransportation and a partial refund of the tax on diesel, natural gas and heavy fuel oil usedin agriculture. These amounted to around EUR 2.3 billion (bln) in 2019. The freight ofgoods alone received refunds of part of the fuel tax rate, at an overall cost of EUR 1.4 bln
in 2019.
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Though not subject to the carbon component, France levies a tax on final consumption ofelectricity at the level of EUR 22.5/MWh (since 2016), whose revenues go to the statebudget and no longer finance public service charges on energy (CSPE). In addition, thefinal retail price of electricity includes the fee for network operation and the wholesale priceof the energy component. Since 2016, revenues from the public service charges ofelectricity and gas are no longer used for financing renewable energies in the electricity
and gas sector. The support is now no longer financed based on the domestic electricity
tax, which goes directly to the state budget. As a result of this reform, changes in the costof supporting the development of renewable energy (in the gas and electricity sectors) nolonger increase the consumers’ bill, but are part of the state budget.

2. GENERAL ENERGY POLICY

Table 2.2 Evolution of domestic consumption taxes between 2013 and 2020
2013

2014
(1 April)

2015

2016

2017

2018

2019

2020

Electricity(no carbon
component)

13.5

16.5

19.5

22.5

22.5

22.5

22.5

22.5

Natural gas(households)(EUR/MWh)

Exempt

1.27

2.64

4.34

5.88

8.45

8.45

8.45

Coal
(EUR/MWh)

1.19

2.29

4.75

7.21

9.99

14.62

14.62

14.62

Diesel(EUR/L)0.42840.4284

0.4682

0.49810.53070.59400.59400.5940Gasoline E5(EUR/L)

0.60690.60690.62410.64120.65070.68290.68290.6829Gasoline E10(EUR/L)

0.60690.60690.62410.62120.63070.66290.66290.6629Heating oil(EUR/L)0.56600.56600.76400.96300.11890.15620.15620.1562

Heavy fuel oil(EUR/kg)

0.18500.21900.45300.68800.95400.13950.13950.1395

Note: MWh = megawatt hour. L = litre. Kg = kilogramme.
Source: MTE, 2021

France’s taxes on transport fuels (see Chapter 10) are the lowest among IEA countries.
However, a few important changes are under way:

 France almost doubled the plane ticket tax in 2019 (for a ticket in economy class, from

EUR 1.13 to EUR 2.63 for intra-EU flights, and from EUR 4.51 to EUR 7.51 for extra-EU
flights) and earmarked additional revenues (up to EUR 230 million) to support rail
infrastructure.

 France increased the tax on road freight carriers (EUR 0.02/L on diesel use) as of January2020.

 France increased the tax on aviation gasoline used for non-commercial uses in order toreach road rates for gasoline within two years (from EUR 0.45/L, EUR 0.49/L to EUR 0.68/L,
EUR 0.69/L) as of January 2021.

 France will limit the reduced electricity tax rate to data centres as of January 2022.
 France will increase taxes on diesel for off-road uses to the level of the on-road rate fordiesel (from EUR 0.1882/L to EUR 0.5940/L) as of January 2023.

In September 2020, France was the first country to conduct a first assessment of theenvironmental impact of the 2021 Budget Bill, by using the six criteria of the EU taxonomy.
The EU Taxonomy Regulation established six environmental objectives: 1) climate change
mitigation; 2) climate change adaptation; 3) sustainable use and protection of water andmarine resources; 4) the transition to a circular economy; 5) pollution prevention andcontrol; and 6) the protection and restoration of biodiversity and ecosystems (Ministry for
the Economy, Finances and the Recovery, 2021).
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Green budgetingAround 90% of the EUR 574 bln 2021 budget is considered neutral to the environment(which includes payroll expenditures and social transfers to households). Only EUR 38 bln
were assessed as strictly favourable, notably support to renewables (EUR 6.6 bln),
expenditures to support the energy transition (energy efficiency bonus, EUR 0.8 bln;
reduced value-added tax rate of 5.5% for energy efficiency improvements, EUR 1.2 bln;
reduced tax rate on electricity used for public transport, EUR 0.2 bln; official development
assistance, EUR 1.9 bln; water agencies’ expenditures, EUR 2.2 bln). With around
EUR 4.7 bln of mixed impact (mainly related to transport infrastructure, notably new
railway infrastructure, which is good for climate but possibly harmful regarding land use
and biodiversity), only EUR 10 bln were found unfavourable. These were mainly fiscal
expenditures (EUR 7.2 bln), such as exemptions or reduced rates for domestic taxes on
the consumption of motor fuels (EUR 5.1 bln), or expenditures to support energy
production (using fossil fuels) in areas that are not connected to the national grid
(EUR 1.5 bln).

ENERGY INSIGHTS

2. GENERAL ENERGY POLICYThe Budget Bill 2020 promoted a process of further streamlining tax provisions through a
new code gathering all taxes on energy as well as other excise duties and sectorial taxes,
which will see further revisions in line with the revision of the EU Energy Taxation Directive.

People-centred transition
France is working actively on policies that place the people at the centre of the ecologicaltransition in line with the Sustainable Development Goals (SDGs), notably with regard togender diversity (SDG 5), sustainable recovery and climate action.

Sustainable recovery
France has a competitive energy industry and the energy sector can be a backbone for a
resilient economic recovery and the long-term sustainability of the French economy. While
nuclear and the oil and gas sectors account for the lion’s share of employment in theenergy sector, the renewables sector, notably wind and solar, have seen dynamic growthin jobs and investments. Based on the SNBC and the PPE, around 300 000-500 000 new
jobs by 2030 and 800 000 by 2050 are expected to be added, boosted by investments intransport, buildings and energy.

Compared with selected countries, France’s Recovery Plan has a strong net green impact
in support of an acceleration of clean investments (Figure 2.10). France presented
stimulus measures for a green recovery, totalling EUR 30 bln, with a huge focus ontransport (rail), buildings (heating, efficiency) and the circular economy, which represents
additional funding to existing support schemes in place for the PPE, including renewableelectricity and renewable gases (in total EUR 24 bln and EUR 10 bln, respectively). The
recovery funding comes in addition to investments planned under the PPE and FinanceLaw 2020, which provide EUR 24 bln for renewable electricity and EUR 10 bln forrenewable gas up to 2028.
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In 2020, the COVID-19 crisis and related lockdowns led to the destruction of demand intransport, notably in aviation, industry and commercial sectors in France, key sectors of
the SNBC. In September 2020, the government adopted a EUR 100 bln Recovery Plan.
The National Recovery and Resilience Plan outlines the 40% funding share anticipated by
the EU’s “Recovery and Resilience Facility”.

2. GENERAL ENERGY POLICY

Climate negative (-)

Green (+)

Figure 2.10 Recovery plans towards a sustainable transition, France and other IEA
countries
100%% of GDP
80%
60%
40%
20%
0%
-20%
-40%
-60%

Other
Buildings
IndustryPower
Air transport
Transport
Net green

Note: Y-axis in percentage of gross domestic product shows climate positive (+) and climate negative (-) investment.
Battery energy storage (R&D) investment support counted under transport.
Source: IMF (2020b), Fiscal Monitor: Policies for Recovery,
https://www.imf.org/en/Publications/FM/Issues/2020/09/30/october-2020-fiscal-monitor.

Rail transport will be upgraded with a view to reduce highway freight transport, in addition
to investment in new railroad infrastructure (EUR 1 bln by 2024 and 12 bln in 2025-30). As
part of the French Recovery Plan, the government announced a public investment of
EUR 7 bln for the hydrogen strategy and an additional stimulus of EUR 6 bln for therenovation of buildings. Specific budgets under the Finance Law 2021 include expanded
support for building renovation (MaPrimeRénov’ now supports energy efficiency inbuildings, rental property and heating across all income classes), higher subsidies for theprivate purchase of electric vehicles (EVs) and new tax credits for the installation of EV
chargers at home.

Citizens’ engagement in climate action
In 2018, France experienced major social movements and protests (“gilets jaunes” oryellow vests) and citizens’ voice for stronger climate action (climate marches, student
strike for the climate). Since then, France has enacted several policies to empower citizens
in the climate debate, notably the Citizens’ Climate Convention. In the spirit of a just andinclusive ecological transition, the Convention brought together 150 citizens that proposed
around 150 new measures to achieve a reduction of at least 40% in GHG emissions by
2030 (compared to 1990 levels). The proposals form part of the Climate Resilience Act of2021.
As part of the carbon tax freeze, the government adopted new provisions, which offer
financial support to consumers, including broader scope for the energy voucher, thesubsidy for renovation (MaPrimeRénov’), the car conversion bonus, the heat bonus and asimplified eco-tax. Additional measures were introduced in 2020 under the Recovery Plan.

Gender equality has been designated a “great cause” of Emmanuel Macron’s 2017-22
presidential mandate. Working across government, the president appointed a Secretary ofState for Gender Equality.

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Gender diversity

The MTE implements this policy mandate, including by tracking progress along 15 key
indicators, which include access to leadership positions or equality in terms of
remuneration and promotion. Within the MTE itself, the gender diversity of the workforce
increased from 35% of women in 2009 to 43% in 2019.
France’s 2011 Law on Balanced Representation of Women and Men within Administrativeand Supervisory Boards put in place a quota, mandatory since 2017, of 40% members of
the under-represented sex on the boards of companies with more than 500 employees
and whose sales revenues exceed EUR 50 million. Sanctions are planned in case ofnon-compliance.
The French work code allows companies to take temporary measures specifically targeting
women, in terms of recruiting, training and promotion, as a way to improve equal
opportunities.
The 2018 Law for the Freedom to Choose One’s Professional Future was the driver for
mandatory disclosure and data transparency on gender diversity in the energy sector. A“women-men equality index” is mandatory for every company with at least 50 workers
since March 2020 and was mandatory from March 2019 for companies with at least
1 000 workers (which covers the energy industry). The index is calculated and publishedby the companies every year based on five indicators: 1) gap of remuneration between
women and men; 2) gap in annual wage increases; 3) gap in terms of careeradvancement; 4) wage increases after maternity leave; and 5) women represented in the
top salary scales.

ENERGY INSIGHTS

2. GENERAL ENERGY POLICYThe French energy industry promotes gender diversity and a positive dynamic can be seenin the sector. The 2019 and 2020 indexes show improvements: EDF went from a score of
80 to 95, ENGIE from 79 to 94 and Total from 85 to 90. EDF targets an increase in theshare of women staff to 28% in 2023 (compared to 25% in 2019); and more specifically,
30% of women in its executive committees by 2023, compared to 27% in 2019. ENGIE
has the “Fifty-Fifty” project, which targets 50% of women in senior management positionsin 2030 (compared to 24% in 2019).

Assessment

Since 2015, France has had a robust energy transition framework, with an economy-wideplanning system, anchored in the Energy Transition for Green Growth Act. The National
Low-Carbon Strategy for 2050, introduced by the Energy Transition for Green Growth Act,
is France’s roadmap to reduce GHG emissions, which is complemented by the biannual
five-year investment plan with measures until 2028. In 2019, France adopted the Energy
and Climate Law, which legislated the ambition of climate neutrality by 2050. Over the past
five years, the government has adopted an increasing number of targets for fuels andsectors, including at local and regional levels, without them necessarily being aligned or instep with technological progress, socio-economic analysis or affordability concerns. Many
countries are struggling with similar challenges.

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As host of the COP21 and the Paris Agreement of 2015, France has stepped up its
international and domestic commitments since the IEA’s last review in 2015. France iswidely seen in the international community as a frontrunner in the energy transition debate.

2. GENERAL ENERGY POLICY

In 2021, the government will start work on a third update of the SNBC and the PPE for
publication in 2024, after the 2022 presidential elections, which will also need to reflect
higher ambitions under the EU Green Deal and EU Climate Law, targeting at least a 55%
reduction already by 2030. The French government should consolidate its targets as it
moves towards implementing its climate neutrality pathway for 2050.
First, France needs to review the alignment of its 2030 national targets with the national
climate neutrality goal. France has not upgraded its 2030 target, set in 2015 and stipulating
a 40% reduction in GHG emissions by 2030, even though the government adopted the2050 goal and updated its SNBC and PPE in 2020. In relative terms, France has the least
stringent 2030 emissions target among G7 countries, but of course it has the lowest CO2
emissions in absolute terms. Similarly, the government may wish to review its pledge forending the sale of new light vehicles using fossil fuels by 2040. Many other countries now
have more ambitious transport decarbonisation ambitions; for instance, theUnited Kingdom’s target is 2030. Equally, incentives and roll-out targets need to bealigned. The new Climate and Resilience Law includes a 2030 target, which is a strong
signal for the market.
Second, there is little alignment between the national goals and the regional or local targets
and objectives. The government does not mandate climate and energy objectives forregional plans; rather, regional plans need to be consistent with national ones. The
government works to support the development of the PCAETs and SRADDETs, which
includes consultation between national and local government bodies. The Citizens’
Climate Convention and the Climate Resilience Law call for stronger links between
regional schemes and national goals, with minimum objectives consistent with the PPE foreach region, and for the state and regional councils to work together. The role of the HighCommissioner for the Plan could be strengthened to improve the consistency of theseplans. The national government’s initiative to prepare a report for end of 2021 on thecontribution of the regional strategy plans to the achievement of national climate objectives
is an early opportunity to look for emerging overlaps and gaps across all the regional
commitments.

Fourth, in the new SNBC, the government needs to update the possible contributions ofbiomass; carbon capture, utilisation and storage; and decarbonised gases, based on thelatest technological progress. For example, the national hydrogen strategy focuses on
industry and heavy-duty transport. In its current form, this hydrogen strategy primarily
serves as an industrial policy, aimed at developing French expertise in this newtechnology. However, France has a substantial potential to utilise hydrogen as a newenergy carrier and provider of long-term energy storage in its energy system.

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Third, a very strong focus on accelerating implementation and execution is critical anddepends on the success of reducing red tape; on the effectiveness of cross-governmental
co-ordination; and on progress at the regional, local and city levels. The focus on
implementation will also require an increase in human resources dedicated to the transition
across all levels of government and better co-ordination. France needs to focus more on
the design of robust policies for clean energy investments with stable and morestreamlined market-compatible support schemes (e.g. contracts for difference), which
lowers risks and supports technology scale-up and accelerates deployment. The
government can build on the lessons learnt from other countries in this context and explore
opportunities to expand green recovery funding.

The SNBC strongly relies on medium-term priorities of energy sobriety and low-carbon
electricity (up to 2035) as the main mitigation measures. However, it does not yet provide
for a clear picture for 2040 and the clean energy technology or fuel options by sector. A
clean energy technology roadmap could accompany the SNBC/PPE framework to identify
pathways and technology choices, job creation opportunities, and inform investment
decisions and track progress. The Programming Plan on Jobs and Competences (PPEC)
and the National Strategy on Energy Research will need to be aligned with the PPE. The
PPE can then set out annual green budgets, including for energy efficiency, even for alonger period.
Fourth, France will need to rebalance its energy policy priorities towards not only asustainable, but also a secure and just transition. France has a competitive and highly
skilled energy industry. The energy sector can be a backbone for a resilient economic
recovery. While nuclear and the oil and gas sectors account for the majority of employment
today, the renewables sector, notably wind and solar, has seen dynamic growth in jobs
and investments. This is projected to accelerate with the creation of 300 000-500 000 new
jobs by 2030 and 800 000 by 2050, boosted by investments in transport, buildings andenergy. The government encourages gender diversity and the industry is working on theimplementation of mandatory targets, with improved results in government and industry.

ENERGY INSIGHTS

2. GENERAL ENERGY POLICYFrance made available considerable funds in support of its ambitious transition goals under
the French Recovery Plan, with EUR 100 bln in total, out of which around EUR 30 bln isdedicated to sustainable recovery objectives. Specific budgets under the 2021 Finance
Law include increased support for building renovation (MaPrimeRénov’ now supports
energy efficiency in buildings, rental property and heating across all income classes),higher subsidies for the private purchase of EVs and additional tax credits for the
installation of EV chargers at home. The Recovery Plan is a historic opportunity forboosting France’s industrial competitiveness and accelerating the implementation of
medium-term energy and climate targets and supporting a people-centred transition. To
implement the plan successfully, the government should continue all efforts to simplify
support schemes based on what worked well to leverage large-scale projects, catalyseprivate investments, including in electric mobility, low-carbon residential heating, hydrogenand batteries.

France’s energy and carbon taxation allows exemptions for fossil fuel consumption invarious economic sectors, for example domestic air transport, agriculture and roadtransport, which are eligible for partial reimbursements. France still has opportunities for
reducing such indirect fossil fuel subsidies and for integrating climate across its energy
taxation and exploring improvements in streamlining, transparency, fairness, stability and

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France is an international leader in climate finance, green finance, green budgeting andtaxation. Since 2014, France puts a price on carbon both through the EU ETS and througha national excise duty on the consumption of energy products based on their CO2 content.
The tax increased from EUR 7 to EUR 44.6 per t CO2 in 2018, but a further increase wasdiscarded amid social unrest. France’s prices will be driven by the overall carbon price inthe EU, which breached its historic peak of EUR 60 per t CO2 in 2021. This carbon pricewill be further strengthened with the planned reforms of the EU ETS, non-ETS, the EU
border carbon tax. While this supports investments in clean energy technologies andlowers the carbon footprint of EU imports, the impacts on the just transition will need to be
managed.

2. GENERAL ENERGY POLICY

predictability. The annual Green Budget report to parliament, carried out for the first timein 2020, will be an important tool and figures among best practice globally.

Recommendations
The government of France should:
 Revisit 2030 ambitions and consolidate sector and fuel targets to align to net zero andthe new EU 2030 emissions reduction target. Identify additional measures and regional
efforts to achieve the revised ambitions.
 Strengthen the National Low-Carbon Strategy for 2050 and the two successive
five-year energy investment plans by identifying clean energy technology budgets out
to 2040 and 2050 to leverage more public and private investments and reflect theopportunities to boost industry development, job creation and the just transition.
 Accelerate the implementation of energy and climate policies by ensuring more
stringent co-ordination of the sectoral roadmaps, national and regional plans under theprime minister; with more human resources in ministries and regional bodies; andannual progress reviews of all of the measures against their stated targets.

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 Align the carbon budget and the green budget approach and mainstream climate
objectives into taxation, government expenditures and regulations across government,
reducing overlapping instruments and abolishing exemptions that encourage wastefulfossil fuel consumption.

References
ADEME (2021), A diversity of approaches for a diversity of territories, www.territoiresclimat.ademe.fr/ressource/30-9.
CEDEF (Economics Finance Documentation Centre) (2021), Official Tourism Statistics,
Ministry for the Economy, Finance and the Recovery, Paris,
www.economie.gouv.fr/cedef/statistiques-officielles-tourisme (accessed on 14 April 2021).
Eurostat (2020), First population estimates, News Release No. 111/2020,
https://ec.europa.eu/eurostat/documents/2995521/11081093/3-10072020-APEN.pdf/d2f799bf-4412-05cc-a357-7b49b93615f1.
HCC (High Council on Climate) (2021), France Recovery: What Contribution to the LowCarbon Transition, www.hautconseilclimat.fr/wpcontent/uploads/2020/12/hcc_rapport_renover_plan_de_relance.pdf.
IEA (International Energy Agency) (2021), World energy balances, IEA World Energy
Statistics and Balances (database), Accessed on 10 September 2021
www.iea.org/statistics.

ENERGY INSIGHTS

2. GENERAL ENERGY POLICYIMF (International Monetary Fund) (2020a), France: Staff Concluding Statement of the2020 Article IV Mission, November.
IMF (2020b), Fiscal Monitor: Policies for Recovery,
www.imf.org/en/Publications/FM/Issues/2020/09/30/october-2020-fiscal-monitor.
INSEE (National Institute of Statistics and Economic Studies) (2020), [Tables of the French
Economy, Collection INSEE Références, www.insee.fr/fr/statistiques/4318291.
Ministry for the Economy, Finances and the Recovery (2021), Green budget: France is thefirst country in the world to measure the impact of state budget on the environment,
web page, www.economie.gouv.fr/budget-vert-france-1er-pays-monde-mesurer-impactbudget-etat-environnement#.
OECD (Organisation for Economic Co-operation and Development) (2021a), Grossdomestic product (GDP), GDP and Spending (database),https://dx.doi.org/10.1787/dc2f7aec-en (accessed on 8 January 2021).
OECD (2021b), Real GDP forecast, GDP and Spending (database),https://dx.doi.org/10.1787/1f84150b-en (accessed on 8 January 2021).
OECD (2020), OECD Economic Outlook, Volume 2020 Issue 2, OECD Publishing, Paris,
https://dx.doi.org/10.1787/39a88ab1-en.

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OECD (2019), OECD Economic Surveys, France 2019, OECD Publishing, Paris,
https://dx.doi.org/10.1787/a0eee144-en.

Key data (2019)
GHG emissions with LULUCF:* 412.6 Mt CO2-eq, -13.7% since 2010, -22.9% since 2000,
21.5% since 1990
GHG emissions without LULUCF:* 443.0 Mt CO2-eq, -13.7% since 2010, -19.8% since
2000, -19.0% since 1990
Energy-related CO2 emissions:
CO₂ emissions from fuel combustion (2020 estimated): 258.2 Mt CO2, -12.1% in 2019-20,-19.4% in 2000-19, -25.2% in 1990-2020
CO2 emissions by fuel: oil 58.8%, natural gas 28.8%, coal 9.8%, other 2.6%
CO2 emissions by sector: transport 42.8%, industry 23.9%, buildings 20.9%, electricity andheat generation 12.4%
CO2 intensity per GDP:** 101 g CO2/USD (IEA*** 195 g CO2/USD)
CO2 intensity per capita: 4.36 t CO2/capita (IEA*** 8.70 t CO2/capita)* Land use, land-use change and forestry (Source: UNFCCC).
** Gross domestic product in 2015 prices and purchasing power parity (PPP).
*** Weighted average of provisional data of IEA member countries in 2019.

ENERGY SYSTEM TRANSFORMATION

3. Climate change

As a global thought leader on climate change, France has long-standing ambitions of fully
decarbonising its economy. The government has pledged net zero emissions reductions
by 2050 under the 2019 Energy and Climate Law and put forward the necessary carbon
budgets under the updated National Low-Carbon Strategy (Stratégie Nationale
Bas-Carbone, SNBC) and the two successive five-year energy investment plans (laprogrammation pluriannuelle de l’énergie [PPE]). Its goal is to reduce greenhouse gas(GHG) emissions from energy production by 27% in 2023 and by 40% in 2028 comparedto the 1990 level. By 2019, France had achieved a reduction of energy-related GHG
emissions of 19% compared to 1990. Outside the low-carbon electricity mix, emissions
reductions envisaged in the transport, agriculture and buildings sectors are lagging behindand progress has been slow. The creation of the High Council on Climate, the Ecological
Defence Council and the Citizens’ Convention have increased the awareness of the needfor climate action in France, but the needed governance to assess and guide progress
towards the targets remain insufficient. During the COVID-19 pandemic, France’s
emissions decreased by 12% in one year. However, France also risks a rebound inemissions as the economy recovers. It is welcome that the Recovery Plan focuses onboosting investment in the ecological transition.

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Overview

3. CLIMATE CHANGE

In 2019, total GHG emissions, excluding emissions from land use, land-use change andforestry (LULUCF), amounted to 443 million tonnes of carbon dioxide equivalent(Mt CO2-eq.) (Figure 3.1). Energy, but also agriculture, plays a significant role in total GHG
emissions. As with other countries, the energy sector is the largest GHG emitter,accounting for 68% of the total in 2019, and has cut its emissions by 18% over the past
three decades. Between 2000 and 2020, total GHG emissions decreased by 20%, driven
mostly by the energy sector, thanks to the role of nuclear and a 62% increase in renewableelectricity generation.
Figure 3.1 Greenhouse gas emissions in France by sector, 1990-2019 and targets
600

Mt CO2-eq.

500

-20%

400

Industry processes*

-40%

200

Agriculture100

Net zero

0
- 100

-40%

-27%

300

Total emissions
targets
Energy emissions
targets
Waste

Negative emissions

1990

2000

2010

2015 2016 2017 2018 2019 2020 2023 2028 2030 2050

Energy
LULUCF
IEA. All rights reserved.

By 2020, total GHG emissions had decreased by 20% compared to 1990. Energy emissions
have remained constant since 2015, but will need to decline by 40% by 2028.
* Industry processes includes mineral, chemical, metal, manufacturing and construction industries.
Note: Mt CO2-eq. = million tonnes of carbon dioxide equivalent. LULUCF = land use, land-use change and forestry.
Source: UNFCCC (2020), France 2020 National Inventory Report, https://unfccc.int/documents/226401.

Energy-related CO2 emissions
France’s energy-related CO2 emissions from fuel combustion stood at 294 Mt CO2 in 2019,a decrease from 336 Mt CO2 over the decade since 2009 (Figure 3.2). After a decrease
from the buildings sector and electricity generation in 2014, energy-related emissions haveremained stable around 300 Mt CO2 in recent years. Between 2019 and 2020, emissions
dropped by 12% to 258 Mt CO2, as a result of the COVID-19 pandemic.

In terms of fuels, the majority of emissions in 2019 came from oil (59%), reflecting the highreliance on oil in transport, followed by natural gas (29%) and coal (10%) (Figure 3.3).
From 2009 to 2019, total emissions from oil consumption fell by 14% due to a downward
trend in oil use in the buildings and industry sectors. Emissions from natural gas
combustion stabilised at 86 Mt CO2, driven by energy demand in buildings. Coal emissions
gradually declined over the decade.

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The largest share of CO2 emissions in 2019 came from the transport sector at 126 Mt CO2(43%), followed by industry at 70 Mt CO2 (24%), buildings at 62 Mt CO2 (21%), andelectricity and heat generation at 37 Mt CO2 (12%). While the amount of CO2 emissions
from transport increased by 2% from 2009 to 2019, emissions decreased from electricity
generation by 29% and in the buildings sector by 28%.

Figure 3.2 France’s energy-related CO2 emissions per sector, 2000-20
400

Mt CO₂2020 estimated350

Electricity and heatgeneration
Buildings*

300
250
200

Industry**

150
100

Transport

50
0
IEA. All rights reserved.

Since a decrease in 2014, energy-related CO2 emissions have been stable; the decrease inemissions from power generation was compensated for by an increase in transport sector
emissions.
* Buildings includes residential, and commercial and public services.
** Industry includes CO₂ emissions from the combustion at construction and manufacturing industries,
agriculture/forestry, and fishing.
Note: Mt CO2-eq. = million tonnes of carbon dioxide equivalent.
Source: IEA (2021a), IEA CO₂ Emissions from Fuel Combustion Statistics (database), www.iea.org/statistics.

Figure 3.3 France’s energy-related CO2 emissions by source, 2000-19
250

Mt CO₂200

ENERGY SYSTEM TRANSFORMATION

3. CLIMATE CHANGE

Oil

150

Natural gas

100

Coal

50

Other*

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IEA. All rights reserved.

Oil and coal emissions have declined while emissions from natural gas have stabilised andare driven by energy consumption in buildings.
* Other includes emissions from non-renewable waste.
Note: Mt CO2-eq. = million tonnes of carbon dioxide equivalent.
Source: IEA (2021a), IEA CO₂ Emissions from Fuel Combustion Statistics (database), www.iea.org/statistics.

France’s gross domestic product (GDP) per capita increased by 15% from 2000 to 2019
while the population grew by 11% over the same period (Figure 3.4). Despite the increasein economic activity, energy-related emissions have decreased by 20% since 2000,
showing a decoupling of economic growth and energy-related carbon emissions. The
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CO2 emissions drivers and carbon intensity

3. CLIMATE CHANGE

energy intensity of GDP (TES/GDP ratio) decreased by 25% between 2000 and 2019,
while the carbon intensity of energy supply (CO2/TES ratio) only decreased by 16%.
Between 2019 and 2020, COVID-19 related lockdowns caused GDP per capita todecrease by 8% and energy-related CO2 emissions to drop by 12%. However, no structuralchanges occurred: TES/GDP was stable and CO2/TES decreased by only 2% (Figure 3.4).
Figure 3.4 Energy-related CO2 emissions and key drivers in France, 2000-20
1.2

Index 2000 = 1
Population

1.1

GDP/cap

1.0

CO₂/TES

0.9

TES/GDP0.8

CO₂ emissions

0.7
2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

IEA. All rights reserved.

Energy-related CO2 emissions have been decreasing despite population and economic
growth, thanks to a declining carbon intensity of the economy. 2020 saw a drop in emissions
due to COVID-19 lockdowns.
* GDP refers to real GDP in USD 2015 prices and purchasing power parity (PPP).
Notes: GDP = gross domestic product. TES = total energy supply. CO2 emissions refers to energy-related CO2
emissions from combustion processes.
Source: IEA (2021a), IEA CO₂ Emissions from Fuel Combustion Statistics (database), www.iea.org/statistics.

Figure 3.5 CO2 intensity per GDP* in France and IEA countries, 2000-19
0.25
0.23
0.21
0.19
0.17
0.15
0.13
0.11
0.09
0.07
0.05

kg CO₂/USD GDP PPP

Germany
IEA Europe
Italy
Spain
United Kingdom
FranceSwedenIEA. All rights reserved.

The CO2 intensity of France’s economy has steadily fallen since 2000 and is today below theweighted average of European IEA countries.
* GDP data are in billion USD 2015 prices and purchasing power parity (PPP).
** IEA Europe is the equivalent of a weighted average of European IEA countries.

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Note: kg CO2/USD GDP PPP = kilogrammes of carbon dioxide per United States dollar in purchasing power parity.
Source: IEA (2021a), IEA CO₂ Emissions from Fuel Combustion Statistics (database), www.iea.org/statistics.

In 2019, the carbon intensity of the French economy (measured as the ratio of emissions
per unit of GDP) was 0.10 kilogrammes of carbon dioxide (kg CO2) per United States dollar(USD) in purchasing power parity (PPP) (Figure 3.5). The carbon intensity decreased from
0.16 kg CO2/USD in 2000 and is lower than the European International Energy Agency(IEA) average of 0.14 kg CO2/USD.
France is among the global leaders, with a very low-carbon electricity mix. Emissions fromelectricity and heat generation were 61 grammes of carbon dioxide per kilowatt hour(g CO2/kWh) in 2019 and saw a 29% decrease compared to 2000 (Figure 3.6), which islargely due to the significant role of nuclear energy. By comparison, Germany’s power
generation had an intensity 334 g CO2/kWh in 2019. France is below the weighted IEAEurope average of 242 g CO2/kWh. France benefits from its low-carbon electricity
generation for industrial production, transportation and energy use in the residential sector.
Figure 3.6 CO2 intensity of electricity and heat generation in France and selected
IEA countries, 2000-19
600

g CO₂/kWhGermany
Italy

500

IEA30

400

IEA Europe

300

United Kingdom

200

Spain

100

France0

SwedenIEA. All rights reserved.

ENERGY SYSTEM TRANSFORMATION

3. CLIMATE CHANGE

Thanks to the high share of nuclear energy, France’s CO2 intensity of electricity and heatgeneration remains very low.
* IEA30 is the equivalent of a weighted average of 30 IEA member countries.
Note: g CO2/kWh = grammes of carbon dioxide per kilowatt hour.
Source: IEA (2021a), IEA CO₂ Emissions from Fuel Combustion Statistics (database), www.iea.org/statistics.

Emissions reduction targets
An early and global leader of the decarbonisation agenda, France was among the first
countries to adopt ambitious GHG emissions reductions targets towards carbon neutrality,
an energy and climate planning framework with carbon budgets and an economy-wide
carbon tax trajectory.

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The 2015 Energy Transition for Green Growth Act (Loi relative à la transition énergétiquepour la croissance verte) set out domestic targets of decreasing GHG emissions below
1990 levels by 40% to 2030, confirming the goal of reducing emissions by 75%, or a factorof 4, towards 2050 (as defined in the 2005 POPE Law).

3. CLIMATE CHANGE

In 2017, the Climate Plan called for ambitious climate action towards climate neutrality
in France, notably measures for clean mobility, clean electricity and ending fossil fuelproduction by leaving oil and gas reserves in the ground (MTE, 2017). Many of the
proposed measures were included in the Energy and Climate Law of 2019. The Climate
Plan promoted carbon-free electricity; fuel switching; and simplification of procedures forthe development of marine, geothermal and other renewable sources. It also pledged toban hydrocarbon exploration so that by 2040 France no longer produces any oil, gas orcoal. The plan supported the increase in the price of carbon with an alignment of taxation
between diesel and petrol, the “energy voucher” for low-income households and the endof internal combustion engine (diesel/petrol) sales by 2040.
The 2019 Energy and Climate Law (Loi Énergie et Climat) turned these objectives into
law and legislated the goal of achieving carbon neutrality by 2050 in the French Energy
Code, which stipulates a reduction of GHG emissions by 85% (excluding LULUCF)
by 2050, compared to 1990 levels. The law provided for the law on energy and climate
planning process to define the targets under the SNBC and PPE. The 2021 Climate andResilience Law (Loi Climat et Resilience) was adopted in August 2021 with new climate
actions.

France’s long-term strategy and carbon budgets
First developed in 2015, the National Low-Carbon Strategy (Stratégie Nationale
Bas-Carbone, SNBC), updated in 2018-19 and published in April 2020, describes a
net zero roadmap across all sectors – in line with the 85% decrease of emissions
by 2050.
The decree of 21 April 2021, adopting the new SNBC, revised upwards the second
carbon budget (2019-23), left the third one intact (2024-28) and established a new fourthcarbon budget for the period 2029-33.
The SNBC is based on two scenarios – with existing measures and with additional
measures, alongside the business-as-usual scenario. The 2020 SNBC pathway requires
an average 3% annual reduction of GHG emissions in the period up to 2030 (Figure 3.7).
The “with existing measures” scenario reflects policies in place until July 2017; an update
is planned for 2021. The “with additional measures” scenario was revised in line with theupdated national targets and postpones several policies initially planned up to 2023.

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The implementation of the carbon budgets requires sectoral plans and policies. For theenergy sector, the two successive five-year energy investment plans (la programmation
pluriannuelle de l’énergie, PPE) describe the additional policies and measuresnecessary to meet the SNBC targets.

Mt CO2-eq

Figure 3.7 France’s path to climate neutrality under the revised National Low-Carbon
Strategy, 2005-50
600
500

Exceeded
1st CB Revisionof 2nd CB

400

1stcarbonbudget(CB)

300

2nd CBGHG
emissions
3rd CB
4th CB

Carbon sinks

200
100
0
- 100
2005

2010

2015

2020

2025

2030

2035

2040

2045

2050
IEA. All rights reserved.

Notes: Mt CO2-eq = million tonnes of carbon dioxide equivalent. GHG = greenhouse gas. The revised National
Low-Carbon Strategy scenario towards climate neutrality requires a faster decarbonisation to decrease emissions
from 2015 levels already by 28% in 2030.
Source: MTE (2020), National Low-Carbon Strategy, www.ecologie.gouv.fr/sites/default/files/2020-0325_MTES_SNBC2.pdf.

France was not able to meet the targeted reductions of its first 2015-18 carbon budget,with an estimated surplus of 65 Mt CO2-eq over the whole period, or a mean annual excess
of around 16 Mt CO2-eq. Emissions decreased by only 1% per year on average between
2015 and 2018, because transport sector emissions were on the rise, whereas the SNBC
2015 scenario projected a decrease of 2.2% per year on average. The SNBC of 2020
outlined the discrepancies between the indicative annual budgets and actual emissions.
They reflect a widening implementation gap of +3 Mt CO2-eq for 2015, +14 Mt CO2-eq for
2016, +28 Mt CO2-eq for 2017 and +19 Mt CO2-eq for 2018 (MTE, 2020). Based on the2021 updated business-as-usual projections, the government expects it will be able tomeet the second carbon budget, following the upward revision in April 2020 and taking into
account the emissions reduction in 2019 and the effect of the COVID-19 pandemic. 1 In
July 2021, the Council of State asked the government to take additional measures by
31 March 2022 to meet its commitments under the Paris Agreement to reduce GHG
emissions by 40% by 2030. 2

ENERGY SYSTEM TRANSFORMATION

3. CLIMATE CHANGE

https://reportnet.europa.eu/public/country/FR.
Émissions de gaz à effet de serre: le Conseil d'État enjoint au Gouvernement de prendre des mesures
supplémentaires avant le 31 mars 2022 (conseil-etat.fr).
1
2

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By 2050, the SNBC targets the full decarbonisation of energy production (relying more on
biomass and low-carbon heat and electricity), more than a 40% reduction of final energy
consumption, a strong reduction of non-energy related emissions (-40% agriculture, -50%
industry) and an increase in carbon sinks. The SNBC does not consider a major role forcarbon capture, utilisation and storage and assumes a rapid phase-out of fossil fuels (seeAnnex 5 of the SNBC). Carbon capture, utilisation and storage is assumed to support the
decarbonisation of industry (non-energy process emissions of around 5 Mt CO2 in 2050)
and the combustion of biomass with negative emissions (10 Mt CO2 in 2050). Direct air
capture has not been taken into account.

3. CLIMATE CHANGE

Figure 3.8 France’s carbon budgets under the National Low-Carbon Strategy
Mt CO2-eq
450

422 Mt CO2-eq(without LULUCF)

350

Waste
Energy359 Mt CO2-eq(without LULUCF)

300 Mt CO2-eq(without LULUCF)

Buildings

250

Industry

150

Agriculture

50

Transport- 50

LULUCF2019-232029-332024-28

IEA. All rights reserved.

Notes: Mt CO2-eq = million tonnes of carbon dioxide equivalent. LULUCF = land use, land-use change and forestry.
Source: MTE (2020), National Low-Carbon Strategy, www.ecologie.gouv.fr/sites/default/files/2020-0325_MTES_SNBC2.pdf.

Carbon pricing
For the sectors under the EU Emissions Trading System (ETS), France’s emissions are
priced under the EU carbon price. The EU ETS price mechanism applies to emissions
from electricity production, industry and intra-EU aviation, with a price of above
EUR 60/t CO2 (in September 2021). At the European Union level, France supports thestrengthening of the carbon pricing, notably with a carbon price floor in the EU ETS, carbon
pricing for the sectors outside the EU ETS, setting a carbon border adjustment mechanism
at the borders of the European Union (cross-border adjustment) and a stronger ETS
system with a price of EUR 100/t CO2 in the coming decade. In 2020, France received a
total of EUR 728 million in revenues from the EU ETS auctions. The government allocated
EUR 420 million to the renovation of buildings for low-income households.
In the sectors outside of the ETS, such as transport, industry and buildings, France has inplace a carbon component which was introduced in 2015 as part of its energy taxation in
sectors outside the EU ETS. In 2018, the intended automatic increase of the carbon tax
rate to EUR 56/t CO2 on a trajectory to reach EUR 86.2/t CO2 by 2022 coincided with aperiod of high oil prices. Due to the social protests in 2018 (gilets jaunes, or yellow vests),
the tax was frozen at its 2018 level of EUR 44.6/t CO2. Although the carbon component
was expected to deliver 1 Mt of emissions reductions in transport and 2 Mt of reductions
in housing between 2014 and 2017, the tax under-delivered, in part due to a corresponding
period of low global oil prices.

Sectoral performance

France’s Mobility Strategy and 2019 Mobility Law introduced a wide range of measures toboost the role of alternative fuels – hydrogen, biogas/biomethane – and required all salesof private passenger cars to be low-emission vehicles in 2040, as part of the SNBC. France
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Responsible for 27% of France’s GHG emissions, the transport sector is the top emitterand has become a core focus of policy making in recent years. Transport also accounted
for 32% of national energy consumption and a large share of air pollutant emissions,notably nitrogen oxide (NOx) (56%) and PM2.5 (18%) as well as 20% of total non-methane
volatile organic compounds.

is actively working towards a modal shift. The bonus/malus system has been strengthened
to shift to electric car sales, alongside a policy focus on reducing their cost and barriers,
increasing the number of charging stations, and offering a scrapping premium toaccelerate the replacement of old and environmentally low-performing vehicles by newer
and cleaner ones. Under the French Recovery Plan, funds are allocated over the periodof 2020-22 to clean mobility (rail, biking, low-emission cars and trucks) and hydrogen(EUR 2 billion [bln] as part of the French hydrogen strategy [EUR 7 bln]). These measures
will also reduce air pollution, which remains a problem in French cities.
Buildings accounted for 20% of direct GHG emissions in France and 44% of energy
consumption and air pollutant emissions (25% of PM10, 40% of PM2.5 and 20% of NOx).
In 2021, Environmental Regulation 2020 introduced higher emissions performancestandards for buildings, reducing the heating and energy consumption of new buildings.

Governance and compliance
Climate policy governance in France has been strengthened through the creation of theHigh Council on Climate (HCC), the Ecological Defence Council, the greater role forcitizens to promote climate actions and the prime minister’s task to co-ordinate climate
action across government. Ministries are required to elaborate roadmaps with actions
plans in order to implement the SNBC and have to evaluate new laws and policies fromthe perspective of their impact on GHG one year after their implementation. By October
2021, three roadmaps have been presented (Ministry for the Economy, Finance and theRecovery; Ministry of the Ecological Transition; and Ministry of Agriculture).3
Replacing the Expert Committee on Energy Transition (Comité d’experts de la transitionénergétique), the HCC provides policy advice, importantly every five years in preparationof the updated SNBC, but does not have a role in the legislative process. It also regularly
reviews the country’s progress towards meeting its climate goals with an annual report(HCC, 2020). Within six months of the submission of this report, the government has an
obligation to formally present to parliament and to the Economic, Social and Environmental
Council the measures already implemented and those planned in response to therecommendations and proposals of this report. It shall present an explanation for each of
the unmet objectives as well as the means implemented to achieve them. In contrast to
the Climate Change Committee in the United Kingdom, an opinion of the HCC does not
trigger the revision of the policies.

ENERGY SYSTEM TRANSFORMATION

3. CLIMATE CHANGE

The Ecological Defence Council is chaired by the president and brings together all
ministers concerned with climate and environmental issues. It sets priorities for the
ecological transition and ensures their mainstreaming in all state policies. The council
monitors the achievement of the SNBC and its carbon budgets. The November 2020
council asked four ministries to elaborate roadmaps with action plans in order to implement

www.ecologie.gouv.fr/ministere-transition-ecologique-publie-plan-daction-climat;
www.gouvernement.fr/sites/default/files/contenu/piece-jointe/2021/04/937__plan_daction_climat_du_ministere_de_leconomie_des_finances_et_de_la_r._.pdf;
https://agriculture.gouv.fr/strategie-nationale-bas-carbone-le-plan-dactions-du-ministere-de-lagriculture-et-delalimentation.

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33. CLIMATE CHANGE

the SNBC, to organise an interministerial effort to consolidate the methodology of climate
assessment of laws, and to publish the evaluation of the Mobility Guidance Law (Loid’orientation des mobilités).
The president invited a Citizens’ Convention on Climate to define measures to reduce
GHG emissions by 40% (compared to 1990 levels) by 2030 in a spirit of a just transition.
The Citizens’ Convention on Climate presented 149 measures, out of which around 40
were reflected in the Climate and Resilience Law (Loi Climat et Résilience), which was
adopted in August 2021. However, the Citizens’ Convention on Climate was focused on
the implementation of the existing 2030 targets, not on actions needed specifically toachieve climate neutrality by 2050 (MTE, 2021).
Local authorities act alongside the national government in France, and regional alignmentof energy and climate goals with national goals remains a challenge. Fuel- andtechnology-related targets are in place at regional/local levels of government and among
ministries there are conflicting policy directions, notably on the question of the future
electricity mix and the technology needs.
Territories and regions play a major role in implementing the national goals. Territories andregions are obliged to produce regional plans for spatial planning, sustainable
development and equality and territorial climate-air-energy plans (plans climat-air-énergie
territoriaux, PCAET) (see Chapter 2).

Climate financeIn 2015, France implemented a pioneering regulation related to environmental, social andgovernance (ESG) risks, which integrates climate change into investment decisions.
Article 173-VI of the Energy Transition for Green Growth Act requires institutional investors
and trust companies to disclose three elements: 1) ESG criteria used in their policies andstrategy; 2) the volume of finance used to contribute to the energy and ecologicaltransition; and 3) related financial – physical and energy transition – risks. These
provisions have evolved recently, with the entry into force in May 2021 of the implementing
decree related to Article 29 of the 2019 Energy and Climate Law. It takes into consideration
recent European legislative developments and is closely linked to the European
Sustainable Finance Disclosures Regulation. It includes new requirements related tobiodiversity and climate risk management and alignment; more actors and activities
included in the scope; provisions for enhanced disclosure requirements onsustainability/ESG risk management; and the adoption of a continuous improvement plan.
The Task Force on Climate-related Financial Disclosures bases its works on the French
regulation as well as the EU Sustainable Finance Disclosures Regulation. The first reports
are to be published by financial institutions in 2022.

In 2017, France issued its first sovereign green bond. It amounted to EUR 7 bln and has
a maturity of 22 years (2039), to leverage a total of EUR 28.9 bln in 2021. The bonds cover
climate change mitigation, climate change adaptation, protection of biodiversity and
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France promotes transparency and environmental commitment of financial products
through voluntary labelling, notably the Greenfin label for green investment funds, whichaims at channelling investments towards the energy and ecological transition. Currently,
62 funds are labelled, representing a total volume of over EUR 17 bln.

In 2020, the parliament adopted an eco-conditionality mechanism in its third 2020
Amending Finance Law (Article 66). When taking stakes through the Shareholding Agency(APE) in companies that generate a turnover of more than EUR 500 million, the state
requires companies to make commitments to reduce GHG emissions. The implementing
decree is currently being drawn up by the government.
Climate mitigation and adaptation finance is a priority for France and the government istargeting USD 6 bln per year up to 2025, with one-third, or USD 2 bln, dedicated toadaptation measures, as pledged under the United Nations framework.4 The Frenchgovernment supports the Global Environmental Facility and the Green Climate Fund.
France plans to end oil export support by 2025 and natural gas support by 2035, as thegovernment supports the alignment of financial flows with climate goals under the Paris
Agreement.
France finances environment and climate action under its official development
assistance. 5 France’s official development assistance has increased in recent years, from
EUR 10 bln in 2017 to EUR 12.4 bln in 2020 (0.53% of gross national income), with mainly
bilateral support (64% of the total) and mostly grants (72%). Official development
assistance is increasingly disbursed, among other financial entities, by the French
Development Agency, with grants for projects in priority countries, notably in Africa, thanks
to an increase in project assistance under the Solidarity Fund for Innovative Projects anda doubling of funding allocated to civil society organisations between 2017 and 2022.
The French Development Agency has a strong energy transition strategy, with an
exclusion of fossil fuel exploration activities. It also excludes coal power plants from its
financing and has stringent criteria for gas power plants. A founding member of the Africa
Renewable Energy Initiative, France provided EUR 3 bln per year of support to implement
the 2030 Roadmap for Renewable Energy Future in Africa during 2016-20. In line with the
French Development Agency’s climate strategy (2017-22), the agency facilitates theimplementation of the Paris Agreement and low-carbon and resilient transitions indeveloping and emerging countries, with the objective of committing EUR 5 bln of annual
climate finance by 2020 in its countries of operation, excluding France’s overseas
territories, with 50% of commitments dedicated to actions with climate co-benefits. A totalof EUR 5.2 bln were committed in 2020 to developing countries, including EUR 2.1 bln foradaptation. Adaptation reached 40% of its climate finance. The French Development
Agency is committed to ensure that 30% of its climate finance is nature-positive by 2025,
and that annual biodiversity co-benefits reach EUR 1 bln by the same date.

4
5

www.un.org/en/climatechange/100bn-finance-goal.
www.diplomatie.gouv.fr/en/french-foreign-policy/development-assistance/french-official-development.

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pollution reduction. In 2021, the French Treasury has issued a second green bond(obligations assimilables du Trésor), for another EUR 7 bln, with an initial maturity of
23 years (2044), which has raised an outstanding amount of EUR 9.3 bln to date.

ENERGY SYSTEM TRANSFORMATION

3. CLIMATE CHANGE

3. CLIMATE CHANGE

Adaptation and resilience to climate change
The French energy system is increasingly exposed to climate change-related risks, suchas periods of droughts, floods and heavy precipitation, which in some cases impact on thewater use of nuclear and hydro power plants and the transport of goods on the rivers.
France borders four seas: the North Sea, the Channel, the Atlantic Ocean and theMediterranean. Fourteen out of the 56 nuclear reactors operating in France in 2021 are on
the seashore.
Climate impacts are monitored by the National Observatory on the Effects of Climate
Change (ONERC), which was created in 2001. France publishes climate data andmethods and tools to identify impacts and effects of climate change, for instance throughthe Drias’ les Futurs du Climat. 6
France’s mean temperature has increased by 1.7°C since 1900, higher than the average
global warming, which impacts energy demand patterns. The year 2019 was the hottest
year since temperature recording started. Demand for heating remains high during winterpeaks, while the level of electricity demand for cooling during summer has gone up. The
average annual precipitation has increased, with some regional disparities. In the northernpart of France, average precipitation has increased while the opposite trend can beobserved in the southern part. Heavy rainfall events are becoming more intense in the
Mediterranean region (IEA, 2021b). Risks of sea level rise and serious storms have notbeen reported for France. France ranks among the countries which report higher economic
losses from extreme weather events as recorded by insurance companies.

EUR per capita

Figure 3.9. Losses from extreme weather events in EU countries and the United
Kingdom, 1980-2019
3 000
2 500
2 000
1 500
1 000
500
0

IEA. All rights reserved

Source: EEA (2021a), Economic losses from climate-related extremes in Europe, www.eea.europa.eu/data-andmaps/indicators/direct-losses-from-weather-disasters-4/assessment.

6

www.drias-climat.fr.

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Among the historic events, France experienced a range of high impact extreme weather
events that can be related to climate change, including, for example, the heatwave of 2003,
which caused 14 000 deaths, and the flooding in 2020 of 23 communities in the departmentof the Gard. For instance, the heatwaves combined with droughts in June-July 2019 forced

Électricité de France (EDF) to curb the output or temporarily shut down 6 of its 19 nuclear
power stations to limit the environmental impact of waste heat on rivers.
The National Climate Change Adaptation Plan (PNACC-2) for the period 2018-22 isdesigned alongside the SNBC. Detailed actions and measures for climate resilience in theenergy sector were proposed in the first PNACC, while the second PNACC pays lessattention to this topic. The PPE also includes investments in the security of supply, notably
in the weatherproofing of energy infrastructure to address climate change impacts andextreme weather events.
In terms of governance, the prime minister is now required to ensure the implementationof the PNACC. A new Adaptation Plan will need to be developed in line with the new stricter
climate neutrality goal of the Energy and Climate Law, which refers to “climate urgency”.
EDF has undertaken a systematic climate change risk assessment for its infrastructure
and activities, and developed technology to reduce flood risks following heavy precipitation
events, and a plan to deal with increasing temperatures. In 2008, EDF initiated a plan todeal with heatwaves, the so-called “Grands Chauds” plan, which aims to ensure the safety
and supply security of EDF’s nuclear power plants in the face of increasing temperatures.
The “Grands Chauds” plan includes a reassessment of maximum water temperatures
expected at each nuclear power plant up to 2030. Revised temperature estimates haveinformed the revision of engineering guidelines for extreme weather situations and ofsafety standards taking into account climate change impacts. EDF has also undertaken asystematic climate change risk assessment for its infrastructure and activities, anddeveloped technology to reduce flood risks following heavy precipitation events. Thissystem, called piano key weir, improves flood discharge from hydropower dams during
heavy precipitation events.

Air quality

ENERGY SYSTEM TRANSFORMATION

3. CLIMATE CHANGE

Air pollutant emissions (NOx and sulphur dioxide emissions [SOx]) have been declining
since 2013 (Figure 3.10). The concentration of particulate matter emissions (PM10 andPM2.5) has come down, but not as much as NOx, owing to residential use of biomass forheating, road transport and industrial activities (Figure 3.11).

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However, France’s air pollution levels remain above the limit values determined by theEU’s ambient air quality legislation in Directive 2008/50/EC, notably the daily limit values
applicable to PM10 particles which have been legally binding since 2005. In October 2018,
the European Commission referred France to the European Court of Justice, France’s
second referral to the court regarding non-compliance with EU air quality standards. In its
judgment of 24 October 2019, the court found that France did not comply with the limit
values for the concentrations of NO2 in 12 air quality zones (Commission against France,
C-636/18). Local air pollution remains a concern in Paris, which is particularly exposed toair pollution because of the density of the urban area, its geographic location and thestructure of its transport system.

3. CLIMATE CHANGE

Figure 3.10 Emissions of air pollutants in France, 2000-19
120

Index 2000=100

100
80
60

PM
PM10
10

40

NOX
NO
X

20

PM25
PM2.5

0

SO
SOX
X
IEA. All rights reserved.

Note: PM = particulate matter. NOx = nitrogen oxide. Sox = sulphur dioxide.
Source: Citepa (2021), Inventory of Air Emissions in France, www.citepa.org/wp-content/uploads/publications/ceenu/UNECE_France_mars2021_d.pdf.

Figure 3.11 Concentrations of air pollutants in France, 2009-18
120

Index 2009=100

100
NOX
NO
X

80

PM10
PM
10

60

PM2.5
PM25

40
20
0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 IEA. All rights reserved.

Note: PM = particulate matter. NOx = nitrogen oxide. Sox = sulphur dioxide.
Source: EEA (2021b), France – Air pollution country fact sheet 2020, www.eea.europa.eu/themes/air/country-factsheets/2020-country-fact-sheets/france.

France’s National Air Pollution Reduction Plan (Plan national de réduction des émissions
de polluants atmosphériques, PRÉPA) and air quality rules (Décret No. 2017-949/2017)and its Arrêté/2017 established pollution reduction targets and actions to enhance andimplement air quality by 2020 and 2030 (Table 3.1).
Table 3.1 France’s targets for reducing emissions of pollutants for 2020 and 2030
Pollutant

By 2020

By 2030

NO3

-50%

-69%

NMVOC

-43%

-52%

NH3

-4%

-13%

PM2.5

-27%

-57%

Responsibility for air quality is shared between the state and local authorities, because air
quality policies require actions at different levels of competence (European, national, local)
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Note: NO3 = nitrate. NMVOC = non-methane volatile organic compound. NH3 = ammonia. PM = particulate matter.

depending on the action to be taken. Some actions fall within the remit of the state, andlocal authorities need an authorisation to act on its behalf, including some taxation
measures.
City level and territorial actions are being pursued to implement these objectives, notably
under the PCAETs. Policy efforts will be set out in the forthcoming PRÉPA and regional
climate-air-energy schemes, but also in the PCAET, and local atmosphere protection plansendorsed by the state, in line with Article 23 of EU Air Quality Directive (2008/50/EC).
The government is implementing the 2015 Air Quality Action Plan and its five main
measures: 1) introduction of an air quality certificate (certificat qualité de l’air, Crit’Air) forless polluting cars; 2) a call for proposals for breathable cities within five years; 3) ananti-pollution framework as part of the Energy Transition for Green Growth Act; 4) financial
aid for clean cars (bonus); and 5) implementation of low-emission zones is compulsory
where they exceed the limit values, based on the French Mobility Act (2019).
The Crit’Air, which ranks vehicles’ environmental performance in terms of air pollutant
emissions, was introduced by the Ministry of the Ecological Transition in 2017 as a tool toregulate traffic restrictions during periods of air pollution peaks. To address pollution
peaks, for instance, the state allows temporary restrictions to be imposed by local
authorities, including urban zonal restrictions, car circulation restrictions and special
driving lanes for low-emission cars. This certificate allows local authorities to create
low-emission zones.
Real-time air quality levels are monitored at the national and regional levels throughregional air quality surveillance by approved associations and the central air quality
surveillance laboratory and the Technical Reference Centre for Air Pollution and Climate
Change (Citepa). Cities also measure air quality, notably the Observatory of Air Quality inÎle-de-France (Airparif).

ENERGY SYSTEM TRANSFORMATION

3. CLIMATE CHANGE

Assessment
An early global leader on addressing climate change, France has been committed toclimate neutrality by 2050 since 2019, with ambitious and legislated targets for its energy
transition which rely on the full decarbonisation of energy production and major energy
efficiency improvements or sobriety. It is a global leader in setting climate policies and its
experience will inform many other countries’ low-carbon policy frameworks.

Since 1990, total GHG emissions have decreased by 19%. On a path to net zero, France
needs to reduce emissions by 85% by 2050 from 1990 levels, according to the updated
SNBC, with some negative emissions. France has not been able to meet its first carbon
budget, but is on track towards meeting the second one, in the light of the extraordinary
impacts of COVID-19, which lead to a 12% decline in energy-related CO2 emissions
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France’s National Low-Carbon Strategy and its carbon budgets are operationalised for theenergy sector under the PPE, with targets up to 2028. Both were revised in 2020 to takeaccount of a steeper reduction pathway of carbon neutrality, outlined in the 2019 Energy
and Climate Law and proposed by the Climate Plan of 2017. However, the 2030 emissions
reduction target of -40% by 2030 (from 1990 levels) has not been amended. Instead, thegovernment revised the second carbon budget upwards, with a view to postpone actions
to the next carbon budget.

3. CLIMATE CHANGE

between 2019 and 2020, notably from transport emissions and the upward revision of thesecond carbon budged. However, the structural reality has not changed, and it can beassumed that an economic recovery post-pandemic will result in increased emissions.
The SNBC does not outline policy instruments, which is different from theUnited Kingdom’s carbon budgets, where the government presents policy measures for
implementation in the Carbon Plan attached to each carbon budget. This was also
confirmed by the HCC, as it concluded that the implementation of the SNBC “is hampered
by a lack of firm direction and of a cross-cutting vision” as it does not contain the policy
instruments necessary in each sector (HCC, 2020).
Climate governance has been strengthened; however, implementation is lagging. All
government ministries will have to commit to an implementation roadmap designed toachieve the sectoral targets (carbon budget). At the time of writing, three ministries havepresented their roadmaps. Transparency and accountability of climate action is a key
requirement for public acceptance and visibility of France’s climate goals. The
independence of the HCC has been increased to improve the evaluation of climate action,
but its role could be much stronger in identifying additional measures, similar to theUnited Kingdom’s Climate Change Committee.
France needs to scale up its climate mitigation policies. Half of the effort has beenachieved over the last 30 years; the other half needs to be done in the next 10 (to reduce
emissions by 40% by 2030). As emissions in transport are not declining in line with thetargeted rates, France is not on track to reach the target.
To achieve net zero and compensate for slower progress under the current SNBC, a full
update of the SNBC and stronger medium-term actions are needed to increase the rate of
reduction, notably in the transport sector. By 2024, the government plans to present a new
SNBC. This would be in line with other EU governments that have recently increased thenear-term action to avoid the carbon burden on future generations.

France was the first country in the world to ban the sales of new light vehicles using fossil
fuels by 2040. However, today, most countries have more ambitious plans and measuresin place, as well as higher EV penetration rates. But France is catching up with EV sales
with other countries. The recovery funding and new measures imposed by the government
have finally led to a strong increase in sales. The government is confident that it can meetits near-term PPE targets, which are more ambitious with a 1.2 million target for 2023 anda 4.8 million target for 2028. However, the energy efficiency, renewables and GHG
reduction targets for 2030 were already legislated in the landmark Energy Transition andGreen Growth Act of 2015, but have not been strengthened since. Other countries
presented more ambitious plans in 2021, in the context of their net zero plans and the56

IEA. All rights reserved.

A revision of France’s climate strategy is absolutely necessary also in the context of the
EU legislated goal of climate neutrality by 2050 and the EU Climate Law’s increased
emissions reduction target, up to -55% by 2030. This is an opportunity to take stock andalign multiple and overlapping targets at all levels of government: national, regional andlocal. Today, the coherence, readability and transparency of France’s climate and energy
targets remains a challenge. In addition, time frames differ between EU and national plans.
It is critical to align goals across sectors, fuel targets, and regional and EU plans for 2030
and 2050 when preparing the next update of the SNBC and the PPE, which is planned for2024.

COP26. The Climate and Resilience Law 2021 includes the ban of the sale of the mostpolluting vehicles from 2030 onwards.
Given the magnitude of the challenge and potentially slower progress in energy efficiency,
the government needs to update the existing measures and evaluate additional ones
needed in the forthcoming SNBC update, which may be available in industrial processes;
agriculture; and contributions from carbon sinks, forest management, wood products, landuse, and carbon capture and storage.
France benefits from its low-carbon electricity footprint. In 2019, emissions from electricity
and heat generation were 61 g CO2/kWh, a 29% decrease compared to 2000, lower thanthe IEA Europe average at 242 g CO2/kWh. The contribution of nuclear is incumbent/
embedded, and delivers low-cost generation and energy security with low emissions, but
no decision on the long-term electricity mix beyond 2035 has been taken, including on therole of nuclear.
Delivery of the net zero climate goals is heavily reliant on effective delivery of targets inparticular areas such as the energy efficiency of buildings, decarbonisation of transport,
and an increase in renewables for both electricity generation and renewable heat (enduse energy consumption). The trajectory for these transformations is very challenging
given the current status and the short time frames, and there is a risk that one, or more, of
these will fall short of expected delivery. In this context, it is critical to introduce regularreview points for all measures and budgets relating to clean energy technology
investments, including energy efficiency targets by sector, and to ensure a level playing
field for all energy market participants. While the government has indicators in place toreview the SNBC, its capacity of independent progress evaluation and policy guidance islimited, as the SNBC does not contain policy instruments (they are in the PPE). The HCC
should strengthen its regular review of the SNBC and do so for the sectoral plans as well,notably the PPE. The government should swiftly respond to the HCC’s 2021 report tooutline its assessment of delays and new measures to be taken to deepen implementationand strengthen the near-term ambitions.

ENERGY SYSTEM TRANSFORMATION

3. CLIMATE CHANGE

Adaptation and climate resilience are not yet at the top of the policy agenda despite thedeclared climate urgency. Despite the low-carbon intensity of the French economy, theFrench energy system is nonetheless increasingly exposed to climate change-relatedrisks, such as heatwaves and droughts, storms and floods. The resilience of the country’s
energy infrastructure requires particular attention; for instance, droughts and floods impact
the water use of nuclear and hydro power plants and the transport of goods on rivers. A
more regular screening of impacts across government and action by industry to work withgovernment and stakeholders should be encouraged, including through advisory bodies
and action groups. The National Observatory on the Effects of Climate Change has beenmonitoring climate change impacts since 2001 and Météo France is stepping up its efforts
to better forecast weather events. The PNACC-2 for the period 2018-22 was designed

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The coherence and clarity of the available incentives is also critical for all stakeholders.
Constantly modifying objectives and support frameworks under the legal framework canhave dampening effects on engagement, either by frustrating projects or subsidies. Failingto maintain alignment with rapid developments in new technologies, and an inability toreflect current costs in schemes, could result in the under-utilisation of incentives orcost-inefficiencies in delivery.

3. CLIMATE CHANGE

alongside the 2020 SNBC and the next PNACC will be an opportunity to review the stateof play and set concrete measures, also for the energy sector.

Recommendations
The government of France should: Expand the mandate and independence of the High Council on Climate with a view
to improve the transparency and accountability of policy decisions on climate
action, track progress, and identify additional measures to align with the targets.
 Identify opportunities for action to meet climate neutrality with additional measuresand aligned goals across sectors, fuel targets, and regional and EU plans for 2030
and 2050 when preparing the next update of the National Low-Carbon Strategy andthe two five-year energy investment plans. Reflect on the opportunities for job
creation and adjustment for a just and inclusive transition.
 Review the National Climate Change Adaptation Plan, based on the future National
Low-Carbon Strategy and strengthen climate resilience measures with a view toreflect stricter climate neutrality ambitions and “climate urgency”.
References
Citepa (Centre interprofessionnel technique d’études de la pollution atmosphérique) (2021),
Inventory of Air Emissions in France, www.citepa.org/wp-content/uploads/publications/ceenu/UNECE_France_mars2021_d.pdf.
EEA (European Environment Agency) (2021a), Economic losses from climate-related
extremes in Europe, www.eea.europa.eu/data-and-maps/indicators/direct-losses-fromweather-disasters-4/assessment.
EEA (2021b), France – Air pollution country fact sheet 2020,
www.eea.europa.eu/themes/air/country-fact-sheets/2020-country-fact-sheets/france.
HCC (High Council on Climate) (2020), Annual Carbon Neutrality Report 2020, Executive
Summary, www.hautconseilclimat.fr/wp-content/uploads/2020/07/annual-report-2020executive-summary-1.pdf.
IEA (International Energy Agency) (2021a), CO₂ emissions by product and flow, IEA CO₂Emissions from Fuel Combustion Statistics (database), Accessed on 10 September 2021
www.iea.org/statistics.
IEA (2021b forthcoming), Climate Change Resilience Indicator, Country Fiche France,
www.iea.org/reports/climate-resilience-policy-indicator
MTE (Ministry of the Ecological Transition) (2021), Loi Climat et Résilience, Dossier depresse, Décryptage du passage du projet de loi en 1re lecture à l’Assemblée nationale,www.ecologie.gouv.fr/sites/default/files/2021.05.03_DP%20Loi%20Climat%20R%C3%A9sil
ience_0.pdf.
MTE (2020), National Low-Carbon Strategy, www.ecologie.gouv.fr/sites/default/files/202003-25_MTES_SNBC2.pdf.
UNFCCC (United Nations Framework Convention on Climate Change) (2020), France 2020
National Inventory Report, https://unfccc.int/documents/226401.
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MTE (2017), Plan Climat, www.gouvernement.fr/action/plan-climat.

Key data (2019)
Total final consumption (TFC): 150.1 Mtoe (oil 43.9%, electricity 24.7%, natural gas 19.6%,
bioenergy and waste 8.2%, heat 2.5%, coal 0.8%, solar 0.1%) -3.9% since 2009
TFC by sector: buildings 39.3%, industry 30.4%, transport 30.3%
TFC per capita: 2.23 toe/capita (IEA average 2.90 toe/capita), -7.8% since 2009
TFC per GDP:* 52 toe/USD million (IEA average: 65 toe/USD million), -16.1% since 2009
France’s 2020 targets: primary energy consumption 219.9 Mtoe (2019:** 235.3 Mtoe) andfinal energy consumption 131.4 Mtoe (2019:** 145.5 Mtoe)
France’s 2030 targets: primary energy consumption 202 Mtoe and final energy consumption
120.9 Mtoe
* GDP in USD 2015 prices and PPPs (purchasing power parity).
** Status in 2019 (Source: Eurostat, 2021).

Overview

ENERGY SYSTEM TRANSFORMATION

4. Energy efficiency

France’s energy transition counts on major energy efficiency improvements to reduce final
consumption by 20% in 2030 and 50% in 2050, which were set out in the Energy Transition
for Green Growth Act of 2015. The targeted reduction is strongly based on the concept of“sobriety”, which has been the spirit of the French energy transition since the oil crisis in
the 1970s. It relies on significant behavioural changes rather than productivity increases.

Despite the progress made in the past decade, however, France is behind in reaching its
targets. In 2019, France’s primary energy consumption (PEC) was 235 million tonnes ofoil equivalent (Mtoe) and final energy consumption (FEC) was 145.5 Mtoe, much above
the targeted PEC of 219.9 Mtoe and FEC of 131.4 Mtoe for 2020 (Eurostat, 2021). At a
global scale, the International Energy Agency’s (IEA) Net Zero Roadmap for 2050
considers energy efficiency to be the key plank of short- to medium-term mitigation
measures (IEA, 2021a). The IEA Roadmap stipulates a 4% annual efficiency improvement
for fast emissions reductions. France’s energy sobriety will need to develop into realenergy efficiency, with a focus on productivity, technology innovation and digitalisation.
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Total final consumption (TFC) in France decreased by around 4% over the decade from2009 to 2019, thanks to major improvements in the buildings and industry sectors. France
has witnessed an overall decoupling between the growth of the country’s gross domestic
product (GDP) and its final energy consumption (TFC/GDP ratio), despite the population
increasing by 4% over the same period (Figure 4.1). GDP increased by 15% between 2009
and 2019. The energy intensity of GDP has declined by 16% since 2009.

4. ENERGY EFFICIENCY

Figure 4.1 France’s energy demand and key demand drivers, 2000-19
1.3

Index 2000=1
GDP

1.2

Population

1.1

Electricity consumption/capita

1.0

TFC

0.9

TFC/capita

0.8

TFC/GDP0.7

IEA. All rights reserved.

Increasing GDP and population with decreasing energy demand show a decoupling of energy
consumption and economic growth.
* GDP data are in billion USD 2015 prices and PPPs (purchasing power parities).
Note: GDP = gross domestic product. TFC = total final consumption.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Energy intensity and energy savings
Energy intensity per GDP decreased in France in the first two decades of this century,
following the trend of other European IEA countries (Figure 4.2). France’s energy
consumption per GDP was about 20% lower than the weighted average of IEA member
countries in 2019. France’s total final consumption per capita (2.2 Mtoe/capita) was 23%
less than the weighted average of IEA member countries, but slightly higher than that ofEuropean IEA member countries (Figure 4.3).
Figure 4.2 Energy intensity per GDP in selected IEA countries, 2000-18
0.09

toe/USD 1 000 GDP PPP

0.08

IEA 300.07

Germany

0.06

IEA Europe

France
Italy

0.05

Spain
United Kingdom

0.04

IEA. All rights reserved.

*GDP data are in billion USD 2015 prices and PPPs (purchasing power parities).
Note: toe = tonne of oil equivalent. GDP = gross domestic product.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

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France’s energy intensity of the economy decreased in line with the average of European IEA
member countries.

Figure 4.3 Energy intensity per capita in IEA countries, 2019
7
6
5
4
3
2
1
0

toe/capita

IEA. All rights reserved.

France has an energy intensity per capita lower than the average of IEA member countries,
but slightly higher than the average of European IEA member countries.
* GDP data are in billion USD 2015 prices and PPPs (purchasing power parities).
Note: toe = tonne of oil equivalent.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

The IEA’s decomposition analysis shows that between 2000 and 2018, France achievedenergy savings in all sectors, for a total of 267 petajoules (PJ) of cumulative savings, withvariable contributions from the different sectors (IEA, 2020) (Figure 4.4). Most of thesavings (64%) were achieved in the residential sector, followed by services and industry(26%), passenger transport (8%), and the freight transport sector (2%). Savings in thebuildings sector were achieved thanks to increasingly strict performance standards forappliances and buildings envelopes.
Figure 4.4 Energy savings by sector in France, 2000-18
300

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCY

PJ

250
200
150
100
50
0

Residential

Services and industry

Passenger transport

Freight transport

Cumulative savings

IEA. All rights reserved.

Between 2000 and 2018, France achieved energy savings in all sectors, with a major
contribution (64%) from the residential sector.
Note: PJ = petajoule.

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Source: IEA (2020), Energy Efficiency Indicators (database), www.iea.org/statistics.

4. ENERGY EFFICIENCY

IEA data show the consumption trends by sector. France’s TFC was 150 Mtoe in 2019.
The buildings sector, including residential and service sector buildings, was the mostenergy-consuming sector in 2019, accounting for 39% (59 Mtoe) of TFC (Figure 4.5),
followed by transport and industry, which covered about 30% of TFC (45 Mtoe) each inthe same year. Energy consumption in the buildings sector fluctuated around the heatingneeds during the winter periods. Energy demand in the industry sector dropped following
the financial crisis in 2008, to rebound slightly in the following years and decrease again
since 2011. The transport sector experienced a slight drop in demand between 2008
and 2010, a rebound in 2011 and has remained constant since.
Figure 4.5 Total final consumption in France by sector, 2000-19
70

Mtoe

60
50
40

Buildings

30

Industry*

20

Transport

100
IEA. All rights reserved.

Energy demand from buildings fluctuated around 60 Mtoe, while energy consumption fromindustry has been decreasing since 2011. Transport demand remained almost constant.
* Services/other includes commercial and public services, agriculture, forestry, and fishing.
Note: Mtoe = million tonnes of oil equivalent.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Energy efficiency targets and policies
Progress towards energy efficiency targets
France’s National Energy and Climate Plan (NECP) sets out 2020 and 2030 energy
efficiency targets for primary and final energy consumption (Figure 4.6). The NECP
includes the National Energy Efficiency Plan (MTE, 2020a).

1

146 Mtoe includes aviation. The FEC target excluding aviation is otherwise 140 Mtoe.

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As a contribution to the EU-wide targets for reducing energy consumption (under the
Energy Efficiency Directive, EED), France’s national target is to achieve a PEC of
219 Mtoe in 2020 and 202 Mtoe in 2030, and a FEC of 131 Mtoe in 2020 and 121 Mtoe
in 2030. In 2019, PEC was 235 Mtoe and FEC 146 Mtoe, 1 higher than the 2020 targets,
which can be achieved only because of the COVID-19 pandemic. The European
Commission considers the level of ambition of the 2030 targets to be “modest” for PEC

and “sufficient” for FEC (EC, 2020). By 2050, the government is targeting a 50%
reduction of the FEC from 2012 levels.
Article 7 of the EED also sets an energy efficiency obligation for France to achieve a totalof 365 terawatt hours (TWh) (31.4 Mtoe) of energy savings by 2020 and 758 TWh(65.2 Mtoe) by 2030. As of 2018, France had achieved 322 TWh (27.7 Mtoe) of energy
savings, which is in line with the progress established by the EED. The doubling of theenergy efficiency obligation for 2030 will require a major scale-up of the energy savings
from cross-sector policies.
Figure 4.6 France’s primary and final energy consumption, 2000-18 and targets
300

Mtoe

250

Primary energy
consumption (PEC)

200

Final energy
consumption (FEC)

150

PEC targets

100

FEC targets

0

2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050

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Note: Mtoe = million tonnes of oil equivalent.
Sources: Eurostat (2021), Primary and Final Energy Consumption (database),https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_bal_c.

Cross-sector policies

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCYFrance’s energy efficiency policies are governed by various EU policies, notably theEuropean Performance in Buildings Directive and the Ecodesign Directives and labelling
regulations. France supports an ambitious, effective European policy on the ecodesign ofenergy-related products, and energy labelling of these products. The Ecodesign
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France’s long-standing energy saving certificates scheme (white certificates) is one of its
key policies, alongside minimum performance standards and regulations, to achieveenergy savings across sectors. These certificates, so-called certificats d’économiesd’énergie (CEE), are issued by the Ministry of the Ecological Transition (MTE) to eligible
stakeholders that have undertaken energy saving operations. They target energy savings
across the residential, tertiary, industry, transport and agriculture sectors, including
installations subject to the EU Emissions Trading Scheme (ETS). The CEEs can be tradedwith a unit expressed in megawatt hours (MWh) cumac, corresponding to the cumulative
discounted saving of 1 MWh over the lifetime of a product or investment. The whitecertificates started in 2006 and are in the fourth period of application, which ends on
31 December 2021. The energy- saving target is 2 133 TWh cumac for the fourth
period o f 2018-21 (targeting 12 Mtoe of energy savings per year). The government
aims to further improve the performance and efficiency of the scheme during the fifth
period, which starts on 1 January 2022. The French Court of Auditors, the MTE and theInspectorate of General Finance review the scheme alongside the French Agency for
Ecological Transition (Agence de la transition écologique, ADEME) with a full evaluation
every three to four years.

4. ENERGY EFFICIENCY

Directive 2009/125/EC and Labelling Regulation (EU) 2017/1369 are implemented
through product-specific regulations, directly applicable in France. Ecodesign and energy
labelling regulations are complemented by harmonised European standards. These
technical specifications require products to comply with the mandatory standards, which
are binding for manufacturers. Digitalisation is another important driver of energy efficiency
across all sectors. France has been a pioneer in times-of-use pricing and is in the processof completing the roll-out of smart meters, mostly with the Linky Enedis technology. With
more than 28 million meters installed since 2015, the country will reach 35 million by 2022,
thanks to an overall investment of EUR 6 billion.

Policies and progress by sector
Buildings
Under the National Low-Carbon Strategy (SNBC), the government needs to achieve a
49% reduction in greenhouse gas (GHG) emissions by 2030 compared to 2015 levels inthe building sector. Target achievement is expected to accelerate towards later carbon
budgets. Within the next ten years, a 22% drop in energy consumption in the building
sector is required. By 2040, this decline reaches 29% and by 2050, 41%, compared to2015 levels.
Figure 4.7 Buildings energy demand in France by source, 2000-19
70

Mtoe
Heat

60

Electricity

50

Geothermal*

40

Solar

30

Bioenergy and waste

20

Natural gas

10

Oil

0

Coal
IEA. All rights reserved.

Energy demand in buildings shows an overall decreasing trend. Electricity provided 43% ofenergy used in buildings in 2019, with a decreasing share of fossil fuels.
* Geothermal increased from 0.014 Mtoe in 2009 to 0.017 Mtoe in 2019.
Note: Mtoe = million tonnes of oil equivalent.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

France has a high share of electricity use in the buildings sector, thanks to the historic roleof electric heating in the context of the country’s nuclear programme. The use of fossil
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Energy demand from buildings, including the residential and services sector (excluding
industry), amounted to 59 Mtoe in 2019, or 39% of TFC. Although consumption from thebuildings sector fluctuated between 68 Mtoe in 2010 and 58 Mtoe in 2014, the averageenergy consumption over the five-year period from 2015 to 2019 was 5% below theprevious five-year average (Figure 4.7).

fuels (coal, oil and natural gas) in the buildings sector decreased by 26% between 2009
and 2019, while electricity demand increased by 4% in the same time frame. In 2019,energy demand was met by electricity (43%), natural gas (29%), bioenergy (12%), oil(12%) and heat (4%).
In 2018, space heating was responsible for more than half (63%) of the energy
consumption in the residential sector, followed by residential appliances and water heating(Figure 4.8). Major energy efficiency improvements have been achieved since 2008 in
space heating and oil and coal used for heating more than halved in ten years. The
consumption of natural gas is still much higher than that of electricity in space heating,despite the rather large share of electric heating in France.

PJ

Figure 4.8 Residential energy consumption in France by end-use, 2019, and bysource, 2000-19
Space heating

1 200

Other

6%2%

Appliances

12%

Coal

800

Oil

Water heating
Cooking17%

Lighting
Space cooling

63%

Bioenergy

400Electricity
Gas

0

2000

2019

Space heating

2000

2019

Water heating

2000

2019

Cooking
IEA. All rights reserved.

Space heating accounts for most of energy demand in residential buildings. Energy
consumption for space heating has decreased since 2000 thanks to lower use of oil.

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCY

Note: PJ = petajoule.
Source: IEA (2020), Energy Efficiency Indicators (database), www.iea.org/statistics.

District heating
The amount of district heat supplied in France was stable between 2016 and 2019 ataround 175 PJ, but had increased by 16% since 2009. In 2019, 57% of district heating was
supplied by renewables and waste – a share that doubled from 2009 as bioenergy isreplacing coal, oil and natural gas. The use of geothermal (3.5% of total heat supply
in 2019) and solar thermal (2%) heat is also increasing (Figure 4.9).

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In 2019, there were 798 district heating networks and 24 cooling networks in France, which
supplied 2.4 million household equivalents (two-thirds residential sector and one-third
tertiary sector) and around 5% of consumption in heating and domestic hot water in France(ADEME, 2019a).

4. ENERGY EFFICIENCY

Figure 4.9 District heat supply in France by source, 2000-19
PJ
200
180
160
140
120
100
80
60
40
20
0
2000

60%
50%

2004

2006

2008

2010

2012

2014

2016

2018

Solar

40%

Bioenergy and waste

30%

Natural gas

20%

Oil

10%
2002

Geothermal

0%

Coal
Renewables and waste
share (right axis)
IEA. All rights reserved.

Note: PJ = petajoule.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

In 2020, the government ended its support to co-generation,2 which uses natural gas andhas several support schemes to increase the share of renewables in district heating,notably biogas. ADEME’s heat funds have been the core support mechanism over the past
decade to drive investment in renewable heat and efficiency of heat networks (seeChapter 5). New regulations (RE2020) support a strong shift to heat pumps in the coming
years.

Energy efficiency policies in the buildings sector
New buildings
France has strengthened labelling and building codes for new construction since theadoption of the Thermal Regulation 2012 (RT2012), based on the 2019 Energy andClimate Law and notably with the new Environmental Regulations (RE2020).
France is strengthening the enforceability and definition of its energy performancecertificate, the so-called diagnostic de performance énergétique (DPE), under Article 179of the Housing, Planning and Digitalisation Development Act (Loi ELAN) of 23 November
2018. The scale for the DPE (A-G) by its two criteria – primary energy consumption of thebuilding and its greenhouse gas emissions – was upgraded. In 2020, the decrees
amending the construction and housing code were undergoing consultations and will enter
into force with stricter thermal regulations.
The RE2020 will enter into force in 2022. It aims to reduce the carbon intensity of heatingin new buildings with stronger thermal and environmental standards, higher use of
decarbonised energy, a reduction of the climate/carbon impact of the construction withnew materials, and the adaptation of new buildings to increased summer heat.

2

Co-generation refers to the combined production of heat and power.

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The new bioclimate standard (Bbio, besoin bioclimatique) requires a 30% improvement in
the performance of the building envelope, compared to the RT2012. As an upgrade fromthe RT2012, the RE2020 focuses on the use of decarbonised energy in new buildings,
with a very strong limitation of the carbon impact of energy, starting from 2021 insingle-family houses (4 kg CO2-eq/m²/year) and from 2024 onwards in multi-apartment
dwellings or so-called collective housing (6.5 kg CO2-eq/m²/year). Based on theserequirements, the RE2020 promotes the systematic use of renewable heat, achieving thephase-out of natural gas (excluding back-up) from 2021 in single-family houses and from2024 in collective housing as well as oil heating (excluding back-up) from 2021. The
RE2020 also encourages a minimum renewable heating rate in new buildings.
Existing buildings
Building on the Energy Renovation Plan for Buildings (2017-22), part of the Climate Plan,
the government recently presented its long-term renovation strategy to the European
Commission in 2020 with 12 actions along 4 priorities: 1) making building energy
renovation a national priority based on accessible data; 2) extending building energy
renovation to all citizens, in particular to combat energy poverty; 3) improving energy
efficiency in tertiary buildings, particularly public ones; and 4) accelerating the integrationof innovative solutions for energy efficiency of buildings (MTE, 2020b).
Poorly insulated housing and fuel poverty remain a concern in France. Out of 29 million
primary residence dwellings on 1 January 2018, 1.9 million (6.6% of the total) had low
energy consumption (categories A and B of the DPE), while 4.8 million, or 17%, had a very
high energy consumption (categories F and G of the DPE, also called energy sieves),
according to ADEME data in the national building observatory analysis (MTE, 2020b).
There were 7 million poorly insulated buildings in 2019, and half of them belonged to thepoorest 30% of the population, who spent more than 8% of their income on their energy
bill. Fourteen per cent of households suffered from the cold at home during winter 2019-20(compared to 15% the two previous winters). Forty per cent of households suffer from poor
insulation and 28% from insufficient heating systems (MTE, 2020c).
The government is strengthening building codes and labelling efforts, notably through thereformed DPE and the Low Consumption Building Renovation labelling, which will bepromoted through aid for implementing the so-called “global” renovations. In 2019, thegovernment also created a National Observatory of Energy Renovation.

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCY

Based on the 2019 Energy and Climate Law, DPE data are now collected by ADEME andprovided to local authorities and to the National Housing Agency. Data from the French
Family Allowance Fund (Caisse d’allocations familiales) concerning households receiving
the housing benefit (Aide personnalisée au logement) are also provided to National
Housing Agency to improve the targeted support for renovation. The government is also
increasing its efforts in sharing as open data the specifics of governmental buildings,
including floor area and type of energy used for heating.

A bill proposes to suppress this mandatory audit for leases, because lessees do not have the power to order energy
works in their rentals.

3

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As part of the 2019 Energy and Climate Law, France wants to eradicate the 4.8 million
inefficient homes (so-called energy sieves). Starting from 2022, a mandatory energy audit
will be required prior to the sale or lease 3 of dwellings, informing the prospective buyer or
lessee of future energy costs. A minimum energy performance criterion of 450 kWh/m²
year in final energy in the definition of “decent housing” will be required from 1 January
2023. Before 2028, a second phase will be implemented, requiring owners of inefficient4. ENERGY EFFICIENCY

homes to undertake renovations to improve the energy performance of the property. A
third phase, planned for 2028, will envisage sanctions for owners of properties that do
not comply with the renovation obligations.
Since 1 January 2020, the purchase or repair of heavy fuel oil boilers is prohibited ingovernment buildings. The plan is to end the use of fuel oil in government buildings
by 2029.
The long-standing energy transition tax credit (Crédit d’impôt pour la transitionénergétique, CITE) had been in place since 2014. This policy instrument provided anincome tax credit of 30% for expenditures related to certain building renovation work aimed
to improve the energy efficiency of private dwellings or the modernisation of heating
installations. On 1 January 2020, CITE was replaced by MaPrimeRénov’, which is a grant
accessible to all owners and co-owners. A new scale was set in 2020, taking account of
the energy efficiency of actions with a fixed-rate, simplifying the process for multi-unit
collective renovation projects. The grant rate is increased for low-income households, tocombat energy poverty. The National Housing Agency pays the benefits when therenovation work is performed.
The government also expanded and simplified the use of the éco-PTZ, the zero-rate
ecological loan for single action projects, using a flat-rate grant. Moreover, all energy
renovation works that are eligible for the CITE continue to be granted a discounted
value-added tax rate of 5.5%.
Financial measures to support the renovation of public buildings are planned under the
Major Investment Plan (2018-22) and the French COVID-19 Recovery Plan. The Recovery
Plan offers subsidised loans of up to EUR 4 billion for local authorities for the energy
renovation of public buildings, such as schools, sport facilities, graduate school buildings,
hospitals, nursing homes and state buildings, for a total of 15 million m².
The Recovery Plan also offers a tax credit for the energy transition of tertiary buildings ofsmall and medium-sized enterprises (SMEs), available from October 2020 to December
2021. France has an innovative programme for energy efficiency in buildings of SMEs.
The government set a target in 2019 to reduce the final consumption of buildings in thetertiary sector, with respect to 2010, by 40% in 2030, 50% in 2040 and 60% in 2060. Thistarget includes all tertiary buildings with a floor area of at least 1 000 m².

After a drop due to the financial crisis in 2008, energy demand in the transport sector
remained constant around 45 Mtoe between 2011 and 2019 (Figure 4.10). In 2019, oil
products accounted for 91% of energy demand in the transport sector, with diesel covering
the largest share (68%), followed by gasoline (18%). Biofuels (80% biodiesel and 20%
biogasoline) accounted for 7% of energy consumption in the transport sector. Electricity
still has a low share (2% in 2019) and is used mainly for rail transportation. However, thefleet of electric passenger cars has increased notably since 2020, surpassing 650 000
electric vehicles (EVs) and plug-in hybrids on the road in mid-2021 (AVERE, 2021). At thesame time, the number of EV charging points rose significantly, to about 45 700 at the endof 2020 (Figure 4.11). After Norway, Sweden, the Netherlands and Germany, France is
now catching up in Europe’s electric mobility market, reaching the levels of theUnited Kingdom for new car registrations (IEA, 2021c).

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Transport

Figure 4.10 Transport total final consumption in France by fuel, 2000-19
50
45
40
35
30
25
20
15
10
5
0

Mtoe
Electricity
Natural gas
Biofuels
Other oil products
Gasoline
DieselIEA. All rights reserved.

Transport sector consumption has remained flat. Ninety-one per cent of transport demand iscovered by oil products, but the share of biofuels is increasing.
Notes: Mtoe = million tonnes of oil equivalent. Transport sector demand excludes international aviation andnavigation.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Figure 4.11 Total fleet of electric cars and charging points in France, 2010-20
EV fleet
400 000
350 000
300 000
250 000
200 000
150 000
100 000
50 000
0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Charging points
50 00045 000Plug-in hybrid
40 000electric vehicles
35 00030 00025 000
Full electricvehicles
20 000
15 000
10 000Recharging points
5 000(right axis)
0

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCY

IEA. All rights reserved.

Source: EAFO (2021), France, www.eafo.eu/countries/france/1733/summary.

Road transportation, consisting mostly of passenger cars (58%) and freight roadtransportation (33%), accounted for 95% of domestic transport demand in 2018, with minor
shares of rail and domestic aviation. As of 2008, diesel has replaced motor gasoline as
the most used fuel in passenger cars. With an emissions level of newly registered cars of
111 g CO2/km in 2018, France ranks below the EU average of 122 g CO2/km(ICCT, 2020), thanks to the bonus/malus scheme.

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Transport accounted for 30% of TFC in 2019, or 45 Mtoe, or a 4% increase since 2009.
Between 2000 and 2018, the estimated cumulative energy savings in the sector were
26 Mtoe (20 Mtoe from passenger transport and 6 Mtoe from freight transport). In 2018,
the transport sector accounted for 30% of total GHG emissions in France, 43% ofenergy-related CO2 emissions and 62% of total NOX emissions.

4. ENERGY EFFICIENCYEnergy efficiency policies for the transport sector
Under the SNBC, the transport sector is required to reduce GHG emissions by 31%
by 2030 and achieve full decarbonisation by 2050. Emissions from the transport sector
have increased by 12% since 1990, and have remained constant since 2000 (similar to
the energy consumption trends shown above). The Mobility Guidance Law, enacted on
24 December 2019, sets the framework for achieving emissions reductions actions in thetransport sector. The law also sets out the goal of ending the sale of new light-duty vehicles
using fossil fuels by 2040. The new Climate and Resilience Law of 2021 bans the sale ofthe most polluting vehicles from 2030 onwards.
Energy efficiency of the transport system and the vehicles, together with the switch to
low-emission fuels (biofuels/biogas, electricity, hydrogen), are the key drivers to leverage
emissions reductions, alongside the reduction of transport demand and a modal shift.
The French strategy for improving energy efficiency in the transport sector relies on fiscal
measures to encourage the adoption of low-emission (high-efficiency) vehicles; support
for EVs and related charging infrastructure; and the promotion of clean mobility with twoand three-wheeled vehicles, carpooling and public transport, and bicycle lanes. The whitecertificates scheme also applies to the transport sector in France.
The government deploys financial incentives for the purchase of clean vehicles: subsidies(ecological bonus/malus, the scrappage or conversion scheme) and fiscal incentives.
Two subsidies can be used together: the ecological bonus of up to EUR 7 000 for thepurchase and replacement of old vehicles with new or used vehicles with emissions lower
than 132 g CO2/km or 137 g CO2/km (for used vehicles older than 6 months). Under thecurrent policy, the conversion bonus can be as high as EUR 5 000 for passenger cars and
EUR 9 000 for commercial vans for low-income households for buying an electric vehicle
with emissions less than 50 g CO2/km. The French government aims to reach 1 million
people with this bonus by 2022.
The bonus/malus system is a very effective way to encourage the purchase of lesspolluting vehicles and support the purchase of EVs. The system is being strengthened withhigher penalties (lowering the threshold by 3 g CO2/km in 2019 and by 5 g CO2/km in 2020
and 2021) and a new weight penalty of EUR 10/kg for all vehicles over 1 800 kg (excepthydrogen or EVs), aiming to counter the trend to larger and heavier sport utility vehicles inFrance.

In January 2020, the reduced diesel tax rate for freight transportation by road wasincreased by EUR 0.02/litre, and since 1 July 2021, the tax advantage for non-road diesel
vehicles has been removed. The solidarity tax on airline tickets is planned to be increased
to support sustainable transport infrastructure. The Climate and Resilience Law (publishedon 24 August 2021) prohibits domestic flights for short distances where a train ride offers
an alternative with a journey of 2.5 hours or less, offers further subsidies for electric bikes,
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There are also substantial subsidies for low-emission vans, trucks and buses, notably
used by cities. The government supports investments in clean heavy-goods vehicles,
extending the additional depreciation scheme for natural gas vehicles until 2024,
reinforcing the scheme for heavy-goods vehicles weighing less than 16 tonnes andestablishing technological neutrality to the measure, with the aim to extend it to vehicles
fuelled with hydrogen or electricity.

and empowers mayors to create low-emission zones in major cities and ban the sale ofthe most polluting vehicles. The introduction of the government’s vehicle air quality
certificate (Crit’Air) has allowed cities to regulate and reduce circulation during peakpollution times and ban old diesel vehicles from circulating in the cities. The certificate is
mandatory to drive into low-emission zones of cities. By 20 June 2021, around 20 million
certificates had been issued in France.
Financial incentives are in place for the roll-out of charging infrastructures with tax credits
and subsidies. The national programme ADVENIR develops smart charging infrastructure
for EVs in enterprises’, public entities’ and residents’ parking lots, and on roads with fast
charging stations. The programme also trains professionals and raises awareness among
local actors.
Through the Recovery Plan, the French government is investing EUR 1.6 billion in
low-emission vehicles, in addition to other funds for removing barriers to the fast
deployment of EVs and related infrastructure. As set out in the PPE, the government aims
to increase EV sales in France to 1.2 million by 2023 and 4.8 million by 2028, from about
657 881 in mid-2021 (AVERE, 2021). The charging infrastructure requires special
attention if France wants to meet its ambitious EV roll-out targets.
Regulatory measures and incentives are dedicated to the development of urban planningto further encourage the use of sustainable mobility. This includes widening low-emission
zones and adding dedicated lanes and parking spaces for two- and three-wheeled clean
mobility, including a package up to EUR 400 per user per year to encourage the use of
bikes and carpooling for commuters.
Multimodal mobility has also been promoted by lowering taxes on river navigation. Theenergy consumption tax has been extended to river navigation and the final electricity
consumption tax rate has been reduced for boats and ships using electricity directly when
docking. Under the Recovery Plan, rail transport will be upgraded with a view to reduce
highway freight transport, in addition to investments in new rail infrastructure(EUR 1 billion by 2024 and 12 billion in 2025-30).

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCY

Industry
France’s industry sector consumed 46 Mtoe, or 30% of TFC in 2019. In 2009, energy
demand in industry dropped to a record low due to the financial crisis, then recoveredin 2010-11, but not back to the levels prior to the 2008 financial crisis. Since 2011, energy
demand in industry started to decrease again to return to 2009 levels in 2018 and set a
new record low in 2019 (Figure 4.12). This is largely the result of relocation and closures.

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Oil is the single largest energy source in industry (39% in 2019), followed by natural gas(26%), electricity (24%), bioenergy (5%), heat (4%) and coal (3%). Between 2009
and 2019, the use of fossil fuel decreased: coal by 43%, oil by 11% and natural gas by10%; while bioenergy increased by 47% and electricity by 2%.

4. ENERGY EFFICIENCY

Figure 4.12 Industry total final consumption in France by source, 2000-19
60

Mtoe

50
40

Heat

30

Electricity
Bioenergy and waste

20

Natural gas

10

Oil

0

Coal
IEA. All rights reserved.

Energy demand in industry has been decreasing, led by a decrease in coal, oil and naturalgas. The use of bioenergy increased by 47% between 2009 and 2019.
Notes: Mtoe = million tonnes of oil equivalent. Includes non-energy use in the chemical and petrochemical sector.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

The largest industry subsector is chemical and petrochemical (39%), including energy use(40%) and of fuels used as raw material in the processes (60%) (Figure 4.13). Other large
energy consumers in industry are food and tobacco, agriculture/forestry, non-metallic
minerals (9%) and construction subsectors.
Figure 4.13 Industry total final consumption in France by subsector, 2019
Chemical and petrochemical
Food and tobacco

13%

Agriculture/forestry

4%
4%
4%

39%

Non-metallic minerals
Paper, pulp and print

5%

Machinery

9%
10%

Iron and steel

12%Construction
OthersIEA. All rights reserved.

The chemical and petrochemical sector was responsible for about 40% of energy
consumption in industry in France in 2019.
Source: IEA (2021b), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Energy efficiency policies for the industry sector

Several regulatory obligations apply to the industry sector. Energy audits are mandatory
for large companies under the EU EED (Article 8 of Directive 2012/27/EU) and the French
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IEA. All rights reserved.

To achieve carbon neutrality in 2050, the SNBC forecasts a significant drop in industry
emissions (-35% in 2030 and -81% in 2050 compared to 2015 levels).

Energy Code. Audits are performed in accordance with EN 16247. Companies which havean ISO 50001 certification are exempt.
The government also requires industry to carry out a cost-benefit analysis with regard to
the recovery of residual heat (for facilities above 20 megawatt thermal [MW th]), in line with
EU EED requirements (Article 14-5 of Directive 2012/27/EU, as part of the regime for
installations classified for environmental protection in the Environment Code).
The white certificates and ADEME’s heat funds have also been used in industry. Funding
is available through ADEME for biomass use for companies with more than 12 000
MWh/year of consumption); residual heat recovery; the installation of large solar thermal
surfaces for collective housing, industry, and the tertiary and agricultural sectors; and fordeep geothermal projects.
The 2020-22 Recovery Plan identifies decarbonisation of the industry sector as a priority,
allocating EUR 1.2 billion of additional support. This covers three new schemes:
1) investment aid for energy efficiency projects; 2) investment aid for industrial processes(electrification) and support for the production of renewable heat with both investment andoperational aid for large-scale projects; and 3) grants for small and medium-sized projects.

Assessment
Energy efficiency is the central pillar of France’s National Low-Carbon Strategy, and thegovernment is banking on a very ambitious decrease of final energy consumption by 50%
between 2012 and 2050, with a 20% reduction by 2030. In fact, France relies on theconcept of sobriety, in line with climate constraints. However, to maintain robust growth ofthe economy and consume less, productivity needs to increase and behavioural changes
to last.

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCY

The 2021-30 National Energy and Climate Plan aims to achieve a decline in primaryenergy consumption of 219 Mtoe in 2020 to 202 Mtoe in 2030, and a decline in final energy
consumption of 131 Mtoe in 2020 to 120.9 Mtoe in 2030. In 2019, final energy consumption
was 145.5 Mtoe, much above the 2020 target, which could only be achieved because of
the COVID-19 pandemic and the temporary dip in energy demand in France.
As of 2018, France achieved 322 TWh (27.7 Mtoe) of energy savings, which is on trackwith the progress requested by the Energy Efficiency Directive of 365 TWh (31.4 Mtoe) for2020. However, the targeted doubling of the savings by 2030 (to reach 758 TWh) will
require a major scale-up of cross-sector action, notably under the well-established whitecertificate scheme.

Under the Energy and Climate Law of 2019, the government relies on strong targets forthe reduction and phase-out of fossil fuel consumption (coal, gas and oil use) in heating,transport and industry in favour of greater electrification.
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France has made progress in strengthening building codes and labelling and has also
enlarged the application of energy audits for enterprises and enhanced measures toimprove the efficiency of the mobility system. Cumulative end-use energy efficiency
savings between 2000 and 2018 amounted to 260 Mtoe (11.1 PJ) in total. Sixty-four
per cent of savings were achieved in the residential sector, 26% in the service and industry
sectors, and 10% in the transport sector.

4. ENERGY EFFICIENCY

While France’s efforts are laudable, meeting the energy efficiency targets for 2030 will
require continuous progress. To put the country on the trajectory to 2050, pivotal changes
in the economic structure and consumer behaviour are required. While electrification is
also a driver for energy efficiency, electrification without energy efficiency can result inoverinvestment. Efficiency should therefore be tackled with priority across the energy
system, including through greater attention to energy system integration.
The energy saving certificates system is the key policy to achieve energy savings acrosssectors. A fifth period will start in 2022. The government should review the results of the
fourth period when designing the fifth one. Since its start in 2006, the obligation has
gradually increased (ten times) and energy efficiency services have been developed.
ADEME’s independent evaluation of the white certificates in 2019 found that thecertificates still created windfall profits (ADEME, 2019b). Among the 16 recommendations,
ADEME suggested the creation of an independent commission to periodically evaluate theactual energy savings. Most of the gaps have been filled in recent years through thereinforcement of measurement and verification processes and recalibration of expectedsavings from the certificate. Progress is visible with energy service company (ESCO)
schemes being created in France. In its latest 2019 review, ADEME showed that 59% of
CEEs were real energy savings. However, 41% of savings still relate to fraud and an
overestimation of energy savings.
In the scheme’s upcoming fifth period, the government plans a revaluation of standardised
operations lump sums and to increase the fight against fraud. The continued effort toimprove the scheme and its performance regarding the effectiveness of renovation, thework of ESCOs and the actual savings performed remains a vital task, in light of theambition to double energy savings in the next ten years.
Thanks to the big role of electric heating and leadership in times-of-use pricing, France
has great potential to increase digitalisation and smart grids to boost both decarbonisationand energy efficiency. The complete roll-out of smart meters in France presents anopportunity to reward flexibility, even at the residential level through the introduction of
dynamic prices, offers for smart charging or grid dispatch of EVs, week-end tariffs, andsuper off-peak hour products.

Buildings
Buildings (including residential and service sector buildings) were the main sector of TFC
in France in 2019 (with around 40% of TFC) and were responsible for 25% of national
GHG. Between 2000 and 2018, the cumulative estimated energy savings thanks to energy
efficiency improvements in residential buildings amounted to 171 Mtoe.
Past performance trends are far from the required climate and energy targets for buildings.
Climate neutrality translates into a 49% decrease in GHG emissions by 2030 (compared
to 2015 levels), with an envisaged 22% drop in energy consumption in the building sector
by 2030, 29% by 2040 and 41% by 2050.

With the entry into force in 2022 of the Environmental Regulation (RE2020), the carbon
footprint of the building material and heating systems will have to meet an emissions
performance standard of 4 kg CO2/m²/year for all new single dwellings and progressively
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Since the IEA’s last review in 2015, France has strengthened buildings regulations for new
constructions and the energy performance certificate.

for all multi-apartment buildings (6.5 kg CO2/m2/year). France is joining the Netherlands,
Sweden and the United Kingdom with these rules. It is expected that woody biomass andheat pumps will gain market shares.
In the renovation of existing buildings, however, overall progress has been limited, notably
in historic and old multi-apartment buildings and public buildings, such as hospitals,
schools and governments, because of structural barriers, insufficient awareness of theissues associated with reducing energy consumption, but also separate regulatory
standards for self-consumption and white certificate schemes. The creation of the National
Observatory of the Energy in Building Renovation in 2019 is a welcome development. This
will build on the excellent work of ADEME and others and should allow the government tobetter monitor the process. The High Council on Climate’s 2020 report found that only
0.2% of all renovations were providing a real increase in energy efficiency (HCC, 2020).
The HCC recommended a one-stop-shop for citizens to get access to all subsidies
available for renovation. Such a simplification is indeed a very important tool for making
major improvements in the renovation of buildings. A dedicated public investment bank,like the Bpifrance, could be a good tool to channel such funds, notably the éco-PTZ loans
with higher amounts and longer loan periods, similar to the experience of the German KfW.
Based on the 2019 Energy and Climate Law, a key focus for government action is theeradication of inefficient homes (so-called energy sieves) with the F or G performancecertificate.
France’s long-term renovation strategy, which was submitted to the European
Commission in 2020, outlines 12 actions along 4 priorities. The Energy Renovation Planfor Buildings (2017-22) is an important driver for public renovation efforts. Its aim is to end
the use of fuel oil in government buildings by 2029. The French government is also
increasing its effort to open data on the specifics of government buildings, including floorarea and type of energy used for heating.

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCY

Public funding remains critical for scaling up renovation and the mobilisation of private
finance and renovation progress. The Recovery Plan offers subsidised loans of up to
EUR 4 billion for state and local authorities for the energy renovation of public buildingssuch as schools, sport facilities, graduate school buildings, hospitals, nursing homes andstate buildings, for a total of 15 million m². School buildings represent 50% of the local
authorities’ building stock.

The government set a target for all tertiary buildings with a floor area of at least 1 000 m²
in 2019 to reduce final consumption. The Recovery Plan also offers a tax credit for theenergy transition of tertiary buildings of SMEs, available from October 2020 to December
2021. France’s exceptional scheme can provide lessons to other countries.
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The government is making major changes to existing schemes to improve access to
subsidies, bring together various public grants and loans to finance the remaining
expenses as well as easing access to the support of energy companies via the CEE. For
example, France changed its long-standing CITE into a subsidy. MaPrimeRénov’ is a
grant, which is expected to deliver renovation progress faster than a tax credit (whichcomes only the year after the expense). MaPrimeRénov’ is now available to all owners
and rental properties. The government has also facilitated the access and ease of fundingfor homeowners of multi-apartment buildings. Once implemented, the scheme can befurther improved and scaled up in the coming years.

4. ENERGY EFFICIENCYTransport
The French strategy for improving energy efficiency in the transport sector includes whitecertificates, fiscal measures to encourage the adoption of low- and zero-emission(high- efficiency) vehicles (bonus/malus scheme at the registration and scrappage
premium), subsidies for the purchase of EVs and charging infrastructure, and thepromotion of clean mobility with two- and three-wheeled vehicles and carpooling.
France was one of the first countries to adopt the target of phasing out the sale of newlight-duty vehicles that use fossil fuels by 2040, as part of the Mobility Law, but deploymentof EVs has been slower than expected. Other countries already have higher targets andmore ambitious timelines, including Germany and the United Kingdom. The government
should review efforts and emissions reduction ambitions to further accelerate efficiency
and the shift to cleaner vehicles. It is a good signal that the new Climate and ResilienceLaw 2021 includes a ban of the sale of the most polluting vehicles from 2030 onwards.
To meet its target, the government is investing EUR 1.2 billion under the Recovery Planon clean mobility, removing barriers to the fast deployment of EVs and related
infrastructure.
The SNBC projects for 2030 a 35% share of electric cars and 10% for hybrid cars in new
vehicles sales, 45% in total, up from 2.8% in 2019 for the two combined. Considering total
car sales of 2.2 million in 2019, this would mean about 1 million EVs sold in 2030 and
7 million public/private charging points. The 2020 PPE strengthened this target: thegovernment aims to increase the sales of plug-in hybrid and electric vehicles in France toover 1 million EVs on the road in France by 2023 and 4.8 million by 2028. This would mean
an increase from 657 881 in mid-2021 to 1.2 million in two years. However, the government
estimates it could meet the EV deployment target in 2023. The bonus/malus system has
worked very well in the past, but the recent Finance Law of 2021 has cut back the subsidiesof the Recovery Plan.
COVID-19 has led to a massive reduction in transport demand and behavioural changes
with a considerable modal shift. However, it remains unlikely that these short-term trends
in 2020-21 will be sustained in the medium term as the French economy reopens in
2021-22. Policies should focus on the long-term behavioural changes needed in vehicle
use and type and in the transport system as a whole.

Industry
Industry accounted for 30% of TFC in 2019, or 46 Mtoe, a 4% decrease since 2009. France
has several large energy-intensive sectors, notably chemical and petrochemical, foodand tobacco, agriculture and forestry, and non-metallic minerals.

Commendably, the 2020-22 Recovery Plan identifies the decarbonisation of the industry
sector as a priority, with an allocation of EUR 1.2 billion of additional support. This includes
energy efficiency and the production of renewable heat, supporting both investments andoperational costs of large-scale projects, and grants for SMEs. These measures are very
helpful to drive industrial transformation and to tap into the large potential for energy
efficiency in SMEs.
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While energy audits are mandatory in large industries, implementation of the audit results
is not. Implementation of measures with a pay-back time of 5 years or less could bemade compulsory to enhance the energy efficiency of the sector.

As a trade- exposed sector, France’s manufacturing industry could also benefit frominternational action. By joining the Super-Efficient Equipment and Appliance Deployment
initiative, led by the United Kingdom and co-ordinated by the IEA, France can show
leadership on ambitious appliance policy, publish transparent plans for raising ambition
between now and 2030 using all available tools, engage with the private sector toenhance trade in highly efficient products and engage with other economies to support
their market transformation to highly efficient appliances.

Recommendations
The government of France should:
 Review energy efficiency progress and identify sub-targets by sector and strengthen
measures and funding ranked by their cost-effectiveness to implement the 2030
energy efficiency goals.
 Strengthen the white certificates system, improve its effectiveness and enhancesynergies with other regulatory frameworks both for private housing and for industry
and further simplify administrative procedures.
 Accelerate the renovation of existing buildings in the residential sector and all publicbuildings and review the outcomes and effectiveness of all support instruments,
including the MaPrimeRénov’.
 Boost the policy measures on digitalisation and integrate times-of-use pricing, smart
systems/grids and renewable energy opportunities into energy efficiency policies aspart of a dedicated sector integration strategy.

ENERGY SYSTEM TRANSFORMATION

4. ENERGY EFFICIENCY Anticipate possible COVID-19 pandemic rebound effects by supporting policy
measures that ensure long-term changes in the mobility behaviours of French citizens,
including modal shift, electric mobility, walking and cycling.

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 Make mandatory the implementation of energy efficiency audit results in the industry
sector and join international efforts with industry and governments to scale up
standards.

4. ENERGY EFFICIENCY

References
ADEME (Agency for Ecological Transition) (2019a), Heating and cooling networks,
inventory of the sector: Markets, jobs, costs, https://librairie.ademe.fr/energiesrenouvelables-reseaux-et-stockage/818-reseaux-de-chaleur-et-de-froid-etat-des-lieux-dela-filiere-marches-emplois-couts.html.
ADEME (2019b), Evaluation of the Energy Saving Certificates system,
www.ademe.fr/sites/default/files/assets/documents/rapport-synthetique-evaluationcee_2020.pdf.
AVERE (European Association for Electromobility) (2021), Monthly barometer of electric
mobility: Key figures for August 2021, www.averefrance.org/Site/Category/?arborescence_id=247.
EC (European Commission) (2020), Assessment of the final NECP of France,
staff_working_document_assessment_necp_france_en.pdf (europa.eu).
EAFO (European Alternative Fuels Observatory) (2021), France,
www.eafo.eu/countries/france/1733/summary.
Eurostat (2021), Primary energy consumption and final energy consumption, Eurostat
Complete Energy Balances (database),https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_bal_c (accessed on
15 January 2021).
HCC (High Council on Climate) (2020), Renovate better: Lessons from Europe,
www.hautconseilclimat.fr/wpcontent/uploads/2020/11/hcc_rapport_renover_mieux_lecons_deurope.pdf.
ICCT (International Council for Clean Transportation) (2020), CO2 emissions from newpassenger cars in Europe, https://theicct.org/sites/default/files/publications/CO2-EUupdate-aug2020.pdf
IEA (International Energy Agency) (2021a), Net Zero by 2050: A Roadmap for the Global
Energy Sector, www.iea.org/reports/net-zero-by-2050.
IEA (2021b), World energy balances, IEA World Energy Statistics and Balances(database), accessed on 10 September 2021 www.iea.org/statistics.
IEA (2021c), Global Electric Vehicle Outlook 2021, www.iea.org/reports/global-ev-outlook2021.
IEA (2020), Energy Efficiency Indicators 2020 (database), accessed on 10 September 2021
www.iea.org/reports/energy-efficiency-indicators.
MTE (Ministry of the Ecological Transition) (2020a), National Energy and Climate Plan
(NECP), https://ec.europa.eu/energy/sites/default/files/documents/fr_final_necp_main_en.pdf.
MTE (2020b), Housing stock by energy consumption class, Le parc de logements parclasse de consommation énergétique | Données et études statistiques (developpementdurable.gouv.fr).

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MTE (2020c), Building Energy Renovation Plan, www.cohesionterritoires.gouv.fr/sites/default/files/202002/200210_Strat%C3%A9gie_de_r%C3%A9novation_2020_vf.pdf.

Key data (2019)
Renewables in total final energy consumption (TFEC): 19.4 Mtoe/15.8% of TFEC
(bioenergy* 12.2 Mtoe, hydro 3.7 Mtoe, wind 2.3 Mtoe, solar 1.0 Mtoe, geothermal 0.2 Mtoe)
Renewables in electricity generation (2020 estimated): 125.7 TWh/23.8%**(hydro 62.2 TWh, wind 40.7 TWh, solar 13.6 TWh, bioenergy* 8.6 TWh, tide/wave 0.5 TWh,geothermal 0.1 TWh)
Renewable shares:*** gross final consumption 17.2%, electricity 22.4%, heating andcooling 22.5%, transport 9.2%
Renewable 2020 targets: gross final consumption 23%, electricity 27%, heating andcooling 33%, transport 10.5%
Renewable 2030 targets: gross final consumption 33%, electricity 40%, heating andcooling 38%, transport 15%* Bioenergy includes solid primary biofuels, liquid biofuels and biogases, and excludes non-renewable industrial andmunicipal waste.
** According to the IEA definition: share of renewables in electricity generation.

ENERGY SYSTEM TRANSFORMATION

5. Renewable energy*** Computed according to Eurostat definitions for consistency with EU targets. Eurostat definitions include
normalisation of wind and hydro renewable electricity consumption, and multiplication factors for advanced biofuels
and renewable electricity in transport.

Overview
Developing renewable energy sources will be instrumental to reaching net zero targets
by 2050 and maintaining France’s low-carbon electricity mix, as the share of nuclear
energy is expected to decline from 70% in 2019 to 50% by 2035 in line with the 2019
Energy and Climate Law. France has the ambition to boost the share of renewable energy
to 33% in total energy consumption and 40% in electricity production by 2030. The
government set ambitious near-term targets under the PPE for 2023 and 2028. There is awidening gap between ambition and development on the ground.

Over the past decade, wind and solar photovoltaic (PV) electricity generation haveincreased, driving the share of renewables in electricity generation from 14% in 2010 up
to 24% in 2020. Hydropower represents half of renewable electricity generation.
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In 2021, France is examining a range of scenarios in preparation of a decision on the roleof nuclear in the electricity mix beyond 2035. The International Energy Agency (IEA) andRTE (the transmission system operator) jointly analysed the conditions for the technicalfeasibility of a power system with high shares of renewable energy towards 2050.

5. RENEWABLE ENERGY

However, France is not on track to meet its targets. France missed its target for a 23%
share of renewables in gross final energy consumption by 2020, but had 17.2% in 2019
and 19.1% in 2020 (provisional) (MTE, 2021). The gap to the 2023 targets under themultiannual plan (PPE) is massive: France needs to add 6 gigawatts (GW) of wind capacity(or 40% of total cumulative capacity to date) and almost double the solar PV capacity inthe remaining years up to 2023.
The delivery gap is mainly due to the very long permitting procedures, which entail
burdensome administrative authorisations, and lack of land availability, despite a range ofreforms under way. The government has engaged in legal changes to reduce
administrative barriers (Loi ASAP), address social concerns and opposition, but also
increase the say of local communities.
The revision of support mechanisms has been chaotic and their implementation takes too
long, like for new solar tariffs. The stop-go policies, notably the retroactive cuts on solar,
are undermining investors’ confidence and future investment. While services in charge of
renewable energy across government are very qualified, they are understaffed. The
country needs to make fast progress in the development of renewable energy byincreasing the effectiveness of its policies and support schemes.
In 2021, the government has started work to promote a stronger regionalisation of therenewable energy planning, with regional targets under the PPE, as reflected in the 2021
Climate Resilience Law (adopted on 24 August 2021). Close co-ordination and dialogueof national and regional plans and targets is needed to prevent the regional targets from
actually hampering wind energy deployment.
Renewables accounted for 22.5% in heating and cooling and 9.2% in transport in 2019.
France has had a dedicated support scheme for renewable heating, but progress on the
ground remains limited. To shift heating and cooling to renewable energy sources, theconsistency of targets and support will be important, notably considering the end of support
for co-generation1 (biomass/natural gas) and reduced support for biogas/biomethane.

Progress towards renewable targets

1

Co-generation refers to the combined production of heat and power.

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Under the European Union’s (EU) Renewable Energy Directive (RED-I), France had atarget to reach 23% renewables in gross final energy consumption by 2020. Starting froma low level, France saw major increases in the share of renewables across heat, transportand electricity. However, France is not on track to meet its overall 2020 target for
renewable energy, projected to be 19.1% in 2020 (preliminary data). For the heat sector,
France only achieved 40% of the targeted share by 2019 and is also below target forelectricity.

Table 5.1 France’s renewable energy targets by sector for 2020 and 2030
2019 (share in %)2020 target

2030 target

Total total final consumption

Sector

17.2%

23%

33%

RES-E

22.4%

27%

40%

RES-H/CRES-T (green gases)

22.5%

33%

38%

9.2% (7% of

10.5%

15% (10%)first-generation biofuels
achieved)

Note: RES-E = electricity from renewable energy sources. RES-H/C = renewable energy heating/cooling. RES-T =renewable energy sources in transport.
Sources: EC (European Commission) (2021), Energy from Renewable Sources (database),https://ec.europa.eu/eurostat/web/energy/data/shares; MTE (2020a), National Energy and Climate Plan (NECP),
https://ec.europa.eu/energy/sites/default/files/documents/fr_final_necp_main_en.pdf.

EU 2019 data show that renewables accounted for 17% of gross final energy consumption
in France, 2 22% each of electricity generation and of heating and cooling demand, and 9%of transport demand (Figure 5.2). The gap to the 2020 target is wide.
Figure 5.1 France’s renewable energy by sector, 2019
Mtoe
25

25%

20

20%

15

15%

10

10%

Heat pumps

5

5%

Bioenergy0Gross final energy consumption

0%Electricity

Heating and coolingTransport

Solar
Geothermal
Electricity in transport
Wind
Hydro

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

Renewable share (right axis)
IEA

IEA. All rights reserved.

While renewable energy in heating and transport is dominated by bioenergy, renewableelectricity is more diversified and comes mainly from hydro and wind.
Notes: Mtoe = million tonnes of oil equivalent. Shares of renewables are computed using the Eurostat definition.
Source: EC (2021), Energy from Renewable Sources (database),https://ec.europa.eu/eurostat/web/energy/data/shares.

Gross final energy consumption, as defined in Directive 2009/28/EC, covers energy commodities delivered for energy
purposes to final consumers (industry, transport, households, services, agriculture, forestry and fisheries), including
the consumption of electricity and heat by the energy branch for electricity and heat production, and including lossesof electricity. Electricity generated by hydropower and wind has to be normalised for annual variations (hydro 15 years
and wind 5 years).

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2

5. RENEWABLE ENERGY

Figure 5.2 France’s progress towards 2020 and 2030 goals for renewable energy
deployment
45%

Share of renewables
Electricity

40%
35%
30%

Heating andcooling25%
20%

Gross final
consumption

15%
10%

Transport

5%
0%
2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030 IEA. All rights reserved.

Source: EC (2021), Energy from Renewable Sources (database),https://ec.europa.eu/eurostat/web/energy/data/shares.

For 2030, France has set targets in its National Energy and Climate Plan for thecontribution of renewables in gross final consumption (33%), electricity (40% of
renewables power production in total power generation), heating and cooling (38%by 2030), and transport (15%).

Trends in renewable energy by sector
IEA data show a positive trend: the share of renewables in France’s total final energy
consumption (TFEC) 3 was 15.8% in 2019, a 31% increase since 2009 (Figure 5.3).
Renewables energy consumption in France consisted mainly of bioenergy (63%),
followed by hydro (19%) and wind (12%). Energy consumption from solar power isincreasing fast, but still only accounted for 5% of renewable TFEC in 2019. Geothermal
contributes to renewable electricity and heat.

TFEC excludes non-energy use, which is counted in total final consumption (TFC). TFEC provides a more accurate
assessment of the share of energy demand covered by renewable energy and is better aligned with the EU’s grossfinal energy consumption metric, which is used to set EU member states’ renewable energy targets. However,feedstocks included in non-energy use may end up as energy use and contribute to CO2 emissions.

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The highest penetration of renewables is in the industry sector, where renewablesources meet 24% of the total sector’s energy consumption (excluding non-energy use,such as feed stocks in chemical and petrochemical), followed by buildings, where they
cover 20% of energy consumption. In both cases, renewables consist mainly of solid
biomass and renewable electricity (Figure 5.4).

Figure 5.3 Historic trend of renewable energy in total final energy consumption in
France, 2000-19
20
18
16
14
12
10
8
6
4
2
0

Mtoe

20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%

Hydro
Geothermal
Solar
Wind
Bioenergy (electricity)
Liquid biofuels (direct use)
Solid biomass (direct use)
Share of renewables (right axis)
IEA. All rights reserved.

While renewables in total final energy consumption are still dominated by bioenergy, growth
in recent years has been driven by solar and wind.
Note: Mtoe = million tonnes of oil equivalent.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Renewable heating and cooling are mainly provided by bioenergy (and heat pumps), withsmall contributions from solar and geothermal. Biofuels cover most of the renewableenergy used in the transport sector. Renewables provide 7% of the energy needs intransport (without considering the EU’s multiplication factors for advanced biofuels andrenewable electricity in transport).
Figure 5.4 Renewable energy consumption by sector in France, 2019
14

Mtoe

30%

12

25%

10

20%

8

15%

6
4
2
0

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

Industry

Buildings

Transport

Solar thermal
Renewable electricity
Other bioenergy

10%

Biofuels5%

Solid biomass

0%

Renewables share (right axis)
IEA. All rights reserved.

Renewables cover 12% of buildings energy demand, 7% of transport and 5% of industry.
Notes: Mtoe = million tonnes of oil equivalent. Ambient heat harnessed by heat pumps is not represented here due tolimited data availability, but represents an increasing share of renewable heat supply in buildings and industry.

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Source: IEA (2020a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

5. RENEWABLE ENERGY

Policies and measures
In April 2020, the government presented an updated National Low-Carbon Strategy(Stratégie Nationale Bas-Carbone, SNBC) to align with France’s pledge for climate
neutrality by 2050. The SNBC includes targets by fuel, in line with the 2019 Energy andClimate Law. For renewable energy, the government translated the SNBC’s goals into
concrete targets for two five-year periods up to 2028 under the updated multiannual
energy plan (PPE) of 2020.
The PPE sets out the calendar of renewable energy tenders until 2028 and progress isreviewed every five years. The government adopted sector (non-binding) targets forelectricity, heating/cooling and transport under the National Renewable Action Plan,
which are now integrated into the National Energy and Climate Plan. France did not yet
set the targets for the sources of electricity beyond 2035. To assess scenarios of higher
shares of renewable electricity, the IEA and RTE presented a joint study in 2021 (seeBox 5.1).
Table 5.2 France’s targets by fuel for the electricity mix up to 2035
2023

2028

2030

2035

Renewables

27%

33-36%

40%

45%

Nuclear67%

59-61%-

50%

Fossil fuels

6%

5%

5%

5%

Note: 2035 targets are only indicative as opposed to the binding 2020 and 2030 targets.
Sources: MTE (2020b), National Low-Carbon Strategy, www.ecologie.gouv.fr/sites/default/files/2020-0325_MTES_SNBC2.pdf; MTE (2020c), PPE (with a range outlining the two scenarios),
www.ecologie.gouv.fr/sites/default/files/20200422 Programmation pluriannuelle de l%27énergie.pdf

Renewables in electricity

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According to IEA data, between 2010 and 2020, renewable electricity production in
France increased from 14% to 24% of total power generation, thanks to growing
generation from solar, wind and bioenergy (Figure 5.5). Generation from hydro formeda strong basis, providing almost half of renewable electricity generation in 2020, withfluctuations between 45 terawatt hours (TWh) (2011) and 72 TWh (2013), depending onwater availability. In 2020, 126 TWh of electricity was generated using renewable energy
sources: 57 TWh from hydro, 35 TWh from wind, 13 TWh from solar and 9 TWh frombioenergy.

Figure 5.5 Renewable electricity generation in France, 2004-20
140

TWh

25%
Hydro

120

20%

100
80

15%

60

10%

40
20
0

Geothermal
Tide, wave and ocean
Solar photovoltaics
Wind
Biogas5%

Primary solid biofuels

0%

Renewables share (right axis)

Renewable waste

IEA. All rights reserved.

Wind and solar photovoltaic electricity generation increased significantly between 2010
and 2020, driving the share of renewable electricity generation up to 24% in 2020.
Note: TWh = terawatt hour.
Sources: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

The PPE sets two five-year plans for each technology and envisages a five- to sixfold
increase in solar PV capacity and a 2.5-fold increase in wind capacity by 2028, from 2017
levels. As shown in Table 5.3, the gap is widening; progress to the 2020 target is low, but
the distance to the 2023 target even greater. Between 2020 and 2023, solar PV capacity
needs to almost double, and wind would need to add 6.4 GW (i.e. 40% of total cumulative
capacity to date) in three years. The first offshore wind farm in France will becommissioned in 2022. Only one floating prototype of 2 megawatts (MW) (Floatgen) is inoperation. Construction works have started for the wind parks in Saint-Nazaire and
St Brieuc.

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

Table 5.3 Targeted promotion of renewable electricity capacity (GW)
Source

2021

2023

2028

Hydro

25.6

25.7

26.4-26.7

Onshore wind

17.7

24.1

33.2-34.7

Offshore wind0

2.4

5.2-6.2

Solar photovoltaic

11.9

20.1

35.1-44.0

Biomass

0.67

0.8

0.8

0.5

0.27

0.34-0.41

0.014 (2019)

0.024

0.024

73.5

101-113

Biogas/biomethane
Geothermal
Total

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Sources: MTE (Ministry of the Ecological Transition) (2021a), Renewable energies in France in 2020 – Monitoring of
Directive 2009/28/EC relating to the promotion of the use of renewable energies, www.statistiques.developpementdurable.gouv.fr/les-energies-renouvelables-en-france-en-2020-suivi-de-la-directive-200928ce-relative-la-promotion.
MTE (2020c), PPE (with a range outlining the two scenarios), www.ecologie.gouv.fr/sites/default/files/20200422
Programmation pluriannuelle de l%27énergie.pdf

5. RENEWABLE ENERGY

Box 5.1 Technical conditions for a power system with a high share of renewables inFrance towards 2050
The Ministry of the Ecological Transition commissioned a framework report jointly from the IEA
and RTE, France’s transmission system operator, to identify the conditions and requirements
to assess the technical feasibility of a power system based on very high shares of renewables.
The report was published on 27 January 2021 and outlines four groups of strict conditions thatneed to be met to integrate very high shares of renewables in a technically secure way in alarge and meshed power system such as that of France.
Power system strength: Even if they still need to be proven at large scale, there is generalscientific consensus that technological solutions to maintain system strength – and therefore
stability – without conventional generation exist in several cases. Specific difficulties are
expected in the case of a system with a significant share of distributed solar photovoltaics (PV).
Further assessment of the impacts of distributed PV on the power distribution network and theirimplications for electricity security is needed.
System adequacy: This is the ability of a power system to cope with a given load at all times.
It can be ensured even in a system mainly based on variable renewables, as long as substantial
sources of flexibility are available, including demand response, large-scale storage, peakgeneration units, and well-developed transmission networks and interconnections. The
maturity, availability and cost of different flexibility mixes need to be further evaluated.
Operational reserves: The sizing of these reserves and the regulatory framework for balancing
responsibilities and procurement would need to be substantially revised in a large power systemsuch as France’s. Moreover, forecasting methods for variable renewables would need to becontinually improved.
Grid development: Substantial efforts would be necessary beyond 2030 at both transmission
and distribution levels. This requires strong proactive steps and public engagement in long-termplanning to assess costs and work with citizens on social acceptance of new infrastructure.
These efforts can nonetheless be partially integrated into the renewal of ageing network assets.
Assessing the costs of these conditions is outside the scope of the joint study. However, thereport underlines that costs may be substantial and that these conditions have deeper technicaland social implications.
On 27 January 2021, RTE opened a public consultation assessing this framework andassumptions of these future scenarios, and further studies – building on the conclusions of theframework report – are necessary to assess the different options to reach carbon neutrality by
2050 in France.

Source: IEA (2021c), Conditions and Requirements for the Technical Feasibility of a Power System with a High Shareof Renewables in France Towards 2050, https://www.iea.org/reports/conditions-and-requirements-for-the-technicalfeasibility-of-a-power-system-with-a-high-share-of-renewables-in-france-towards-2050.

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In October 2021, RTE published its full assessment of different electricity scenarios towards
carbon neutrality (RTE, 2021).

Renewable electricity support schemes
France promotes renewable electricity through feed-in tariffs 4 for small-scale renewable
plants and feed-in premiums issued in tenders for large-scale facilities. Large-scaletenders have been organised for offshore wind, onshore wind, solar rooftop and biomass
co-generation projects. The new call for a tender5 for 2021/26 was approved on 27 July
2021 by the European Commission (onshore renewables with a budgetary commitment
up to EUR 31 billion [bln] over 20 years). The Commission also approved a EUR 5.7 bln
aid scheme to support renewable electricity production from small solar installations
located on buildings in August 2021. Support to biomass and natural gas-fired
co-generation ended.
Over the past decade, there have been significant changes in financing for renewableenergy support. Until 2016, renewable energy support was financed by the consumer
through public service charges on electricity. In 2010, the government declared a fourmonth moratorium on new solar PV projects to change to a new feed-in tariff framework(Figure 5.6). Later, the support was financed mainly through the internal tax on final
consumption of electricity (EUR 22.5/MWh) and tax revenues from excise duties and from2017 onwards, only through the domestic consumption tax on polluting energy products(oil and coal).

9 000

Biomethane injection

8 000

Other

7 000

Natural gas co-generation

6 000

Biogas

5 000

Biomass

4 000

Hydraulic
Offshore wind

3 000

Onshore wind

2 000

Solar post-moratorium

1 000
0

Solar pre-moratorium

2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047

Annual charges (Million EUR)

Figure 5.6 France’s renewable electricity budgetary commitments (20 years)

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

Scenario 56
Scenario 42

Note: Scenario 42 and Scenario 56 are part of the PPE reference scenarios for the share of renewable energy in theenergy mix. Co-generation refers to the combined production of heat and power.
Source: MTE (2020).

4
5France uses feed-in tariffs for small projects (PV < 100 kW, onshore wind).
https://ec.europa.eu/commission/presscorner/detail/en/IP_21_3922.

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As of January 2021, the support is charged to the state budget, in line with the 2020
Finance Law. In 2021, the budget support for renewable energies accounted for more thanEUR 6 bln, including EUR 5.7 bln for electricity and EUR 544 million for biomethane
injection (Figure 5.6). The total cost of renewable energy support committed over theperiod 2000-19 amounts to EUR 140-154 bln (MTE, 2019). Only EUR 38 bln has been
paid so far, while the lion’s share of EUR 102-116 bln remains to be paid in the coming
decades.

5. RENEWABLE ENERGY

Large-scale tenders have seen long procedures. The time until the bidding results areannounced and the tender awarded is very long, much longer than in other European
countries, which accumulates delays in the PPE calendar of tenders.

Grid connection
Connection to the grid has not been a major issue in France. France developed a special
legal framework for the development and connection of renewable energy sources, theso-called Regional Connection Schemes to Renewable Energy Networks (S3RenR
scheme) to share the costs at the regional level among the renewable project operatorsand for a small part by the transmission and distribution system operators. The
transmission system operator RTE elaborates and implements the schemes. This planning
exercise intends to give visibility to the producers and to share equitably the costs among
them. Previously, costs were supported only by few producers because of thresholds
inside the connection procedures. A state representative in each region formally approves
the cost per megawatt. Conversely, for the development of offshore wind, RTE ensuresand invests in the necessary grid connections.

Wind power
In 2021, France had 17.7 GW of onshore wind energy connected to the grid and 3.6 GWof offshore wind projects awarded through tenders and calls for projects (no project isonline yet).
French authorisation procedures for onshore wind are very restrictive compared to othercountries, classifying wind turbines as a potential threat to heritage, landscaping and theenvironment as a whole (installation classée pour la protection de l’environnement).
Moreover, spatial constraints, including for defence and civil aviation purposes, such as
radars perimeters, remain high and require greater co-ordination across government witha clear prioritisation of renewable energy deployment. The required radar distance of
30 km was extended to 70 km in 2021, which has a negative impact on deployment.
The PPE sets out the calendar of tenders and ensures visibility; however, tenders aredelayed for several reasons, from public acceptance issues to lengthy permitting
procedures and litigation. Special wind zones were abolished in 2013. Today, tenders are
based on price and the zones with the lowest levelised cost of electricity benefit fromrenewable deployment. Current progress is slower than the tender schedule in the PPE,
but there is no consistent tracking of permits or the delays encountered. The latest
evaluation of the tenders awarded by the government versus the targets under the PPE
dates back to 2016.

There is a lack of planning co-ordination of the different national government entities thatwork on urban planning, biodiversity guidelines and even the regional plans for spatialplanning, sustainable development and equality (schémas régional d’aménagement, dedéveloppement durable et d’égalité des territoires, SRADDET) approved by the state andthe regional climate-air-energy plans (plans climat-air-énergie territoriaux, PCAET).
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France has passed legislative reforms on environmental authority, administrative
simplification and litigation treatment, which all allowed the legal framework to be simplified
and secured, including the limitation to first and last instance rulings of the administrative
appeal courts, a simplified environmental permitting, and the removal of construction
permits. The Loi ASAP (Law No. 2020-1525 of 7 December 2020) has been a major step
forward. The implementation of these reforms is ongoing in 2021.

In May 2021, the Ministry of the Ecological Transition announced a national Onshore Wind
Charter for 2022, to be prepared together with the industry and regions. This would involve
the preparation of guidelines for best practices shared across France on permitting andpublic engagement. In this context, the Minister of the Ecological Transition requested theprefects of the regions to carry out a mapping exercise of the favourable onshore windzones for fall 2022, in consultation with the regional directorates for the environment,planning and housing and the local municipalities. Each year by 1 June, an annual
summary of the state of play in ongoing authorisations should be prepared by thedepartments of each region to better track the onshore wind deployment. The government
is discussing how to best support local engagement by creating a regional split of the PPE
for renewables, for instance in the form of renewable energy zones or regional targets, inclose co-operation with the local authorities and others. The 2021 Climate and ResilienceLaw has provisions that allow mayors to get advanced information about onshore windprojects, but does not provide them with a veto right.

Offshore windFrance has seen important delays in offshore wind. The first investment decisions were
only taken in 2019. The first six commercial projects have had to discover and deal withseveral barriers, notably court proceedings, and lengthy planning procedures, led by theindustry consortia.
Offshore wind deployment is low by European comparison, considering the competitivenessof the technology and economies of scale in Europe. With 11 million km² of territorial
waters under French jurisdiction and 20 000 km of coastline, France has both an extensive
and wind-abundant seafront. France is, however, aiming to catch up with Germany, theNetherlands and the United Kingdom, which is reflected in the increasing targets in the
PPE: France plans to award close to 3.5 GW (including 3 floating wind farms of 250 MWeach) by 2023 and at least 1 GW/year starting in 2024.

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

The results of the Dunkirk project were announced in April 2021. For the Dunkirk offshore
wind farm (600 MW), Eoliennes en mer de Dunkerque (EMD), a consortium of EDF
Renouvelables, innogy and Enbridge, was selected at a strike price of EUR 44/MWh. The
Normandy (bottom fixed offshore wind) and Brittany (floating offshore wind) tenders arestill under discussion.

France used to have a semi-centralised model for offshore wind planning. Developers andconsortia had to take all the necessary steps for siting, permitting and financing. Project
developers needed to consult with the local authorities and civil society through a publicdebate. Due to the important delays, the financial terms of the project changed since theirfirst conception and renegotiations of contracts were necessary. These renegotiations
were achieved in 2018. Along with the development of the first offshore wind farms in
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Under the PPE, three calls for tenders are planned for bottom fixed wind farms of 2.75 GW
and three tenders for floating wind farms totalling 0.75 GW in the first period of the PPE(2019-23), and 1 GW per year (bottom fixed or floating) from 2024 onwards. For bottom
fixed wind turbines, a request for tenders for a capacity of 1 GW MW is planned to belaunched in 2021-22 in the south Atlantic. For floating wind power, the first 250 MW tenderis planned to be launched in south Brittany in 2021, followed by two tenders in the
Mediterranean in 2022. The target prices for floating wind represent almost twice the target
price of bottom fixed wind power (EUR 120/MWh, EUR 110/MWh).

5. RENEWABLE ENERGYFrance, manufacturing plants (most notably, GE, LM Wind, Siemens Gamesa andChantiers de l’Atlantique plants) were developed and will provide significant local content
to these projects.
Building on the lessons on these first farms, France has passed legislative reforms tosimplify the legal framework and accelerate processes. The Façade Strategic Documents
define the objectives for integrated sea and coastal management, providing for a map witha zoning system identifying zones for the development of wind farms. RTE is now in chargeof providing the connection and has adapted its standard grid connection to offshore wind.
Thanks to the ESSOC Law (Law No. 2018-727 of 10 August 2018), the government is now
in charge of technical and environmental studies for the derisking of the projects as wellas consultation with civil society through a public debate aiming to discuss the propertiesof the farm, especially its location. A simplified environmental permitting (the “permis
envelope”) scheme has also been created. In October 2020, the French parliament
adopted the Loi ASAP (“acceleration and simplification of public action”). Article 55
authorises the launch of tender procedures prior to the completion of the public
consultation, when the choice of the site is not yet official, and supports faster litigation
procedures with the important role of the Council of State as first and last instance. It also
limits the duration of the public debate to four months and enables the organisation of
public debates at the façade level to decide on the location of several offshore wind farms.
This is a major step forward.
In Europe, Denmark and the Netherlands are going one step further and have centralised
one-stop shop models for offshore wind development. These governments take the leadin the identification of suitable offshore wind zones, the selection of the sites, theorganisation of the permits as well as the award of the financial envelope through tenders.
Permitting procedures and tenders are awarded independently of litigation procedures.
Tenders can be rolled out at scale and are industrialised.

Solar power
France has ambitious solar PV targets under the PPE, which will require doubling installedcapacity in three years up to the end of 2023. However, lack of land eligibility, grid accessand lack of administrative resources, regulatory barriers and stop-go support policies are
currently preventing France from achieving the targeted 23 GW by end 2023, up from11.5 GW in March 2021.

6
The self-consumption framework is based on an ordinance (ratified by parliament in February 2017) and a decree(No. 2017-676), which became effective in 2018.

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France offers feed-in tariffs for small-scale solar PV (up to 100 kilowatt peak [kWp] on
rooftops), which can use the scheme for individual and collective self-consumption. 6 Under
this scheme, net metering is not allowed and the French regulatory authority CRE
regulates a specific grid tariff for self-consumption, notably for collective users. Small
self-consumers (< 3kW) can be exempted from balancing responsibility for the surplus fed
into the grid. The distribution system operator (DSO) must ensure the transparent and nondiscriminatory conditions for the implementation of self-consumption projects and must
deploy separate smart meters and a contract between the DSO and the legal entity forcollective users. Self-consumption is exempt from the domestic tax on the final
consumption of electricity (TICFE) for every project under 1 MW which has improved thebusiness case for solar PV installations in private homes, business and industrial sites inFrance. Support for large-scale projects (rooftops of 100 kWp – 8 megawatt peak [MWp]and ground solar PV from 500 kWp) is tendered.
In 2020, the Ministry of the Ecological Transition proposed to revise downwards the solar
PV subsidies (feed-in tariff level) for a small number of ongoing projects in their remaining
years of contracts until 2030. The law has been adopted but is under review by the Councilof State, as it has created controversy among project developers and investors. This
unilateral contract modification by the government affects ongoing projects and reduces
the generous solar PV tariffs allocated between 2006 and 2010 (reaching EUR 600/MWh
for building integrated PV in 2009) with power more than 250 kWp. The French Recovery
Plan does not have any additional incentives for the solar sector.
Building regulations, notably the Climate and Resilience Law, mandate solar PV rooftop
installations on certain large buildings. They are based on the French Energy Transition
Act (2015), which mandated all new buildings built in commercial zones to either be
partially covered with vegetation or solar PV. Despite these important upcoming legal
provisions, there are many administrative barriers relating to the building code, urban
planning and net metering. Municipalities should be supported in the mapping of the solar
potential and project development, in particular on commercial buildings, including parking
lots. By implementing those measures, France could make fast progress towards its targetof 40 GW for 2028.

Renewables in heating and cooling
In France, heat production accounts for half of energy consumption and is still largely
based on fossil fuels.

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

Figure 5.7 Renewable energy in heating and cooling in France, 2004-19
16

Mtoe

25%

14

20%

12
10

15%

8
10%

6
4
2
0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Renewable waste
BiogasSolar thermal
Heat pumps
Liquid biofuels

5%

Solid biomass

0%

Renewable share(right axis)
IEA. All rights reserved.

Renewable energy in heating and cooling has been growing, thanks to stable contributions
from biomass and the growth of heat pumps in recent years.
Notes: Mtoe = million tonnes of oil equivalent. Shares of renewables are computed using the Eurostat definition for
consistency with EU and national targets. This does not include direct use of electricity for heating.

Heat supply in France has already started the transition away from fossil fuels. The use ofoil, natural gas and coal has decreased, while the share of bioenergy has increased.
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Sources: EC (2021), Energy from Renewable Sources (database),https://ec.europa.eu/eurostat/web/energy/data/shares.

5. RENEWABLE ENERGY

In 2019, 22% of heating and cooling in France was provided by renewable sources. Among
those, bioenergy plays the largest role, followed by heat pumps, and small shares ofgeothermal and solar thermal (Figure 5.7). However, by IEA comparison, France ranks
12th when it comes to the share of renewable heat in total heat generation.
The PPE aims to increase the production of renewable heat by 60% compared to 2017
levels (ranging from 219 TWh to 247 TWh in 2028, or 34-38% of the total consumption ofheat) (see Table 5.3). To date, only half of the 2020 heat target has been achieved(Table 5.4).
The amount of renewable heat and cold recovery delivered by district networks is targeted
to double compared to 2016 (ranging between 32.4 TWh and 38.7 TWh in 2028).
Table 5.4 France’s targets for renewable heat under the PPE 2020 (TWh)Heat by source

2017

2023

2028 (low)2028 (high)Biomass

120

145

157

169

Aerothermal heat pumps

23.5

35

39

45

Geothermal heat pumps

3.14

4.6

5

7

Deep geothermal energy

2

3

4

5.2

Thermal solar

1.18

1.75

1.85

2.5

Biogas (including injected biogas)

4

7

12

18

Total

154

196

219

247

Source: MTE (2020c), PPE,
www.ecologie.gouv.fr/sites/default/files/20200422%20Programmation%20pluriannuelle%20de%20l%27e%CC%81n
ergie.pdf

Policies and support schemes
The main support tools for RES-heat are the Fonds chaleur administered by the French
Agency for Ecological Transition (Agence de la transition écologique, ADEME)(EUR 350 million per year) and the white certificate scheme (certificats d’économied’énergie), complemented by funding from the Recovery Plan for the heat applications forthe decarbonisation of industry (EUR 1.2 billion over the period 2020-22). Support levels
are much lower than the funding provided for renewable electricity.
Between 2009 and 2018, ADEME committed EUR 2.16 bln to support local authorities andbusinesses across all sectors and leveraged EUR 6.7 bln of investments. In addition, theFrench Recovery Plan provides for investment and operating aid of EUR 1.2 bln over two
years (2020-22) for the decarbonisation of industry, with a focus on energy efficiency andlow-carbon heat projects.

Renewable heat has also been incentivised through the CEE, with bonuses to help saveenergy for industry materials, equipment for individuals, zero-interest loans (éco-PTZ) andthe energy transition tax credit (CITE) (which has been converted into the broader
MaPrimeRénov’) as well as through the revised energy performance diagnostic (DPE),
which now introduces a greenhouse gas-based criteria that can favour on-buildings RES
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The government ended support for co-generation based on natural gas or solid biomass.
It prioritises the support for heat (over electricity) and has reduced support for biogas cogeneration to prioritise gas injection.

installation. The support schemes have been broadened and simplified over time and are
more and more dedicated to heating/cooling (heat pumps, very efficient gas boilers), eventhough these programmes are not explicitly geared to investment in renewable energy.
Biomethane/biogas support
In less than ten years, biomethane injection capacity has reached 3.9 TWh (214 sites
injecting into the gas grid at the end of 2020), equal to the consumption of 900 000
households and more than 15 000 BioCNG and is growing by 60% per year (MTE, 2021b).
During the period 2021-23, another 150 sites, or 3 TWh, per year will be added.
Since the 2015 Energy Transition for Green Growth Act, France has had the ambition ofreaching a share of 10% of biogas in total gas consumption in 2030. The PPE has set abiogas target of 7% of gas consumption in 2030 and up to 10%, depending on the decline
in costs.
Third-party access to the gas network applied to biogas producers prior to 2018. Since
then, gas network adaptation costs are no longer solely borne by biogas producers, buthave been shared between all gas network users. In 2018, the Agriculture and Food Law(EGAlim Act) established a support scheme for adapting the infrastructure necessary formore biomethane injection.
In 2020 and 2021, France implemented the EU RED II Directive and the government
lowered the support tariff for biomethane. The revision of the support schemes was rather
chaotic. The new support scheme gives priority to the injection of biogas into the naturalgas grids (biomethane) over power generation. Funded by the state budget, thebiomethane feed-in tariff provides for a 15-year contract with a purchase guarantee at an
average tariff of EUR 103.3/MWh, compared to the price of natural gas of EUR 13/MWh.
There is a more restricted support for electricity generation from biogas. Biogas plants witha power capacity of 300 MW or more located in an area served by a natural gas network
are requested to inject their biogas production into the natural gas network.

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

In 2021, France will launch a new tender scheme for medium and large biomethane plants
with two calls for tender each year for an annual production objective of 350 gigawatt hours(GWh) per year each. The calls for tender will be built on a purchase price trajectorybaseline, with the aim of achieving an average of EUR 75/MWh for the injected biomethane
projects selected in 2023 and EUR 60/MWh in 2028.
Small-scale biomethane plants can receive new feed-in tariffs. They can be adjusted
downwards if the contracted biogas production capacity is higher than the annual target of
800 GWh per year. A new support scheme (feed-in premium) for biomethane not injectedin the gas networks will be implemented for biomethane used directly for bio natural gas
vehicles.

Renewables in transport

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In 2019, renewables accounted for 7.4% of France’s transport demand. Based on theEurostat definition, which uses multiplication factors for advanced biofuels and renewable5. RENEWABLE ENERGY

electricity, 7 the share of renewables in transport reached 9.2% in 2019. Renewables intransport consisted mainly of biofuels, and has increased in recent years, with a growing
contribution from bioethanol (Figure 5.8).
Figure 5.8 Renewable energy in transport in France, 2004-19
4

Mtoe

3.5
3
2.5
2
1.5
1
0.5
0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%

Electricity in rail
Electricity in road
Electricity in other
Biodiesel
Biogasoline
Renewable share(right axis)
IEA. All rights reserved.

Renewable energy in transport is provided mainly by biodiesel, with an increasing
contribution of biogasoline in recent years
Notes: Mtoe = million tonnes of oil equivalent. Shares of renewables are computed using the Eurostat definition for
consistency with EU and national targets.
Sources: EC (2021), Energy from Renewable Sources (database),https://ec.europa.eu/eurostat/web/energy/data/shares.

Support schemes and policies
In transport, France aims to achieve a share of 10% renewables by 2020 and 15% by2030, in line with and above EU targets. The blending of diesel/petrol with biofuels is
encouraged through the exemption or reduction of the incentive tax on the incorporationof biofuels (TIRIB). The TIRIB acts as a penalty for non-blending and is proportional to thequantity of biofuels incorporated. The tax exemption has recently been adjusted to exclude
high ILUC (indirect land-use change) feedstock (palm oil and soy). France met its 2020
target for first-generation biofuels, but biofuels from second-generation sources are still at
a very low level of market penetration. The government is encouraging second-generation
blending targets for advanced biofuels in gasoline and diesel/kerosene of 3.8% and 2.8%
in 2028, respectively.

RED II uses a multiplier of four for renewable electricity, directly used in electric vehicles, which is a reflection of thehigher efficiency of electric vehicles over internal combustion engines and aids their contribution in meeting therenewable transport targets. Multipliers apply to other renewables such as waste-based biofuels, like used cooking oil(which is double-counted).

7

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By international comparison, France ranks fifth among IEA countries for the share of
renewables in the transport sector consumption, after Sweden, Norway, Finland andAustria (Figure 5.9).

Figure 5.9 Renewable energy in transport in IEA countries, 201925%
Renewable electricity

20%

Biofuels

15%
10%
5%
0%

IEA. All rights reserved.

Among IEA countries, France has the fifth highest share of biofuels in transport.
Sources: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

In January 2020, the Ministry of the Ecological Transition launched a roadmap for thedevelopment of sustainable aviation fuels in the French air transport sector. The roadmap
builds on the “Green Growth Engagement” initiative launched in 2017 by the government
alongside Air France, Airbus, Safran, Total and Suez Environnement, and is linked to therecovery funding provided to the airline industry. The roadmap is based on the substitutionof fossil fuels by sustainable aviation fuels of 2% by 2025, 5% by 2030 and a massive
target of 50% by 2050.

Impact of COVID-19 on renewables
Electricity production from renewable energy sources maintained high shares during
lockdown measures during the COVID-19 pandemic. However, the COVID-19 pandemic
and related measures exposed projects under development because of delays on
worksites, limitations of the supply of components, especially when coming from outside
the EU, and increases in the cost of financing.

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

To tackle these issues, the French government extended the validity of administrative
authorisations and staggered the schedule of tenders. Additional time was granted for thecommissioning of renewable projects for which the completion was initially due after 12
March 2020, a support scheme granted through a complete application for a feed-in tariffor by winning a tender process before or during the period between 12 March 2020 and
23 June 2020. Only projects with nominal power less than 200 MW were considered forthis extension, due to the importance for security of supply of bigger projects. The COVID19 crisis has hit the biofuel industry, as the halt in transport activity led to a fall in diesel
and petrol consumption. The government has not explicitly included renewable energy in
its Recovery Plan and is not providing an additional budget to make up for delays or speed
up deployment.

Like in other countries, France’s ambitious energy transition plans will result in a strong
increase in the demand for critical minerals. Over the next decade, the number of electriccars in France is expected to increase almost twenty-fold, solar energy installations up to
fivefold and wind capacity will see an almost threefold increase. France is a producer of 5
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Critical minerals in France

5. RENEWABLE ENERGY

out of 30 minerals deemed by the European Union as critical 8 (bauxite, hafnium, indium,silicon metal and tantalum) 9 and also has a nickel and cobalt refining plant, and a platinoid
production from recycling. France is one of the four countries outside of the People’s
Republic of China that have rare earth elements processing capacity.
According to the 2019 Annual Report of the French Geological Survey, 10 France hassignificant resources of critical minerals such as tungsten, antimony, gold, lead, zinc,
germanium, copper, lithium and molybdenum, but none of them are mined at substantial
scale yet. Were these resources developed, France could become self-sufficient forlithium, with a potential production of more than 200 000 tonnes in total. However, theconstruction of new mines in France would require an overhaul of the Code for Mines,
which is included in the Climate Resilience Law of 2021.
The car manufacturing industry will likely remain the largest consumer of critical minerals
in France, with an envisaged annual production of more than one million electric vehicles
as of 2024. France has the potential to become a substantial producer of crystalline siliconsolar panels, using its considerable silicon production capacity. Over the next few years,
domestic demand for solar panels will rise to 25 000 panels per day, which could partly be
produced in France. To put this into context: the planned expansion of solar PV with
20 GW of capacity will require up to 4 000 tonnes of neodymium and over 500 tonnes ofrare dysprosium in addition to tens of thousands of tonnes of copper and aluminium, which
France is well placed to produce given its largely decarbonised electricity.
France started assessing its needs and potential for critical minerals already in 2015 with
the Energy Transition for Green Growth Act. The act called for detailed planning of theneeds for natural resources and for decoupling GDP growth from the consumption ofthese. This was reinforced later that year in the Resources Plan for France, 11 which called
specifically to “improve knowledge of metal flows and their evolution in relation to futureenergy technologies, in order to identify critical metals and enable French companies toanticipate future tensions on their supplies”. The Roadmap for the Circular Economy in
France, adopted in April 2018,12 obliged the MTE to deliver detailed plans for criticalminerals based on the plans of the Committee of Strategic Metals, focused on stablesupply and advanced recycling. Based on the Energy Transition for Green Growth Act andthis roadmap, in 2019, the MTE initiated a three-year project to produce detailed reports
in each of four technology areas of greatest energy interest for France: 1) PV panels;2) electricity grids and stationary storage; 3) low-carbon mobility; and 4) wind power. For
each of these four technologies, the reports aim to provide policy makers with knowledge
on technology choices and to identify actions and levers needed to advance French
potential and reduce the risk of mineral supplies for the clean energy transition. All four

https://ec.europa.eu/docsroom/documents/42882.
In the case of hafnium, France is the biggest global producer, with 49% of world supply (84% of the EU demand).
For indium, France supplies 4% of global needs (28% of demand in the EU).
10
www.brgm.fr/en/news/annual-report/brgm-2019-annual-report-constant-capacity-adaptation.
11
www.ecologie.gouv.fr/sites/default/files/FREC%20%20Plan%20Ressources%20pour%20la%20France%202018.pdf.
12www.ecologie.gouv.fr/sites/default/files/Feuille-de-route-Economie-circulaire-50-mesures-pour-economie-100circulaire.pdf.
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9

reports are supposed to be finalised by the end of 2021, and will then constitute the basis
for developing a comprehensive national programming plan for critical minerals.
Two of the announced reports are already completed – on PV panels and on electricity
grids and storage. 13 The report on PV acknowledges that production of panels in France
is facing challenges due to strong competition from China. The report calls forstrengthening the verification of sustainability criteria of the critical minerals used in PV
technologies globally, and proposes to accept only materials and products manufactured
with the highest environmental, social and governance standards on the French andEuropean markets.
The report on electricity grids and storage notes that France is not only dependent on
critical minerals to build and maintain its electricity networks, but Asian suppliers are also
to a large extent responsible for providing the equipment increasingly needed to build andmanage smart grids. After 2030, France will need additional technological solutions forgrid management to accommodate a large share of variable renewables and energy
storage systems – where there is limited domestic industry presence too. The report
proposes that the French electro-digital sector find new opportunities through imposed
ecodesign standards, echoing the recommendations of the PV report.
The report on grids and storage also puts a strong emphasis on the recycling industry,
especially of used batteries, relevant for the increasing number of electric cars expected
in France in the coming years. In this context, SNAM, the largest French recycling
company, with financial support from ADEME, launched the Phoenix project for therecycling and reuse of minerals, with an 80% minerals reuse/recycling ratio.
The French government should assess the opportunities and prospects for both the supply
and demand of critical minerals. Clear signals to industry, with appropriate financial andregulatory support, will be key to building the country’s capabilities and determining its rolein the global critical minerals market. Swift action and co-operation with other European
countries will be crucial. As was underlined in a recent IEA report on The Role of Critical
Minerals in Clean Energy Transitions (IEA, 2021c), there is a variety of roles governments
should assume to support strengthening adequacy of supply of critical minerals and theiruse for energy transformations, notably by creating conducive conditions for investments
in critical minerals supply chains. France’s ambitions to lead on clean energy
transformations hinge on the availability of critical minerals; a lack of proper policies may
undermine achieving those ambitions.

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

Assessment

www.mineralinfo.fr/actualites/plan-programmation-ressources-minerales-transition-bas-carbone-parution-deuxpremiers.
13

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France has ambitious and legally binding renewable energy targets for 2030, as steppingstones towards climate neutrality by 2050 under the SNBC pathway. The share of
renewable energy in gross final consumption in France was 17.2% in 2019 and 19.1%
in 2020, still lower than its mandatory target of 23% for 2020 under the EU Renewable
Energy Directive. In 2020, France was the EU country the furthest from reaching its target

5. RENEWABLE ENERGY

for 2020 (OECD, 2021). The government has set ambitious targets, already for 2023
and 2028 under the PPE. France is well behind its neighbours when it comes to renewabletargets and development. However, France can catch up in the coming decade, thanks to
on reforms under way and further efforts to be made, as set out in the recommendationsof this report.
Distance to the 2030 target has been increasing. Under the 2019 Energy and Climate Act,
France has set a target of 33% of renewables for 2030 (in consumption). The gap to the2020 target and the distance to the 2030 target (6 and 15.8 percentage points,
respectively) calls for a significantly stronger focus on implementation to accelerate thepace of renewables deployment over the next decade. France did not manage to achieve
the necessary doubling of the historic growth rates over the past decade. Renewableelectricity accounted in 2019 for 22% of total electricity, with a major contribution byhydropower. Wind and solar have increased since 2011, but at a slower pace than planned
and than developed in neighbouring countries.
This slow pace is due to a combination of administratively complex and overlapping
support schemes; lengthy permitting procedures; a lack of public acceptance for onshorewind; and stop-go policy for support schemes, notably solar PV and biogas. Authorisations
are a prerequisite for tenders. Tenders are awarded within a few months and projects must
be in place within 18-36 months depending on the technology. Delays can be longer incase of litigation. The government should consistently track tender progress against PPE
targets and make all efforts to facilitate renewable deployment. The government may also
consider reversing the order and deem every tender approved unless there are complaints
raised within a certain short time frame.
The government must ensure a greater achievement focus in delivering results in line with
its ambitious targets and increase the effectiveness of its renewable policies and theadequacy of financial and human resources dedicated to the sector.
France has ambitious solar PV targets under the PPE. As seen in other countries,
stop-and-go policies are harmful for the development of the sector. There was significant
undersubscription in rooftop PV auctions in 2018-20, for good part due to uncertainty on
future policy support. In 2021, France plans to enact unilateral decisions to cut solar PV
subsidies for ongoing projects. Such a de facto retroactive and unilateral policy increases
investment risks in France. While the objective of keeping the cost of the energy transitionat the lowest for taxpayers and electricity consumers is understandable, any retroactive
decisions can discourage investment across the entire sector by increasing the feeling of
uncertainty and negatively affecting the cost of financing, with the risk of making any new
investment in renewables more expensive.
Moreover, the shift from electricity tariff-based renewable support schemes to the financing
of renewables under the state budget may increase the policy risk even more. It will be
important that the state ensures the necessary financial support, in line with the important
step change needed to meet targets. Creating more certainty for investors needs to beprioritised.

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For each renewable sector, a number of important facilitating actions can be outlined.

Wind power
The government has carried out important work to support renewable electricity
deployment, with a clear calendar for tenders, enshrined in the trajectories defined in the
PPE up to 2028 and has simplified administrative procedures introduced in 2020 for
onshore wind under the Loi ASAP. The proposed Onshore Wind Charter would be an
excellent way to improve the regional co-ordination of targets and consultations as well as
enable the sharing of best practices in permitting and public consultation. The tracking of
permits by the regions, which is proposed under the charter, is an important milestone.
The government should itself track tenders and PPE targets more consistently, based on
the return from the regions.
Offshore wind would benefit from a more co-ordinated and coherent approach to permitting
and siting, which could be done as one-stop shop authorisations and consultations, using
existing maritime spatial planning tools (i.e. with all the sea users, non-governmentalorganisations, etc.). This scheme would facilitate the tender processes and ensure better
visibility for RTE and investors in the future.
Solar PV
The distributed solar PV sector is struggling, which could create negative spillover effects
on small and medium-sized enterprises active in the sector. The self-consumption scheme
entails a fairly high administrative burden. Recently, the government clarified that
self-consumption projects are exempt from the electricity tax, which is a welcome
development. France could consider fast-tracking grid connections for small solar PV
projects, like what Portugal did in April 2020. Incentives for distributed PV on buildings are
the most cost-effective when combined with building renovations and investments inenergy efficiency and other distributed energy resources, such as heat pumps, solar
thermal and electric vehicle charging infrastructure. The Recovery Plan includes anadditional EUR 6 bln for renovation with the MaPrimeRénov’ scheme and funding for local
authorities. However, there is no additional funding provided for renewable energy.
Combining incentives for renewables and energy efficiency in the built environment is avery important way to achieve the most efficient and resilient solutions while creating local
employment and fast economic recovery in the labour-intensive construction sector, which
is a driver for the entire economy.

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGYFrance is still facing large structural barriers in relation to permitting, due to a combinationof a lack of human resources to handle requests, uneven application of permitting rules
across regions and public acceptance issues translating into long judicial procedures.
Project promoters also report difficulties in identifying suitable new sites for project
development due to a mix of regulatory limitations to land availability (military radars forwind, agricultural land for ground-mounted PV) and public acceptance issues.
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The Energy Transition for Green Growth Act (2015) mandated all new buildings incommercial zones to be partially covered either by solar PV panels or vegetation on theroof. Municipalities should be supported in mapping the solar potential and project
development, in particular on commercial buildings, including parking lots. The Recovery
Plan does not provide for additional funding nor new policies, as projects are funded under
existing schemes. Without incentives and a radical simplification of the administrative
burden for siting and connections, planned and future investments in PV installations may
remain below targeted levels for a long time.

5. RENEWABLE ENERGYFrance is not yet facing significant system integration issues thanks to its strong grid
capacity and the still low share of variable renewables. But integration issues may appear
in the coming decade, as total renewable energy capacity exceeds 50 GW and will
necessitate significant grid investments. These grid investments need to be designed now
so that they can be launched by 2025. The exact investment needs will, however, also
depend on the timetable and geographical localisation of nuclear closures.
RTE has recently published its reference Ten-Year Network Development Plan up to 2035,
in line with ENTSO-Es European development plan. The plan envisages not only grid
adaptations, but also a push in grid optimisation through the generalisation of real-time
use of flexibility from renewables (mainly wind farms). In this decade, these changes are
considered to be enough to keep the need for new grids in France lower than, for example,
Germany today or France in the 1980s, while still attaining ambitious targets forrenewables. Beyond 2030, however, grid expansion, reinforcement and restructuring
would be needed to increase the share of renewables in the power mix. In addition to gridinvestments, system integration will require that time-of-use tariffs, smart charging, andbatteries and demand-side response are activated to their full potential.
Heating and cooling
Renewable heat reached 22% of total heat consumed in France in 2019, of which solid
biomass represented by far the largest share, followed by ambient heat and small additionsof solar thermal and geothermal. Renewable heat developed at a lower pace than planned(the objective for 2020 was 33%). Reasons are numerous and include: lack of information,
low internalisation of the carbon price in competing fossil fuels, necessity to invest inenergy efficiency/building envelope, split incentives and high upfront costs.
The target for renewable heat in 2030 set in the PPE implies a growth rate that is 50%
faster than today, to be delivered mainly through biomass and heat pumps, and to a lesser
extent by deep geothermal and solar thermal. Overall, renewable heat should increase by
40-60% by 2028 (compared to 2016), and renewable heat and cold and recovery heat by
50-100%. Renewable heat benefited from support schemes (ADEME heat funds) and fromfunding from the Recovery Plan.
However, there is ample scope for making progress in geothermal and solar thermal heatdevelopment. Geothermal targets under the PPE remain below their potential in France,
which could be significant if the state supported the mapping and derisking of the cost of
exploration. The government should also review the situation of renewable heat use inco-generation, which is efficient and useful for multi-apartment buildings to assess theimpact of the end of the support scheme in 2020.
Transport

France is a leading biofuels market and has a large biodiesel and bioethanol industry(9 000 jobs in the bioethanol industry alone). However, the contribution of first-generation
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According to IEA data, renewables in transport accounted for 7% of France’s transportdemand in 2019 (including double counting of electric vehicles and advanced biofuels);
95% of the demand was accounted for by biofuels blended with road transportation fuels
and 5% by renewable electricity. As described in Chapters 3 and 4, the Law on Mobility is
being implemented with a strong focus on mobility, behaviour change, active mobility andmodal shift. Biofuels are only a small component of the French clean mobility strategy.

biofuels (food and feed crop-based biofuels) to the renewable objectives will be capped at
7% of final consumption of energy in road and rail. The development of second-generation
biofuels has not yet started at scale. The SNBC foresees that the bulk of scarce bioenergy
resources should be consumed in those transport sectors where electrification will bedifficult, in particular aviation, maritime and some heavy-duty transport. France should thus
progressively channel (advanced) biofuels towards these sectors.
Sustainable aviation fuel has a role to play in the decarbonisation of air travel, and meetingthe aviation industry’s own long-term goal of reducing CO2 emissions by 50% (versus 2005
levels) by 2050. France has made use of the recovery from the COVID-19 crisis andopened the door to a scale-up of aviation biofuels demand through widespread inclusionof sustainable aviation fuel provisions in bail-out packages. Support for sustainableaviation fuel helps France in the delivery of its roadmap to develop a national sustainableaviation fuel industry. Advanced technologies for reuse, substitution and recycling of
critical minerals could also be supported by the French government, especially given
already existing significant industry and scientific potential in that regard.
The following policy frameworks could be considered: financial derisking measures forrefinery project investments (e.g. grants, loan guarantees); measures to provide
guaranteed sustainable aviation fuel offtake (e.g. mandates, targets and public
procurement); and other mechanisms that close the cost gap between sustainable aviation
fuels and fossil jet fuel (e.g. carbon pricing).
Measures to accelerate the availability of E85 ethanol blends would also serve to lower
CO2 emissions from transport while supporting French industry. Support could come in theform of programmes to extend the supply of the blend, which today is only available inone-fifth of service stations, or fostering the adoption of conversion kits to facilitate petrol
vehicles to use E85. Polices to boost the market prospects for ED95 (95% ethanol) fuelfor heavy-duty road fright, buses and coaches could also be assessed.

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

Renewable gas
As regards renewable gas, the use of biogas for electricity generation has steadily
increased over the past years. Since 2016, biogas is also increasingly upgraded into
biomethane and injected into the gas network. France already has a support framework
for biomethane production and injection into gas network infrastructure. This can be built
upon to meet, and potentially surpass, the target for 10% renewable gas consumption in 2030.
There is a strong need for policies to ensure industry growth, given the significantly higher
costs than for natural gas. These could take the form of measures to extend the durationof the existing feed-in tariff mechanism, enhanced support frameworks for gas network
injection or measures to stimulate consumption (e.g. in heavy-duty vehicles or captive
fleets). Alongside investment in renewable hydrogen, biomethane support also helps toensure a future role for existing natural gas infrastructure in a low-carbon energy transition.

In the past years, regional and local authorities have been required to develop integrated
energy plans covering, inter alia, renewable energy deployment: the SRADDET,
introduced by the NOTRe Law in 2016, and the PCAET, as part of the 2015 Energy
Transition for Green Growth Act. The prefect defines the capacity for the planning of thetransmission and distribution system operators of regional renewable energy network
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Regional and national targets

5. RENEWABLE ENERGY

connection plans (S3RenRs). Despite these regional competences, the national SNBC
and the PPE do not include a concerted territorial component. While both planning levels
should inform each other, there is no mechanism to reconcile inconsistencies between
national and regional targets and plans.
The 2021 Climate Resilience Law will promote the regionalisation of the next PPE in 2024.
While this can be useful for the co-ordination of national and regional efforts, it may create
barriers and delays to renewable deployment, in regions that are opposing renewables.
Regions insist that they have a better view of their renewable energy potential and should
rather inform national planning bottom-up – which may go in the direction of higher
ambition. For instance, the objectives for marine renewables under the PPE 2018 wererevised upwards, thanks to a common approach reached with regions when defining goals,
based on the state competence for maritime planning. Better dialogue and co-ordination
are critical. A reconciliation mechanism could ensure that the national ambitions areunderpinned by commensurate ambition and ownership at regional/local levels, closer tothe citizens and the realities of territories. Coherence is also important.

Recommendations
The government of France should: Increase its implementation focus and policy certainty to ensure investor confidence
and accelerate affordable private investment at the pace necessary to meet the 2020
and 2030 target for renewables and sectorial as well as interim sub-targets under thetwo five-year energy investment plans. Support the tracking of tender results against
targets and increase financial and human resources commensurate to the distance tothe target.
 Increase land access and site eligibility for wind and solar electricity by removing
regulatory barriers, where possible. Further strengthen the spatial (maritime) planning
exercise aiming to identify suitable sites for offshore wind projects in a long-term
perspective (2050 horizon) and consider greater one-stop shop procedures.
 Ensure that national level trajectories for renewables (PPE) translate into consistentregional targets (regional plans for spatial planning, sustainable development andequality) based on closer co-ordination and dialogue with regions, as provided for in
the Climate and Resilience Law.
 Introduce minimum requirements for on-building renewables as part of new buildings
and deep renovations policies to accelerate the deployment of decentralised
renewables.

 Seize the opportunity of economic recovery from the COVID-19 pandemic by directing
funding to support various renewables, notably renewable heat, distributed
photovoltaics (i.e. under renovation) and advanced biofuels, such as sustainableaviation fuels and maritime low-carbon fuels.

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 Ensure a swifter and more harmonised application of permitting rules for renewableelectricity projects across decentralised state administrative services, underpinned byincreased human resources, strong monitoring and an accountability framework
against regional targets.

References
EC (European Commission) (2021), Energy from Renewable Sources (database),https://ec.europa.eu/eurostat/web/energy/data/shares.
IEA (International Energy Agency) (2021a), World energy balances, IEA World Energy
Statistics and Balances (database), www.iea.org/statistics.
IEA (2021b), Conditions and Requirements for the Technical Feasibility of a Power Systemwith a High Share of Renewables in France Towards 2050, www.iea.org/reports/conditionsand-requirements-for-the-technical-feasibility-of-a-power-system-with-a-high-share-ofrenewables-in-france-towards-2050.
IEA (2021c), The Role of Critical Minerals in Clean Energy Transitions, The Role of Critical
Minerals in Clean Energy Transitions – Analysis – IEA.
MTE (Ministry of the Ecological Transition) (2021a), Renewable energies in France in2020 – Monitoring of Directive 2009/28/EC relating to the promotion of the use ofrenewable energies, www.statistiques.developpement-durable.gouv.fr/les-energiesrenouvelables-en-france-en-2020-suivi-de-la-directive-200928ce-relative-la-promotion.
MTE (2021b), Injection de biométhane – Tableau de bord, (GRDF, GRTgaz, R-GDS,
PEGNN and Teréga, 2020), www.statistiques.developpement-durable.gouv.fr/tableau-debord-biomethane-injecte-dans-les-reseaux-de-gaz-premier-trimestre-2021
MTE (2020a), National Energy and Climate Plan (NECP),
https://ec.europa.eu/energy/sites/default/files/documents/fr_final_necp_main_en.pdf.
MTE (2020b), National Low-Carbon Strategy, www.ecologie.gouv.fr/sites/default/files/202003-25_MTES_SNBC2.pdf.
MTE (2020c), PPE (with a range outlining the two scenarios),
www.ecologie.gouv.fr/sites/default/files/20200422 Programmation pluriannuelle del%27énergie.pdf

ENERGY SYSTEM TRANSFORMATION

5. RENEWABLE ENERGY

MTE (2019), Second Annual Report of the Committee on Public Service Charges forElectricity,www.ecologie.gouv.fr/sites/default/files/Rapport%20annuel%20du%20CGCSPE%20n%C2%B02.pdf.
OECD (2021), OECD Economic Surveys: France 2021, forthcoming.

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RTE (2021), Futurs Energétiques 2050, https://assets.rte-france.com/prod/public/202110/Futurs-Energetiques-2050-principaux-resultats_0.pdf

Key data (2019)
Total public RD&D expenditure: EUR 1 264 million
Share of GDP: 0.051% of GDP (IEA average: 0.035%)*
Share of energy in total RD&D: 9.2% (IEA average: 4.9%)* Average of 25 IEA countries as data for Greece, Italy, Luxembourg, Mexico and Turkey are not available for 2019.

Overview
France has a dynamic energy-related research, development and demonstration (RD&D)
landscape, which is supported by active collaboration, strong integration and stable funding.
France’s National Strategy for Energy Research (Stratégie nationale de rechercheénergétique, SNRE) is based on the Energy Transition Law of 2015. It has been the mainreference for stakeholders in research and innovation since its adoption in 2016. With theambitious targets set forth in the 2020 National Low-Carbon Strategy (Stratégie Nationale
Bas-Carbone, SNBC) and the multiannual energy plan (la programmation pluriannuelle del’énergie, PPE), the 2016 SNRE needs to be updated. This is an opportunity to get a broadsocietal vision on France’s energy future and set the direction for France’s energy RD&D
in the coming years. Such a refreshed strategy can cater for critical technology needs insupport of France’s climate neutrality, such as hydrogen, small modular reactors or lowcarbon fuels. Today, the SNBC does not rely on technology pathways.

ENERGY SYSTEM TRANSFORMATION

6. Energy research, development
and innovation

The IEA sees several key opportunities for France to focus on clean energy innovation in
the context of the preparation of the SNBC for 2024 and setting future funding
programmes, in light of the sustainable recovery of the French economy following the
COVID-19 pandemic and future investment under the Investment 2030 Plan.

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Over the past decade, public RD&D funding has remained relatively flat, around
EUR 1.2 billion (bln) in public funding for energy RD&D, corresponding to roughly 9% of
French public spending for research and development (R&D) and 0.05% of national grossdomestic product (GDP). Energy R&D spending is, to a large extent, dedicated to nuclear
energy (mainly fission), energy efficiency and cross-cutting research areas. On an energy
RD&D budget per GDP comparison, France ranks sixth after Norway, Finland, Japan,
Switzerland and the Czech Republic. The flat funding levels also mean that France was
not able to deliver on its Mission Innovation pledge, which required doubling the clean
energy innovation spending by 2020 compared to 2015.

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATIONIEA framework for energy innovation policy
Technology innovation processes are complex and decision makers must pay attention toa variety of elements that characterise successful energy innovation systems (IEA, 2020).
The IEA groups these elements into four core functions: A) resource push; B) knowledge
management; C) market pull; and D) socio-political support (Figure 6.1).
Figure 6.1 The IEA’s four functions of a successful innovation ecosystem for energy

IEA. All rights reserved.

This chapter applies the IEA innovation framework to the French case to assess thecurrent state of play and derive concrete recommendations to enhance clean energy
innovation. It includes: A) recent trends in funding for energy R&D by public and private
actors; B) an overview of key knowledge institutions and management; C) illustrations of106

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Successful innovation systems involve a wide range of actors and a wide variety offunctions, each of which can be enhanced by public policy. Such a system will need tohave action under each of these four headings to successfully translate research into
technological change. A sustained flow of R&D funding, a skilled workforce(e.g. researchers and engineers) and research infrastructure (laboratories, research
institutes and universities) are required: these resources can come from private, public oreven charitable sources, and can be directed to specific problems or basic research(resource push). Knowledge should be exchanged easily between researchers, academia,
companies, policy makers and international partners (knowledge management). The
expected market value of the new product or service must be high enough to make the
R&D risks worthwhile, and this is often a function of market rules and incentives
established by legislation. If the market incentives are high, then much of the risk ofdeveloping a new idea can be borne by the private sector (market pull). And there needs
to be broad socio-political support for the new product or service, despite potential
opposition from those whose interests might be threatened (socio-political support).

public support for business innovation and market creation; and D) references tomonitoring frameworks to track progress of innovation.

Key energy innovation priorities
Based on the 2015 Energy Transition for Green Growth Act, France presented its SNREin December 2016, which is the main reference for stakeholders in research andinnovation. In the preparation of the SNRE, the government consulted across ministries
and received opinions from the Association of Regions of France, the National Energy
Transition Council and the Higher Energy Council.
Specifically, the SNRE sets four main objectives to shape the future of France’s R&D:
1. Focus on the transition of the energy system by stimulating multidisciplinary R&D,
involving environmental science, digitalisation, and economic and social science,
consumer involvement and decentralisation, as well as the analysis of several options offlexibility of energy supply and demand management.
2. Develop R&D in tandem with regions and industry, in particular small and mediumsized enterprises (SMEs), to promptly transfer technologies from R&D laboratories to themarket.
3. Develop the necessary skills and knowledge by strengthening international
collaboration, the creation of global networks of researchers, expansion of modelling andforecasting capacities, the deployment of training courses for jobs associated with theenergy transition, and the involvement of civil society.
4. Create a high-performing governance through the monitoring committee, which isconvened every year to review the SNRE with ministries responsible for research,innovation and energy; the National Research Agency; the Agency for EcologicalTransition (ADEME); and the National Alliance for the Coordination of Energy Research.

ENERGY SYSTEM TRANSFORMATION

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

By design, the SNRE aspires to cover all four core pillars of successful innovation systems.
The strategy aims to provide resources to innovation actors, help them develop new
knowledge and bring new products from lab to market, and foster socio-political support
by promoting transparent governance and collaborative projects.

Main actors shaping France’s energy innovation

A diverse set of entities are involved in France’s energy research and innovation
ecosystem (Figure 6.2). With the right co-ordination mechanisms in place, this allows forcomprehensive coverage of the whole energy spectrum and strategic allocation of
resources across sectors (e.g. power, transport, industry and buildings) and stages oftechnology development (e.g. basic and applied research, demonstration, market uptake).
For the most part, decision making for innovation priorities is centrally led by the107

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Energy RD&D is a joint effort of the Ministry of the Ecological Transition and the Ministryof Higher Education, Research and Innovation. The SNRE is the fruit of their strong
collaboration. To support the co-ordination and implementation of the SNRE across thegovernment, a permanent secretariat and a monitoring committee are in place. The
National Alliance for the Coordination of Energy Research and ADEME participate in thework of the committees, but industry and academia do not directly.

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

government, with a consultative role and some responsibilities in implementation forregions and local authorities, such as to set up technology innovation clusters.
Figure 6.2 Energy innovation ecosystem in France

The political, general objectives and the budget for research are defined by the ministries
and the Strategic Research Council under the prime minister. Thematic priorities andbudget allocation are programmed by the ministries (Departments for Research, Energy
and Economy) and the funding agencies. These include mainly the National Research
Agency under the lead of the Ministry of Higher Education, Research and Innovation and
ADEME under the Ministry of the Ecological Transition, as well as Bpifrance, France’s
public investment bank. 1
ADEME is active in the implementation of public policy and provides expertise andadvisory services to businesses, local authorities and communities, government bodies,and the public at large. As part of this work, the agency helps finance projects, fromresearch to implementation, in its areas of action, such as the Investments for the Future
Programmes (PIA).

1
Bpifrance is a joint venture of two public entities: the Caisse des Dépôts et consignations and EPIC BPI-Groupe,
formerly EPIC OSEO.

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The funding agencies work with several alliances and research organisations. For theenergy sector, the National Alliance for the Coordination of Energy Research is the key
alliance of research organisations and participates in the implementation of the national
strategy and is active in the European Energy Research Alliance.

A. Funding for energy R&D and innovation
The research programming bill was initiated in early 2019 by the President of the Republic
and the Prime Minister and supported by the Minister of Higher Education, Research andInnovation. The law plans for EUR 25 bln in additional investments to be injected forresearch between 2021 and 2030, which will increase the current annual budget from
EUR 15 bln to EUR 20 bln per year in 2030.
Out of this total, the energy sector has a funding stream of around 9%. In 2019, France
allocated EUR 1.2 bln to energy-related RD&D (Figure 6.3). Energy RD&D funding peakedin 2011 at EUR 1.36 bln, decreased thereafter and rebounded in 2019 to EUR 1.26 bln.
Nuclear consistently made up half of the total energy RD&D funding and its share has
increased in recent years, reaching 59% in 2019 (EUR 748 million). Three-quarters of thenuclear budget was allocated to nuclear fission technology and one-quarter(EUR 181 million) to research of nuclear fusion (ITER project). The second-highest budget
allocation is energy efficiency (13% of energy-related RD&D in 2019), of which 70% went
to road vehicles, with a significant share for electric vehicles (EVs), batteries andinfrastructure, followed by buildings (10%) and industry (9%). RD&D in renewables
accounted for 13% of the total energy RD&D budget in 2019, followed by other crosscutting technologies (8%), other power and storage technologies (4%), hydrogen and fuelcells (3%), as well as a very small share in fossil fuels (2%).

EUR million (2020 prices)

Figure 6.3 Energy-related public RD&D budget by sector in France, 2009-19
1 400

Other

1 200

Fossil fuels

1 000

Hydrogen

800

Other power andstorage

600

Renewables

400

Energyefficiency

200
0

ENERGY SYSTEM TRANSFORMATION

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

Nuclear
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

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Source: IEA (2021a), Energy Technology RD&D Budgets 2020: Overview, www.iea.org/statistics.

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With an energy-related RD&D budget per GDP of 0.05%, France ranks sixth by IEA
comparison, after Norway, Finland, Japan, Switzerland and the Czech Republic(Figure 6.4).

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

Share of GDP

Figure 6.4 Energy-related public RD&D spending per GDP in IEA countries, 2019*
0.18%
0.16%
0.14%
0.12%
0.10%
0.08%
0.06%
0.04%
0.02%
0.00%

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* 2019 data are not available for Greece, Italy, Luxembourg, Mexico or Turkey.
IEA (2021a), Energy Technology RD&D Budgets 2020: Overview, www.iea.org/statistics.

Under Mission Innovation, France pledged to double its public funding for clean energy
innovation by 2020 from its baseline in 2015. Clean energy includes energy efficiency;
carbon capture, utilisation and storage; renewable energy sources; hydrogen and fuelcells; power and storage technologies; and cross-cutting technologies, excluding nuclear.
Funding remained stable. In 2019, France spent around EUR 497 million, less than thebaseline.
Table 6.1 Mission Innovation – Spending overview
Funding (EUR million)

Baseline

First-year
RD&D
spending

Second-year
RD&D
spending

Third-year
RD&D
spending

Fourth-year
RD&D
spending

Year

2015

2016

2017

2018

2019

Total RD&D spending

502

488

471

516

497

Source: Mission Innovation (2021), France, http://mission-innovation.net/our-members/france/

The private sector also plays an important role in financing energy R&D activities in France(Figure 6.5). A small number of large multinationals – including in the utilities and power
sector, automotive, and oil and gas companies – account for the bulk of the country’s
corporate energy R&D spending, which was estimated at about EUR 4.5 bln in 2020 basedon the annual reports of globally listed firms headquartered in France and additionalsources focusing on France’s nuclear industry.

Created in 2019 by the French government, the Next40 label helps support and promote
40 young start-ups in France to become technology leaders and receive internationalrecognition.
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In 2020, car manufacturers reported lower spending on R&D, wiping out years of strong
growth, potentially due to lower revenues generated during the COVID-19 pandemic. Thisdrop, however, warrants further analysis in 2021 and beyond as French companies
accelerate innovation in EVs and associated technologies. R&D spending by oil and gas
companies has been steadily decreasing in the last five years, and remained stable in the
power sector. As a result of a decreasing number of nuclear programmes, R&D spending
levels in this area remained lower in 2020 than in 2015.

France has temporary exemption arrangements for innovative start-ups and new
businesses. The main tool to support corporate R&D spending is through a research tax
credit (CIR). The CIR provides for a tax credit for 30% of eligible R&D expenditure (upto EUR 100 million per year) and 20% of eligible cost for innovation expenditure (up to
EUR 400 000 per year). In 2017, 26 100 companies declared EUR 24.1 bln total
expenditure on R&D, with an eligible tax credit of EUR 6.6 bln.
The Court of Audit evaluated the results of the tax credit and found that if fiscal incentives(e.g. tax relief or direct cash injections) for R&D are maintained, stricter monitoring(spending, impact) is needed (Court of Audit, 2013).

USD (2019) billion

Figure

6.5

Energy-related R&D spending by globally
headquartered in France, by sector, 2015-20

5listedcompanies

Oil and gas

4
Nuclear3
Automotive2
10Electricity generation, supply and networks

2016

2017

2018

2019

2020

Notes: In the case of nuclear, small and medium-sized enterprises are also included alongside globally listedcompanies based on additional sectoral sources. Given the difficulty to separate R&D spending specific to nuclear
technologies from general power generation and the lack of granularity in R&D budgets reporting, there may bepartial overlap between the “nuclear” and “electricity generation, supply and networks” categories.

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6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

Sources: Estimates based on data extracted from Bloomberg for globally listed companies. Also see IEA (2021b),
World Energy Investment, www.iea.org/reports/world-energy-investment-2021. For nuclear, other estimates are
drawn from the Cartographie de la filière nucléaire française published in 2016 and 2020 by the Strategic Committee
for the Nuclear Sector.

B. Knowledge management

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France’s energy innovation landscape relies on more than 200 higher education
institutions, including 67 universities, 6 public research institutions and 12 governmentfunded research organisations. These institutions carry out much of France’s publicly led
R&D programmes and are overseen by central agencies mandated by the government
to implement high-level energy innovation priorities.

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

Although this goes beyond the scope of energy, there are about 110 000 active public
sector researchers in France, aggregating to about 40% of the country’s total pool ofresearchers. The remainder are in business enterprises (OECD, 2021a) 2.
France’s energy research community is present across the entire R&D value chain, andpublic sector actors are typically involved at least to some extent in all steps of technology
development, from basic and applied research to demonstration.

 Fundamental research is primarily performed by public laboratories under the National
Centre for Scientific Research (CNRS), including in research facilities located in institutionsof higher education such as universities, scientific and engineering schools, and “grandesécoles”, France’s elite academic institutions.

 Applied research and demonstration are carried out by public bodies, including theAlternative Energies and Atomic Energy Commission (CEA), the French Geological Survey
and IFP Énergies Nouvelles (IFPEN) and by the industry.

 Pre-commercial experimentation, product development and demonstration in someinstances are conducted by industrial companies, in partnership with public laboratories andpublic industrial and commercial establishments.

Although this goes beyond the scope of energy, French public R&D spending is distributed
as follows: about 25% for basic research, 40% for applied research and 35% forexperimental development (OECD, 2021b). As a share of total domestic R&D spending,France typically spends more on basic research than other innovating countries, including
Japan, Korea, Norway, the United Kingdom and the United States, but less on technology
development stages that are closer to market.
During its long history of developing new low-carbon energy technologies, France has
shifted focus over the decades. Until the 1990s, much of energy patenting by inventors
residing in France was in nuclear power technologies, reflecting the country’s national
priorities in this area. Targeted and sustained government support through publicly led
R&D programmes enabled building a first-class nuclear innovation system. As French
nuclear technologies, which largely focused on large-scale reactors and infrastructure,
gained in maturity and found markets for domestic deployment and exports such as in the
People’s Republic of China, and as new priorities and opportunities arose for technology
development, inventors progressively shifted towards non-nuclear technologies as well.
Since the 2000s, nuclear accounts for only a fraction of all French low-carbon energy
patenting. However, this may somewhat change looking forward if appetite for advanced
nuclear technologies such as small modular reactors increases in the country and ranks
among innovation priorities.

OECD data (2015) say 277 631 total researchers, of which 28 445 are in government and 79 622 in higher education
institutes, which combined equal 108 067. The bulk of the remainder is in business enterprise.
3
www.iea.org/commentaries/global-patent-applications-for-climate-change-mitigation-technologies-a-key-measureof-innovation-are-trending-down.
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In 2018, energy storage, renewables, electric mobility, and hydrogen and fuel cells
accounted for most of French low-carbon energy patenting. Patents in renewables, forexample, outnumbered those in nuclear tenfold. As in most regions, France saw a dip in
overall patenting in the 2010s 3 (Cárdenas Rodríguez, Hascic and Johnstone, 2019), but it
is notable that patenting in energy storage and hydrogen technologies – which are key

technology areas for global decarbonisation – continued to steadily increase over theperiod. Recent trends suggest France accounts for about 15% of European Union
patenting for climate change mitigation technologies in the power sector and about 20%
in transportation – about 5% of the world’s total.
Figure 6.6 Energy patenting trends in France (left) and contributions to global
patenting (right)
Share in regional and global patenting (2010-18)
30%

200

20%

100

10%

Buildings

Industry

Power

World

NuclearHydrogen and fuel cells
Electric mobility

EU-27

2010

World

2000

EU-27

Renewables
Energy storage
CCUS
Buildings

1990

World

1980

EU-27

0%
1970

World

0
1960

EU-27

Patent counts

French energy patenting (1960-2018)
300

Transport
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Notes: CCUS = carbon capture, utilisation and storage. Patents for climate change mitigation technologies relevantto the energy sector. Patents filed in at least two geographical areas (family 2) by inventors residing in France.
Source: IEA analysis based on OECD (2021c), Climate change mitigation, Patents – Technology Development(database), https://stats.oecd.org/Index.aspx?DataSetCode=PAT_DEV (accessed on 8 July 2021).

To strengthen the links and foster collaboration between public research institutes,
academia and industry actors, France has promoted the creation of regional high-tech andinnovation clusters. One such example is Saclay Plateau in the Île-de-France region, whichhosts the CNRS and the Alternative Energies and Atomic Energy Commission, manyleading scientific and engineering schools, a network of research labs (e.g. theÎle-de-France PV Institute set up in 2016), corporate R&D centres, and state-backed
incubators and accelerators for start-ups. Overall, the Saclay Plateau gathers over 10 000
researchers and 50 000 students, providing a large pool of skilled workforce and talented
graduates available for innovation activities.

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6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

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Regional clusters can serve as innovation platforms for collaborative projects between
academia, public and private actors, including start-ups. With the right incentives tocollaborate, they can help bridge the gap between labs and markets thanks to the proximity
between basic and applied research activities and product development in companies.
They also attract financial actors such as venture capital investors looking to fund start-up
projects burgeoning after graduate programmes or PhDs. Collaborative projects are
generally able to mobilise greater resources and contribute more effectively to global
innovation efforts. Overall, scientific and innovation clusters can play an important role inboosting France’s technology innovation for the energy transition, such as to develop newconcepts and technologies in areas including EVs; hydrogen; and carbon capture,utilisation and storage.

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATIONAt the international level, France is active in CERT, 22 IEA technology collaboration
programmes, Mission Innovation (MI), and EU Energy Technology Initiatives (batteries,
nuclear safety). France has actively participated in all the actions of the EU Strategic
Energy Technology Plan.
During the first phase of MI, France was a member of the MI steering committee and theBusiness and Investor Engagement Sub-Group and co-led with India the challenge“innovation in off-grid electricity access from renewables”. Since their inception, France
supported the innovation challenges on carbon capture, utilisation and storage andhydrogen. France supported the launch of the second phase of MI and has declared its
interest to contribute to the missions most relevant to French priorities for the energy
transition. France supports the Zero-Emissions Shipping Mission and participates in the
Hydrogen Initiative. France actively participates in two main initiatives of the Clean Energy
Ministerial – ISGAN (smart grids) and ZEV (zero emissions vehicles) – and recently joined
the NICE Future (Nuclear Innovation for Clean Energy Future) Initiative. France has co-led
a campaign on near-zero emissions buildings under the Global Alliance for Buildings andis a member of the Energy Efficiency Hub.
France supports the international exposure of its public research organisations; access toan international network of specialists; the possibility for researchers to collaborate,exchange and benchmark their work, stimulate the creation of new projects outside oftechnical collaboration programmes and access economic, technical and politicalinformation at the international level.

C. Support for innovation and market creation in
strategic technology areas
While public institutions carry out much of France’s R&D activities in the early stages oftechnology development, companies typically allocate the bulk of innovation budgets on
demonstrating new concepts and developing new and improving existing products. To
complement investments in traditional RD&D, France mobilises funding to support
business innovation and foster the creation of markets for emerging energy products andservices. This can help bridge possible gaps between innovators and consumers andtrigger feedback loops and learning from markets to the lab.

In 2010, the government launched the PIA implemented by ADEME, Bpifrance and the
Caisse des Dépôts. The programme includes equity investments, calls for demonstration
funding, SME interventions and collaborative industrial projects. It seeks to support public
and private actors – from idea to markets along the entire innovation value chain – todevelop new concepts and technologies in strategic areas that can contribute to medium-

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The French government has taken the lead in using public funding for pulling market
creation, notably by setting targets and providing funding. Measures have been focusedon public procurement of new or emerging energy technologies, notably EVs and hydrogen
applications; promoting performance or technology standards within the EU minimum
levels; and deployment targets or quotas for emerging technologies, notably in renewableenergy. Such instruments help create markets for new technologies, which provides
incentives for innovators to innovate and trigger feedback loops from consumers toinnovators.

term structural economic growth and job creation in France. Four PIA tranches of funding
and support mechanisms were set up successively in 2010, 2014, 2017 and 2020.
From 2010 to 2017, ADEME operated several programmes under the economy-wide PIA
to fund innovations for the energy transition and environmental protection. Over the period,
the PIA focused on technology areas including renewables, storage, smart electricity
networks, energy efficiency in buildings, industry and agriculture, bio-based chemistry,
circular economy and waste, as well as transport and mobility. This activity was comprisedof 745 projects for a total grant amount of EUR 2.5 million on total project budgets
aggregating to EUR 7.2 bln. Since 2018, ADEME has implemented several actions of the
PIA-3 related to the ecological and energy transition for a total amount of EUR 1 bln:
EUR 400 million in equity, EUR 300 million in state aid for demonstration projects,
EUR 150 million in calls for participation for SMEs and EUR 150 million for sustainablemobility.
Supported by the French Recovery Plan, the PIA-4 (2021-25) will mobilise an additional
EUR 11 bln for innovation, bringing total PIA-4 budgets to EUR 20 bln. Those investments
will be allocated to the development of innovative and green technologies (EUR 3.4 bln);
economic resilience and sovereignty (EUR 2.6 bln); support to higher education, researchand innovation ecosystems (EUR 2.55 bln); and support for innovative companies,
including SMEs and start-ups (EUR 1.95 bln).
As part of PIA-4, France plans to accelerate strategies for additional areas in need ofinnovation, such as technologies to support industry decarbonisation, bio-sourced
products and biofuels, the circular economy, and energy systems. The first strategy is for
low-carbon hydrogen, with a budget of EUR 7 bln, including EUR 2 bln in 2021-22 focusedon electrolysis, hydrogen heavy vehicles and research in systems integration. Given thestep change in funding, the government will need to ensure that regulatory frameworks
and project pipelines are in place to leverage private funding (see Box 6.1).

ENERGY SYSTEM TRANSFORMATION

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATIONThe PIA funding also allows Bpifrance to finance companies in the field of sustainable
development and the energy transition, regardless of their size, from start-ups to SMEs or
mid-caps, with financial solutions both during the feasibility study stage of innovation
projects and during their implementation and launch in France or abroad. The public bankalso invests in companies’ equity with high growth potential via innovation capital or seedcapital, with the aim to create a ripple effect with regards to private funding.

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Venture capital investments in French early-stage start-ups recovered well after the
economic crisis. In 2019, venture capital deals aggregated to about USD 160 million,
which were similar to levels in 2010 (Figure 6.7). As a result of the COVID-19 pandemic,
lower investments were recorded in 2020. Strong growth in energy storage, hydrogen andfuel cells and relatively stable investments in energy efficiency partly compensated forconsiderable drops in renewables. Estimates for 2021 suggest that France’s start-up
ecosystem might be recovering. Hype’s successful raising of EUR 80 million in January
2021 to develop hydrogen refuelling infrastructure and fuel cell-powered taxi fleets in Paris
is a positive sign, but a few years may be needed to catch up with pre-COVID expectations.

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

USD (2019) million

Figure 6.7 Early-stage venture capital investments in clean energy start-ups inFrance, by sector, 2010-20
200

40

150

30

Other low-carbon
Transport
Conventional fuels

100

20

Renewables

50

10

Energy storage, hydrogen,fuel cells
Energy efficiency

02010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0Deal number (right)
IEA. All rights reserved.

Note: Early-stage investments include seed, series A and B financing rounds.
Source: IEA analysis based on Cleantech Group i3 database. See also IEA (2021b), World Energy Investment,
www.iea.org/reports/world-energy-investment-2021.

Box 6.1 France’s national hydrogen strategy
For France, hydrogen represents a strategic opportunity to make a successful transition toa “zero-carbon” economy, particularly in the industrial and heavy mobility sector. In
September 2020, the government launched the national hydrogen strategy, with a view todecarbonise hard-to-abate sectors, create a domestic hydrogen value chain and jobs, andlower the country’s import dependence.
As the main technology for the development of renewable and low-carbon hydrogen, thegovernment places a strong focus on electrolysis. This implies giving priority to the direct
use of hydrogen over its transformation into a synthetic gas that can be injected into a natural
gas network.
The government made a financial commitment to accelerate the deployment of hydrogenproduction and use by electrolysis with EUR 7 billion of public support until 2030. The
acceleration strategy is based on the development of the production value chain to produce
6.5 gigawatts of decarbonised hydrogen by 2030. This commitment includes funding of EUR
2 billion under the French Recovery Plan.

R&D and innovation actions are financed under the pluriannual research programme.
Demonstration is supported under the Investment for the Future programme with a key role

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With this financial support, the government aims to kick-start investment through support
schemes to the large-scale demonstration and deployment of electrolysers in industry. The
funding also supports the demonstration of shared hydrogen refuelling infrastructure (local
hydrogen hubs) and of heavy-duty transport hydrogen applications in the transport sector
as well as innovation and research and development (R&D), large-scale demonstrators anddevelopment of key components for hydrogen usages. To implement the ambitioushydrogen strategy, an action plan towards 2023 is in place.

for the Agency for Ecological Transition (ADEME) to develop several hydrogendemonstration sites, including under the EU Important Projects of Common European
Interest. With regard to deployment, ADEME is organising calls for the local hydrogen hubs,
the Energy Regulatory Commission is supporting non-interconnected areas and thegovernment offers support mechanisms for clean hydrogen projects, including an exemption
from the biofuels tax.
The Ministry of the Ecological Transition set up a dedicated working group together withrepresentatives of French industry to prepare and discuss the regulatory framework forhydrogen.
In terms of international collaboration, the government is involved in the Clean Energy
Ministerial Hydrogen Initiative (H2I). French ports are joining EU and global initiatives toshare good practices for scaling up clean hydrogen production and demand in ports andcoastal industrial clusters, notably under the Global Ports Hydrogen Coalition and theEuropean Hydrogen Ports Network initiative.

D. Tracking progress of energy innovation
Research results are evaluated and supervised by the High Council for the Evaluation of
Research and Education (Hcéres). As an independent administrative authority, Hcéres is
responsible for evaluating all higher education and research structures and for validating
the procedures for evaluations conducted by other bodies. Hcéres provides
recommendations and accompanies, advises and supports the process of improving thequality of higher education and research in France.

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6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

Specific processes are put in place for every funding programme to assess and monitor theeffectiveness of the relevant expenditures, in particular for the PIA, for which both ex anteand ex post evaluations are performed, including of their compliance with the international
and EU regulations in terms of state aid. There is no separate funding review by the Ministryof the Ecological Transition or the funding agencies. As part of the PIA, the National
Research Agency monitors the research progress and structures and awards labels.
The national research strategy is evaluated every two years by the Parliamentary Officefor Evaluation of Scientific and Technological Options. It also evaluated the SNRE in 2017.
Out of the 15 recommendations, the office highlighted the need for the government toevaluate the SNRE, to communicate a clear vision for the French energy system, to define
national research priorities that boost international competitiveness, to increaseinternational collaboration on hydrogen to respect its financial commitments under MI(OPECST, 2017).

France’s National Energy Research Strategy, published in December 2016, covers well
the core components of successful energy innovation systems, from providing resources
for innovation to supporting new knowledge and market creation. Based on the Energy
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Assessment

6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

Transition Law of 2015, the SNRE is the main reference for stakeholders in research andinnovation in their efforts to support the transformation of the energy system.
The SNRE takes an energy system perspective and does not identify technology priorities.
It aims at creating linkages across research priorities; it does not set out a common vision
for France’s future energy system. The SNRE dates back to 2016 prior to the update of
the National Low-Carbon Strategy and the multiannual plan in 2020.
In the context of France’s pledge to climate neutrality by 2050, the IEA sees several key
opportunities for France to boost clean energy innovation in the context of the preparationof the next SNBC for 2024 and future funding programmes, and in the light of thesustainable recovery of the French economy following the COVID-19 pandemic.
First, with ambitious targets in the SNBC and PPE for climate neutrality by 2050, the SNRE
needs to be updated. The next SNRE should be based on an evaluation of the current
SNRE and France’s technology pathways, create a common vision for the future energy
system, set clear technology and innovation priorities and the direction for France’s energy
RD&D in the coming years. To design the next SNRE, the government should not only
consult widely across government and key stakeholders, but also directly involve theprivate sector, civil society and academia. Having citizens participate in the work on the
future SNRE and the definition of national investment strategies could be envisaged,building on the “Citizens’ Convention on Climate”.
Second, the IEA considers that in 2050, almost 50% of the global carbon emissions
reductions required for carbon neutrality will come from technologies that are currently at thedemonstration or prototype phase. Investment in RD&D and innovation remains critical.
Over the past decade, public energy RD&D funding has remained relatively flat, at around
EUR 1.2 billion, corresponding to roughly 9% of French public spending for R&D and
0.05% of national GDP. Energy R&D spending is, to a large extent, dedicated to nuclear
energy (mainly fission), energy efficiency and cross-cutting research areas. On an energy
RD&D budget per GDP comparison, France ranks sixth after Norway, Finland, Japan,
Switzerland and the Czech Republic. As a founding member of Mission Innovation, France
pledged to double its clean energy R&D funding (excluding nuclear) from the 2015baseline by 2020, but it did not succeed in doing so. This is a cause for concern andre-evaluation, given France’s ambitious plans for emissions reductions in hard-todecarbonise sectors that require more innovation quickly, like heavy industry and heavy
and long-distance transportation.

The government should secure current clean energy innovation funding (e.g. PIA, core
CNRS) and commit to raising it in sectors where more innovation is needed to achieve
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The economic downturn following the COVID-19 crisis may have a negative impact on
clean energy innovation, notably due to a short-term decrease in public and privatebudgets allocated to energy RD&D. Slower innovation today could have negative impacts
in the medium to long term on the economy (jobs, competitiveness) and the clean energy
transition more generally. The stability of RD&D support is critical, and funding even needs
to expand quickly and significantly on the way to net zero. Investing in innovation opens
significant opportunities for French companies and innovators to capture a share of
growing clean energy technology supply chains. For example, Air Liquide in hydrogen;Renault in EVs in China; and Total in renewables or carbon capture, utilisation and storage
are leading players in innovative technology segments.

The French Recovery Plan offers support to investment in RD&D and higher education
infrastructures and fiscal incentives (e.g. reimbursement of debt of research tax credits) orloans (e.g. loans for innovation support, subsidised loans for innovation) for corporates tocarry out innovation activities. While some of these mechanisms were tailored to clean
energy transition objectives (e.g. subsidised loans for innovation for car makers aimed at
low-carbon RD&D), funding could have been more tailored to the clean-tech sector.
To avoid disruptions of innovative start-ups, SMEs and demonstration projects in the clean
energy space, the government should ensure the continuity of support schemes and focus
on smaller scale, less complex, “shovel-ready” projects that also benefit SMEs
(e.g. hydrogen electrolyser installations building on the Hydrogen Deployment Plan for the
Energy Transition). These are more likely to have high stimulus effects than large-scale,novel projects. To provide alternative financing for start-ups and SMEs, the government
should prefer “matching funds” schemes with private sector actors instead of fully publicgrants, to ensure technologies under development are more likely to be market viable(e.g. planned equity in start-ups through Bpifrance).
Third, mechanisms for market pull could be improved. Beyond a large portfolio of public
procurement, regulatory rules and targets, France offers and promotes corporate andprivate investment support for energy demonstration and innovation through the researchtax credit. While this policy support to spur RD&D seems effective, French RD&D entities
noted that industry and market pull factors remained stagnant. Learning from tax credits
in other countries, such as the United States, France should evaluate its incentive
mechanisms, including the research tax credit. Recovery funding could be focused onretaining talent in SMEs to avoid discontinuing innovation capacities in the short term. The
bar for clean-tech start-ups in the French Tech Next40 index could be lowered.
For instance, in the United States, RD&D efforts are often supported by tax credits
authorised by Congress. The US government offers tax credits and other tax incentives tocertain energy sectors to incentivise the development or consumption of alternativetechnologies. Consumers can claim tax credits for buying alternative energy vehicles or
installing energy-saving equipment in their households. Congress has granted therenewables sector support with tax credits in the form of production tax credits andinvestment tax credits for solar, wind energy and advanced nuclear technologies. As partof the Bipartisan Budget Act passed in February 2018, Congress extended andsignificantly increased tax credits for CO2 use and storage under Section 45Q of theInternal Revenue Code. Specifically, the changes raised the amount of tax credits thatcarbon capture for enhanced oil recovery receives from USD 10 per tonne to USD 35 from2026, while lifting the credit for carbon capture in geological storage sites from USD 20 per
tonne to USD 50 per tonne. The legislation also did away with a previous annual cap on
the tax credits of 75 million tonnes of carbon dioxide. To support the nuclear new build

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goals in clean energy transitions (e.g. road transport, aviation biofuels, buildings, heavy
industry). It is a welcome development that the government has adopted acceleration
strategies for boosting technology innovation in four areas: 1) decarbonisation of industry;2) bio-sourced products and biofuels; 3) circular economy; and 4) energy systems
technologies. The first validated strategy in the energy field is “zero-carbon hydrogen”, witha EUR 7 billion investment, including EUR 2 billion in 2022-23, focused on the investment
in electrolysis, hydrogen powered heavy vehicles, and support to analysis and research ofsystem integration.

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6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

energy projects, the US administration also provided loan guarantees as well as production
tax credits like those granted to renewable generation projects (IEA, 2019).
Embedding energy innovation potential in infrastructure spending is an opportunity thatshould not be missed as part of the implementation of the recovery funding. This can bepart of several areas: clean energy infrastructure investment by local authorities (e.g. EV
charging, hydrogen networks, buildings retrofit, district heating and cooling), sectoral
industry bail-out plans (e.g. performance standards, deployment targets in aviation or
heavy industry to “pull” medium-term clean energy innovation) or public procurement (e.g.
targeting clean energy technologies that are close to market and can be scaled up quickly,
such as batteries, fuel cells, smart energy efficiency).
Patent data suggest that French public research institutes are strong on applied R&D for
new inventions, often in partnership with the large French companies. But French
corporations are not as strong in patenting compared to other countries and French
start-ups are not yet very present in venture capital markets.
Despite being a stated objective of the SNRE, engagement with industry and technology
leaders remains low within the SNRE’s governance and funding initiatives. The government
needs to maintain support to corporate RD&D in low-carbon energy areas and associatedhuman capital. This support, notably from the recovery funding, may be conditional upon
publicly defined low-carbon innovation missions, such as the aforementioned acceleration
strategies to ensure that R&D activities benefit society at large. Conditionality can also
include job guarantees, the fair distribution of financial returns, if any, with public research
institutions involved in public-private collaborative projects.
The SNRE is supported by oversight and governance through its monitoring committee,
which is convened every year to review the SNRE progress. This committee does notinclude industry or civil society stakeholders in the evaluation and monitoring. And it isunclear how the overarching tracking of results by the higher councils are co-ordinatedwith the SNRE evaluations or how that process feeds into the formulation of future energy
innovation priorities.
The government has put in place monitoring tools, including the PIA reporting and impact
reviews. The major sources of funding such as PIA, with a large coverage and structured
governance, allow monitoring the launched actions in a co-ordinated way. It remains lessevident to track results for the clean energy technology progress towards the national
strategy and investment objectives.

With regard to international research and innovation collaboration, France is an active
partner of IEA-CERT, IEA technology collaboration programmes, Mission Innovation, the
EU Strategic Energy Technology Plan, and the EU’s European Technology and Innovation
Platforms. International collaboration is critical for areas where France can show its
technology leadership globally and learn from other leaders. The government should work
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The Ministry for the Ecological Transition could accelerate delivery by consistently tracking
the energy- and climate-specific programmes and actions and their contributions towards
net zero objectives under the SNBC. Better tracking will help reassess priorities over timeand reallocate budgets accordingly, identify good practice approaches in certain R&D
programmes that might be applicable to other projects, focus on domestic strengths andweaknesses with the view to focus on comparative advantages, and capture global clean
energy technology supply chains.

Recommendations
The government of France should: Create a common vision on the future technology and innovation priorities of France’s
energy transition by evaluating and updating the National Energy Research Strategy,
in close collaboration with civil society and industry, to support the work on technology
pathways of the next National Low-Carbon Strategy and the two five-year energy
investment plans.
 Strengthen the delivery of the energy and climate component of large-scale funding
programmes by tracking results to ensure appropriate co-ordination of priorities andfunding. Require public funding recipients (projects, individuals and companies) toreport project and technology status or status changes after the expiration of researchfunding.
 Leverage opportunities for technology offtake and supply chains by further augmenting
RD&D funds and market incentives for the uptake of research-derived technologies
through instruments such as enhanced tax credits, follow-on funding, cost-sharing andother government scale-up support mechanisms.
 Activate and expand international collaboration efforts in clean energy RD&D sectors,
specifically with regard to the EU’s joint research centres and Mission Innovation 2.0
initiatives, building on France’s investment strategies for clean energy technology
deployment, such as hydrogen and bioenergy.

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closely with global partners to exchange experiences and knowledge, notably in Mission
Innovation 2.0 (second phase) for boosting transition technologies in support of investment
acceleration strategies, such as hydrogen and bioenergy. Recently, France also joined the
Clean Energy Ministerial Hydrogen Initiative.

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6. ENERGY RESEARCH, DEVELOPMENT AND INNOVATION

References
Cárdenas Rodríguez, M., I. Hascic and N. Johnstone (2019), Global patent applications forclimate change mitigation technologies – a key measure of innovation – are trending down,
IEA, Paris, www.iea.org/commentaries/global-patent-applications-for-climate-changemitigation-technologies-a-key-measure-of-innovation-are-trending-down.
Court of Audit (2013), The Development and the Conditions for Controlling the Tax Credit inFavour of Research, www.ccomptes.fr/fr/publications/levolution-et-les-conditions-demaitrise-du-credit-dimpot-en-faveur-de-la-recherche.
IEA (International Energy Agency) (2021a), Energy Technology RD&D Budgets 2020:
Overview, www.iea.org/statistics.
IEA (2021b), World Energy Investment, www.iea.org/reports/world-energy-investment2021.
IEA (2020), Tracking Clean Energy Innovation, www.iea.org/reports/tracking-clean-energyinnovation.
IEA (2019), Energy Policies of IEA Countries: United States 2019,www.iea.org/reports/energy-policies-of-iea-countries-united-states-2019-review.
Mission Innovation (2021), France, http://mission-innovation.net/our-members/france/
OECD (2021a), Researcher count data, based on OECD database “R&D personnel bysector and major field of R&D (FORD)”,https://stats.oecd.org/Index.aspx?DataSetCode=PERS_FORD (accessed in July 2021).
OECD (2021b), Total intramural R&D spending data, based on OECD database “Grossdomestic expenditure on R&D by sector of performance and type of R&D”,
https://stats.oecd.org/Index.aspx?DataSetCode=GERD_FORD (accessed in March 2021).
OECD (2021c), Climate change mitigation, Patents – Technology Development (database),https://stats.oecd.org/Index.aspx?DataSetCode=PAT_DEV (accessed on 8 July 2021).

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OPECST (Parliamentary Office for Evaluation of Scientific and Technological Options)(2017), Assessment of the National Energy Research Strategy, Summary of the Report
Produced, on behalf of the OPECST, by Anne-Yvonne Le Dain, MP,
www.senat.fr/fileadmin/Fichiers/Images/opecst/quatre_pages_anglais/OPECST_2018_000
4_synthese_SNRE_anglais.pdf.

Key data (2020 estimated)
Electricity generation: 528 TWh (nuclear 67%, hydro 12%, wind 8%, solar 3%,
biofuels 2%, coal 1%) -6% since 2009
Electricity net exports (2019): 57.7 TWh (imports 15.6 TWh, exports 73.3 TWh)
Electricity consumption (2019): 441 TWh (services/other 33%,
residential 36%, energy sector 2%, transport 2%) -1.5% since 2009industry

ENERGY SECURITY

7. Electricity

26%,

Overview
Low-carbon, secure and affordable electricity will be required to achieve net zero
emissions across the entire economy in the coming decades. In 2019, the role of electricity
in France’s total final energy consumption stood at 25%, above the IEA average of 23%.
Electricity demand is expected to substantially grow with the stronger electrification of thebuildings (with the installation of heat pumps) and transport sectors, as confirmed by RTE’s
decarbonisation scenarios presented in 2021 (RTE, 2021a, 2021b).

This will also entail major reforms in the French electricity market. The government needs
to decide on the power market design for this future, including through EU level
engagement, which relate to the organisation of the market, the role of the largest supplier,the incumbent Électricité de France (EDF), the regulation of hydropower and nuclear, andthe future of the regulated tariffs. Key elements of the future market design are theavailability and regulation of dispatchable capacity and the remuneration of a generation
fleet that is driven by fixed rather than variable costs. Second, the government needs toprepare the decision on the role of nuclear in the electricity mix beyond 2035. Third, as thenuclear generation fleet ages and the share of variable renewables grows, France needs
to ensure electricity security during its transition. A review of the capacity market
mechanism and demand-response management can be useful. Fourth, as the share ofvariable renewables is rising, the government is looking to expand the flexibility of thepower system by using demand response, grids/interconnections and hydrogen.

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Globally, France has the highest share of nuclear in its power generation (67% in 2020),
which has allowed the country to benefit from a low-carbon electricity mix for decades.
However, France’s power sector is going to face major transformations in the context ofthe legislated target of decreasing the share of nuclear in electricity production from 70%(pre- COVID-19) to 50% and the ambition of boosting the share of renewables to 45%
by 2035, alongside the phase-out of the remaining four coal-fired power plants by 2022.

7. ELECTRICITYElectricity supply and demand
Electricity generation
France’s electricity generation decreased by 7% between 2019 and 2020 to reach
528 terawatt hours (TWh) (Figure 7.1). In 2020, nuclear remained the main source ofelectricity, but at lower than usual levels (67%), following the closure of two reactors andlockdowns during the COVID-19 pandemic. The third source of electricity generation ishydro (12%), followed by natural gas (7%) and coal (1%). Coal decreased from 5%
in 2010, while renewables (including hydro) increased their role in electricity generation,
up from 80.4 TWh in 2010 to 116 TWh in 2020. Wind and bioenergy led this growth.
Bioenergy almost doubled (up from 6 TWh in 2010 to 11 TWh in 2020). Wind power saw
the highest growth (from 10 TWh in 2010 to 41 TWh in 2020). In 2020, solar and windmade up 11% of France’s electricity mix.
Figure 7.1 France’s electricity generation by source, 2000-20
600

TWh

Bioenergy and waste
Solar

500

Geothermal*

400

Wind

300

Hydro
Nuclear

200

Oil

100

Natural gas
Coal

0

IEA. All rights reserved.

France’s electricity supply comes mainly from nuclear, with a growing share of renewables.
Notes: TWh = terawatt hour. Bioenergy and waste includes non-renewable waste. Considering the marginal
difference between waste from renewables and waste including non-renewable sources, the present review
incorporated non-renewable waste.
* Geothermal is not visible at this scale and increased from 0.0 TWh in 2010 to 0.13 TWh in 2020.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

1

Nuclear capacity stood at 61.3 GW at the end of 2020 after the shutdown of the two reactors at Fessenheim.

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France’s installed generating capacity amounted to 135 gigawatts (GW) in 2019, up by
13% since 2009 (Table 7.1). Nuclear power accounted for 63.2 GW in 2019, 1 while thesecond-highest capacity source was hydro, with 26 GW. Installed solar and wind capacity
experienced noticeable increases between 2009 and 2019, with solar photovoltaic up fromjust 0.3 GW in 2009 to 9.4 GW in 2019 and wind from 4.6 GW to 16.5 GW over the decade.
Gas-fired power plant capacity doubled over the same decade, to reach 12.2 GW in 2019.

Coal power generation capacity has declined and in 2019 France had four remaining
coal-fired power plants, with a total capacity of 3 GW. The closure plan is confirmed for
Le Havre (April 2021) and must be determined by 2022 for the others (St. Avold,
Cordemais 2 and Garanne). Coal-fired power plants account for one-third of the CO2
emissions of the entire French power generation fleet, although they only contribute 1% to
the country’s electricity production. In 2019, coal represented less than 1% of domesticenergy production, 3% of total energy supply, 1% of electricity generation and less than
1% of total final energy consumption (TFC). The main sectors using coal are industry(56%, cast iron), electricity and heat production (25%), and manufacturing (14%).
Table 7.1 Structure and evolution of electricity generating capacity in France
Fuel typeInstalled capacity (2019) (GW)

Capacity share in 2019 (%)

Nuclear

63.2

46.6%

Thermal power plants

18.6

13.7%

- coal3.0

2.2%- heavy fuel

3.4

2.5%

- gas

12.2

9.0%

Hydro

25.6

18.9%

Wind

16.5

12.2%

Solar

9.4

7%

Bioenergy

2.1

1.6%

- biogas

0.5

0.4%

- biomass

0.6

0.5%

- waste

0.05

0.04%

Total

135.3

100%

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7. ELECTRICITY

Note: GW = gigawatt.
Source: RTE (2021c), Electricity Review 2020, https://assets.rte-france.com/prod/public/2021-03/Bilan electrique
2020_0.pdf

Electricity trade
France has been a net exporter of electricity for decades and is Europe’s largest electricity
exporter. Net exports decreased during 2009 and 2010 and 2016 and 2017 (Figure 7.2).
In 2019, France recorded net exports of 57.7 TWh, with only a marginal amount of total
imports (15.6 TWh in 2019), as illustrated in Figure 7.2. Net exports from France went
mainly to Italy (14.3 TWh), Germany (13.1 TWh), the United Kingdom (12.1 TWh), Spain(9.7 TWh) and Switzerland (4.1 TWh) with some exports to Belgium (2.8 TWh).

The Cordemais coal-fired power plant will be kept for residual operation of a few hours a year up to 2024, if necessary,
until the Flamanville 3 nuclear power plant and St Nazaire offshore wind farm are in full operation. Plans by EDF toconvert the Cordemais plant to biomass have not been confirmed.
2

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France’s transmission system operator (TSO) RTE operates a very large network of
106 000 km of power lines (at medium- to high-voltage levels above 63 kilovolts [kV], whilemost European TSOs only own/operate above 220 kV). Since 2017, 50.1% of the sharesof RTE are held by EDF, 29.9% by the Caisse des Dépôts and 20% by CNP Insurance.

7. ELECTRICITY

Net imports

Figure 7.2 France’s electricity net trade (imports/exports), 2000-19
10

TWhAndorra*0

Luxembourg-10

Switzerland

-20
-40

UnitedKingdom
Spain

-50

Italy

-30

-60

Germany

Net exports-70

Belgium-80-90

IEA. All rights reserved.

France has consistently exported electricity to its neighbouring countries, notably to Italy,
Germany and the United Kingdom, and increasingly to Spain and Belgium.
* Andorra: electricity trade to Andorra is not visible at this scale, accounting for less than 0.26 TWh in 2019.
Note: TWH = terawatt hour.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

France is well interconnected, with 17.4 GW of export and 12.5 GW of import capacity, oran interconnection rate of 11.4%. This is above the European interconnection target of
10% by 2020 (measured as electricity import capacity over installed generation capacity).
France has improved its interconnection capacity with the United Kingdom thanks to thecommissioning of the Interconnection France-Angleterre 2 in January 2021. Plans are in
progress on the Celtic Interconnection linking France and Ireland (planned by RTE and
EirGrid) and works are under way for the Eleclink to the United Kingdom (through the
Channel Tunnel) to be commissioned in 2022.
A new interconnection to Italy (Savoie-Piemont) is expected to start by the end of 2021.
The integration with the Iberian Peninsula was strengthened with the commercial openingof a new interconnection in 2015, which will further increase with the planned high-voltage
direct current cable France-Spain (Gulf of Biscay), which however will only come online by2027. France remains the main bridge for Spain and Portugal to access the European
electricity market and progress is expected under the Lisbon Declaration of Spain, Portugal
and France (Figure 7.3).

Electricity distribution and supply

3
In application of the French energy code, local communities are “local authorities or groups of local authorities” (descollectivités territoriales ou des groupements de collectivités territoriales).

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In France, public local authorities 3 are the conceding authorities for electricity (and gas)
distribution in a specific framework created after 1946. The National Federation of Granting
Authorities and Regies, which was created in 1934, brings together around 500 authorities,
in addition to the large cities and urban communities.

7. ELECTRICITY

ENERGY SECURITY

Figure 7.3 Electricity infrastructure of France

IEA. All rights reserved.

In application of the French Energy Code, local authorities can concede the electricity
distribution network operation to:in mainland France: Enedis or a local distribution company, one of the so-called entreprises
locales de distribution (ELDs)

in the areas which are not connected to mainland France (except for Mayotte and Wallis
and Futana): EDF SEI

in Mayotte: “Électricité de Mayotte”

In mainland France, more than 80% of the concession contracts are being renewed during
2018 and 2023. Most of the renewal has already taken place. The law does not allow
customers to choose a DSO other than the historical one, except under limited conditions.
Enedis holds about 95% of the distribution concessions in terms of customers served(serving 35 million customers, including those in the large cities like Paris, Marseille andBordeaux). The other 5% of concessions are held by 116 local electricity (and gas)
distribution companies (ELDs), serving 1.8 million clients.
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in Wallis and Futuna: “Électricité de Wallis et Futuna”.

7. ELECTRICITYIn France, 95% of these distribution companies serve networks with less than 100 000
clients. Only five ELDs (around Strasbourg, around Metz, around Grenoble, in the Vienne
department and in the Deux-Sevres department) serve more than 100 000 customers andadopted functional and legal separation between distribution and supply activities.
Investments in (transmission and) distribution networks are financed by the tariff for theuse of public power grids (tarif d’utilisation des réseaux publics d’électricité, TURPE),
which is regulated by the Energy Regulatory Commission (CRE) in four-year periods.
France equalises or cross-subsidises the distribution grid tariffs across its territory (urban
areas subsidise rural ones). Investment decisions, however, vary from one DSO toanother, and are subject to discussion with the local communities.

Electricity demand
Shares of electricity consumption by sector have remained relatively stable (Figure 7.4).
Total electricity consumption reached 441 TWh in 2019, with residential consumption at
160 TWh (36%), followed by services at 147 TWh (33%), industry at 116 TWh (26%) andenergy transformation at 9 TWh (2%).
Figure 7.4 Electricity demand in France by sector, 2000-19
TWh
500
450
400
350
300
250
200
150
100
50
0
2000

Energy*Industry**
Transport
Services/other***
Residential

2002

2004

2006

2008

2010

2012

2014

2016

2018

IEA. All rights reserved.

Residential, services and industry are the main electricity consuming sectors in France.
* Energy includes oil and gas extraction, coke ovens, gas works, petroleum refineries, and nuclear industry.
** Industry includes non-energy use.
*** Services/other includes commercial and public services, agriculture, forestry, and fishing.
Note: TWh = terawatt hour.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

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In 2019, France’s share of electricity in TFC stood at 25%, which was the eighth-highest
among IEA countries (Figure 7.5), above the IEA average of 23%. By international
comparison, in 2020, France had the highest share of nuclear, one of the lowest shares ofwind and solar, and the fourth-lowest share of fossil fuels in the electricity mix (Figure 7.6).

Figure 7.5 Share of electricity in total final consumption in IEA countries, 201950%

electricity share

40%
30%
20%
10%
0%

Coal

Oil

Natural gas

Nuclear

Bioenergy and waste

Hydro

Solar

Wind

Geothermal

IEA. All rights reserved.

France’s share of electricity in total final consumption is higher than the IEA30 average.

ENERGY SECURITY

7. ELECTRICITY

Note: Data for Turkey are unavailable for 2019.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Figure 7.6 Electricity generation for IEA countries, 2020
Australia
MexicoNetherlands
EstoniaJapan
Korea
GreeceUnited States
IrelandItaly
TurkeyCzech Republic
Germany
Portugal
United Kingdom
Spain
Hungary
Belgium
Austria
Slovak Republic
CanadaDenmark
New ZealandFinland
Luxembourg
FranceFranceNorwaySwedenSwitzerland
0%
Oil

20%
Natural gas

Coal

40%
Peat

Nuclear60%
Bioenergy and waste

80%
Hydro

Wind

100%

Solar

GeothermalFrance has a low diversity of power generation, with the highest share of nuclear and one of
the lowest shares of wind and solar in electricity generation by international comparison.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

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7. ELECTRICITYElectricity policy
France’s electricity policy is governed by the national planning frameworks. The Energy
and Climate Law of 2019 set the goal of reducing the share of nuclear in the electricity mix
to 50% by 2035. The latest two successive five-year energy investment plans(programmation pluriannuelle de l’énergie, PPE) adopted in April 2020 set the goals forthe electricity mix up to 2028, with a major role for renewable energy, which shall contribute
40% in 2030 and 45% by 2035. In line with the National Low-Carbon Strategy (Stratégie
Nationale Bas-Carbone, SNBC), France aims to decrease coal use across the economy,notably in the power sector. The SNBC and the PPE articulate the policy goal to phase out
the remaining four coal power plants by 2022 and end coal use in district heating by
supporting the switch to biomass/waste within five years (and reduce coal use by 75% in
industry by 2028, except in the steel sector). However, beyond 2035, there is no
specification of the sources for the future electricity mix.

Market reforms
Generation and wholesale market
France is part of the EU common wholesale electricity market. Thanks to the market
coupling of north-west Europe (15 countries including France) with south-west Europe(Spain and Portugal) in 2014, France is part of a wider EU electricity market place. Threeelectricity exchanges operate in France: the European Power Exchange (EPEX spot) and
NordPool EMCO AS for spot products and the European Energy Exchange (EEX) for
derivatives.
The market design is adapted to the French historic context. While generation and retailare fully open to competition, in line with EU directives, the French national utility EDF
holds a strong position in the market. By owning and operating all nuclear reactors andmost of the hydro power plants (in total 80% of generation capacity), plus all transmission
and distribution network operators (RTE and Enedis are subsidiaries of EDF but
operationally highly independent), and 70% of the residential retail segment (CRE, 2019),
EDF has been able to dominate the French electricity market for a long time. EDF is alsoa major market player in the field of electricity generation from renewable assets under its
new arm “EDF Energies nouvelles”. The nuclear developer Framatome, which is anothersubsidiary of EDF, was created during the recent reorganisation of the French nuclear
industry.
EU rules oblige the French government to tender out the 29 hydropower concessions(large-scale plants), which expired by the end of 2020 for competition and require EDF tooffer nuclear generation to competitors at historic costs (accès régulé à l’électricité
nucléaire historique, ARENH).

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The CRE considers that EDF does not abuse its market power and noted a decline in
EDF’s retail margins. The margin decreased from 6% in 2008 to 1.5% in 2019, alongside
the decrease in spot prices across the European wholesale market in recent years up to2020 (CRE, 2019).

Hydropower
With regard to hydropower, around 29 concessions expired between 2011 and 2021
without being subject to competition. In 2015, the European Commission (EC) initiated acase against France, noting EDF’s dominant position in the hydropower sector. Other thanpower production, hydroelectric dams participate in the provision of reserve and ancillary
services and the capacity market (through the capacity obligations). In 2019, the EC issued
formal notice to France, as well as to other major European countries, to requirecompliance with Community law on the allocation of hydropower operating rights.
In view of the social, economic and ecological issues linked to hydropower, successive
governments have not tendered hydropower concessions, but discussed a series ofreforms. Under the Energy Transition for Green Growth Act (2015), local communities canbe a concession partner (as part of a hydroelectric semi-public company). The regroupingof concessions which are hydraulically linked implies the definition of a new common expiry
date. This new date may be later than the expiry date initially taken for an ungroupedconcession. A new tender will also be needed in such cases after the expiry of the newdate. As part of the reflections on the reorganisation of the EDF group (see Box 7.1), thegovernment is also exploring the option of allocating concessions without competition to
dedicated public structures, controlled by the state, either in-house or in so-called régies. 4
France argues it would optimise the operation of the dams and boost investment, while
redistributing financial resources to the regions through new royalties. The discussions on
the conditions to be met for a new structure are still ongoing with the EC.

ENERGY SECURITY

7. ELECTRICITY

Nuclear energy
The Law for the New Organization of the Electricity Market (NOME) introduced in 2010 theregulated access tariff (ARENH, 2011; a transitionary mechanism until the end of 2025)
for competitors of EDF to gain access to electricity generated by the nuclear plants at aregulated tariff. Each year EDF must ensure that alternative suppliers have access to alarge share of electricity produced by EDF’s nuclear plants (100 TWh/year 5) at the
cost-based regulated tariff. The CRE fixed the regulated rate of the ARENH at EUR 42 per
megawatt hours (MWh) since 2012, allowing EDF to recover the annual depreciations
evaluated at historic costs of investment for 25% of its ageing nuclear fleet.
The price of the ARENH has been kept constant since its introduction and is a maximum
price for competitors to get access to 100 TWh/year. It is not a guaranteed price for EDF:
if market prices are lower, competitors do not buy electricity from EDF through the ARENH,
but rather buy it on the market. Until 2018, competitors hardly bought electricity from EDF
at the fixed tariff, as wholesale electricity prices in France and Europe were below the fixed
tariff, creating substantial revenue shortages for EDF’s refurbishment plans. Since 2018,
this trend has reversed, as wholesale market prices have been mostly above the ARENH
price, and competitors regained interest in EDF’s “cheaper” energy under the ARENH. The

Under French law, a régie is a public authority in charge of the management of a public service or a mode ofmanagement of a public service. A régie is different from a delegated public service, which includes a contractual
relationship.
5
The Energy and Climate Act of 2019 allows the government to raise the ceiling of the amount available under the
ARENH up to 150 TWh. Any modification of the ceiling requires approval from the European Commission, which also
includes the level of the ARENH.

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4

7. ELECTRICITY

CRE and the Competition Authority underline that alternative suppliers have entered themarket thanks to the ARENH and EDF’s retail share came down to 70% in 2019 (from
90% in 2015).
The reform of the scheme is under discussion in France. A new scheme was underconsultation in 2020. According to the proposed scheme, all of EDF’s production would
sell at market prices and additional payments to or from EDF would be made ex post to
close the gap between the market price and a pre-set price that would cover all costs(contract for difference). The scheme would be regularly revised and be more symmetrical,
with a market-based strike price. The methodology would be established by the CRE andwould need approval from the EC.
In terms of the economics, a recent analysis by the IEA and the Nuclear Energy Agency(NEA) of the levelised costs of electricity in France shows that as far as instalment of new
capacity is concerned, nuclear new build technology incurs costs above
USD 5 000/kilowatt electrical (kW e), while solar technology remains the lowest (below
USD 2 000/kW e). However, such capital cost comparisons do not reflect the system value
and differences in the load factor, which is 85% for nuclear and 18% for solar PV. The
study also showed that the long-term operation of the French nuclear power plants has
investment costs of USD 673/kW e, and is a highly cost-effective measure for France,
judging by the levelised costs of electricity (see also Chapter 8).

Box 7.1 The restructuring of the French utility EDF
In 2020-21, France has discussed the restructuring of EDF, following a proposal by the
French government and EDF for the so-called Projet Hercule, later renamed Grand EDF.
This proposal builds on a plan to create two distinguished entities (EDF bleu and EDF vert).
The first entity, EDF bleu, would regroup dispatchable low-carbon assets (i.e. nuclear,hydroelectric power plants and gas-fired power plants) as well as the transmission system
operator RTE. It would also retain majority ownership in the second entity, EDF vert, which
would regroup renewables, the electricity distributor Enedis and energy services. The
second entity would be considered a subsidiary of the integrated structure, with its capital
open to outside investors.

The project has met opposition by the trade unions, some local municipalities (owners of the
distribution grids and some operators of hydroelectric plants) and is under discussion with
the European Commission as far as competition, state aid and the regulatory framework areconcerned (notably price and network regulation and the future of the regulated access tariff
for nuclear). Discussions between Brussels and the Ministry of the Ecological Transition
continued for more than a year. In May 2021, Grand EDF was put on hold until after thepresidential elections in 2022.

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According to a hearing at the French parliament in February 2021, the government has threepriorities: 1) maintain an integrated group (EDF vert remaining fully integrated in the group);2) safeguarding employees (public service, highly educated engineers); and 3) protecting
consumers against price increases in the EU market (fluctuation of CO2 prices, higher gas
or coal prices, etc.) with regulated tariffs by EDF. The government is focusing on a strong
integrated player (national champion) to lead the energy transition, including investments inrenewables and new nuclear and the modernisation of the historic fleet.

Retail market
France’s retail market consists of 38.2 million customers, with an annual consumption of
412 TWh. The market has been open for competition since 2007; in France, consumers
can choose between market offers and the regulated tariff, set by the government. Only
incumbent suppliers (EDF and local distribution companies [ELDs]) can supply electricity
at the regulated rate (other suppliers cannot), but they can also compete with the othersuppliers and also make market offers.
Since the opening of the market in 2007, there is a considerable amount of choice inFrance, with the emergence of competitive market offers, price comparison tools and an
ombudsman who supports consumer empowerment. According to the CRE, in 2020,31 suppliers served residential segments and 38 the non-residential sectors. The fourlargest suppliers are EDF, Engie, Total Direct Energie and Eni.
From 2014 to 2020, the switching rate increased from 1% to 3% per year, with a small dip
during the COVID-19 pandemic. Consumers are either not aware that they can switch
away from regulated tariffs or are inert and do not want to switch. A small proportion of theFrench household market has switched away from EDF, whose market share hasremained around 70%, despite several new entrants and alternative suppliers being able
to offer competitive prices to consumers in France. The CRE finds the retail market forresidential consumers highly concentrated, with a Herfindahl-Hirschman Index 6 of 5 000(CRE, 2020).

ENERGY SECURITY

7. ELECTRICITY

Regulated tariffs
In 2016, the government abolished regulated tariffs for large industry and commercial
consumers (green and yellow tariff bands). As of 2021, only residential consumers andmicroenterprises remain eligible to benefit from regulated tariffs (blue tariffs), if they choose
to do so. For eligible consumers, these regulated tariffs are considered last resort tariffs.
France has introduced market offers which often have slightly lower prices than theregulated tariff. This was certainly the case when wholesale prices were low prior to 2018.
The consumers remaining on the regulated tariff may end up paying a higher price per
kWh due to this pass-through of the wholesale price levels. While the incumbent can alsooffer market prices and compete with alternative suppliers in France, the revenues fromthe regulated tariff are only available to the incumbent supplier.

6
HHI = The Herfindahl-Hirschman Index or HHI is a measure for industry concentration taking into account the size offirms in relation to the industry. It is calculated by adding the sum of the squares of the percentage market shares ofeach market participant. For example, a market consisting of five competing firms, each with a 20% share of themarket, would have an HHI score of 2 000 (i.e. 400 x 5). HHI is typically used to help assess the degree of market
dominance and potential for market power abuse. Views vary on the interpretation of HHI scores. This study uses thescale developed by the European Union, with scores of 750‐1 800 considered indicative of moderate concentration;
scores of 1 800 to 5000 indicative of high levels of concentration and scores above 5 000 indicative of very highconcentration consistent with the presence of substantial potential market power.

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The calculation of the regulated tariffs changed in 2014 to a method that allows alternative
suppliers to compete with the incumbent on price. Before 2014, it was based on theaccounting costs of the integrated operator. Tariffs now reflect the costs incurred by an“average” supplier. Regulated tariffs are now established by the sum of the price of regulated
access to incumbent nuclear electricity (ARENH); the cost of the electricity supply

7. ELECTRICITY

component, which includes the capacity guarantee, transmission costs and marketing costs;
as well as a rate of return on investment. Since 2015, the CRE proposes the regulated
electricity sale tariffs to the Ministers for Economy and Energy, along with reasonedarguments. The government then has three months to contest or adopt the proposals.
In 2021, the government has no plans to end the price regulation for households, butintends to review regulated tariffs by 2022. Under EU rules, the government has to review
regulated tariffs in 2022 and 2025, based on an assessment by the CRE and theCompetition Authority of the contribution of the tariffs to the general economic interest(price stability, supply security, social and territorial cohesion), their impact on the retailmarket and for the category of consumers for whom regulated prices are deemednecessary. In its review of 2021, the CRE concludes that it is too early to phase out
regulated tariffs and that the introduction of dynamic pricing should be confined to market
offers alone (CRE, 2021).
In 2021, the government announced measures to limit the increase in the electricity tariff
to 4% in February 2022 to shield the electricity tariffs for households against the energy
price hikes in the fall of 2021. An expansion of the energy voucher could also be
considered. In 2020, the government issued a one-off contribution to the energy bill withan energy voucher of EUR 100 to vulnerable consumers (5.8 million beneficiaries).

Retail prices and taxes
France’s electricity prices followed similar price trends as its neighbouring countries during
the period 2000-20, both for industry and households. France remained the country withthe lowest prices, compared to Spain, Italy, Germany and the United Kingdom (Figure 7.7),
until 2020, when the industry price ranked slightly higher than Spain’s. However, taxes onelectricity in France are among the highest in the EU.
Figure 7.7 Electricity prices for France and selected IEA countries, 2000-20
Industry
250

Households

USD/MWh400

USD/MWh

350

200

300
250

150

200

100

150
100

50

50
0

0
FranceSpain

Germany

United Kingdom

Italy

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France’s electricity prices have been among the lowest of its neighbouring countries.
Source: IEA (2021b), Energy prices and taxes 2020, IEA World Energy Statistics and Balances (database),
www.iea.org/statistics.

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Note: MWh = megawatt hour.

In 2020, industry electricity prices in France reached USD 125/MWh, the tenth-highest
among IEA countries, with a 20% tax share (Figure 7.8). Household electricity prices were
USD 215/MWh, 13th highest among IEA countries, with a tax share of 34%.
Figure 7.8 Electricity industry and household prices in IEA countries, 2020
Industry

200
180
160
140
120
100
80
60
40
20
0

USD/MWhTax component

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7. ELECTRICITY

IEA. All rights reserved.

Households
400
350
300
250
200
150
100
50
0

USD/MWhTax component

IEA. All rights reserved.

France’s electricity prices are close to the IEA average, but have higher than average tax
shares.
Notes: MWh = megawatt hours. Tax Information is not available for Ireland or the United States. 2020 industry data
are not available for Australia or Greece. 2020 household data are unavailable for Greece. Industry data are notavailable for Australia, Mexico or New Zealand. Household data are not available for Mexico.

Box 7.2 Towards a consumer-centred clean energy transition

Increasing customer exposure to dynamic and time-of-use pricing while protecting
vulnerable consumers through targeted transfers that do not unduly distort efficient priceformation.

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International experience suggests that empowering consumers and increasing their
participation is critical to ensure a people-centred energy transition. The International Energy
Agency considers the following principles vital for empowering consumers in the transition:

7. ELECTRICITY

A competitive, dynamic retail market to encourage the development of innovative
products and services that can harness demand response effectively and at least cost.



Ready access to detailed, real‐time customer information while ensuring privacy, to help
stimulate competition, facilitate competitive entry, support the emergence of innovative
business responses and improve customer choice.



A knowledgeable and well‐informed customer base that has the capability andopportunity of taking full advantage of the available choices.



Market processes for contracting, switching and billing that are as simple and seamlessas possible to keep transaction costs to a minimum.



Legal and regulatory governance frameworks that reduce uncertainty; establish clearlyspecified rights, responsibilities and obligations on contracting parties; promote greater
harmonisation of standards and functionality specifications; and maximise scope forparticipation among potential service providers and customers.

Enabling technologies that provide cost‐effective, real‐time metering information,verification and control capability to support the introduction of real‐time pricing, thedevelopment of a wider range of innovative demand-response products, and more
effective customer choice.

Electricity security and emergency measures
Framework for security of electricity
The legislative framework for electricity security is based on the French Energy Code andthe provisions of EU Regulation 2019/941 on risk preparedness in the electricity sector.
The transmission system operator, RTE, is responsible for assuring real-time powersystem adequacy as well as the security, safety and efficiency of the power network.
RTE publishes an annual safety assessment of the power system which gives an overview
of the power system’s security levels. RTE also publishes an annual adequacy
assessment (bilan prévisionnel), that contains an in-depth study of the supply-demandbalance for the coming five to ten years and quantifies the average disruption duration,
analyses risk scenarios, and evaluates the electricity generation or demand-response
capacities needed to ensure security of electricity supply.

France has a legal requirement to maintain security of electricity supply to a three-hourloss of load expectation (LOLE) standard (Article D. 141-12-6 of the Energy Code). In themodels produced by RTE, a disruption expectation of three hours per year represents a
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At the European level, RTE works with the regional co-ordination centres (CORESO,
TSC). RTE is the biggest TSO in continental Europe, so it has an important role in theEuropean system security. This was highlighted during the 8 January 2021 incident, when
the Continental Europe Synchronous Area was separated into two areas (the North-WestArea and the South-East Area) due to cascaded trips of several transmission network
elements. RTE and Terna (Italy) automatically disconnected 1.7 GW of industrial
consumers (out of a total system load of about 200 GW in the North-West Area) to prevent
any further frequency drop and avoid activating load shedding, which is undesirable.

consumer cut-off expectation of less than two hours. The LOLE is at a level comparable
to that of other European countries. The Energy Code (Article D. 141-12-6) defines thenotion of “disruption” as the use of exceptional (contracted or not) means to keep thestability of the system, such as calls for voluntary reduction of electricity consumption by
citizens, asking for help from other TSOs outside of the market, reducing margins or
voltage, and load shedding. The definition used by RTE to build its models refers tosituations in which the normal operation of the market no longer ensures a balance
between supply and demand.

Capacity market
France’s electricity generation has been designed to meet peak, not average, annual
demand. The French electricity system has a peak load during winter months, which overthe past 20 years has fluctuated between 80 GW and 102 GW. Security of electricity
supply needs to be ensured for winter (evening) electricity peak demand, which reacheda historic peak on 8 February 2012 of 102 GW. For every 1°C temperature drop, power
demand increases by 2.4 GW, mainly driven by electric heating.

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7. ELECTRICITY

Up to 2030, peak electricity demand is expected to be subdued due to greater energy
efficiency in buildings, the deployment of heat pumps (which provide more regular power
demand and thermal inertia) and demand-side flexibility development. At the same time,the increasing electrification of the transport and residential sectors will push total demand
growth. Winter evening peaks will continue to be an issue, notably with higher shares ofrenewables, as on some winter days there is very little wind power generation (doldrums).
With a view to manage reliability concerns, France has been successful in putting in placea capacity mechanism and activating large demand response.
In 2017, France implemented a capacity mechanism (decentralised capacity market withcapacity obligations), based on the established three-hour LOLE security of supply level.
On the basis of the security of supply criterion, suppliers need to acquire enough capacity
certificates to meet the peak consumption of their customers. Producers committed tomake their capacities available during consumption peaks are granted certificates, which
they can sell to retailers.

The new capacity selected in the tender rounds covering the 2021-27 and 2022-28 periods
totalled 377 MW, mainly demand response and battery storage. Prices in the capacity
auctions for the delivery year 2020-21 have been in the range of EUR 15-30/kW, but theauction in 2019 gave a price of EUR 0/kW. That was the first delivery during whichinterconnector capacities were offered to the market (before then, the whole contributionof interconnectors was implicitly taken into account as a reduction of the capacity obligationof suppliers). This structural change has not been anticipated by market participants, and137

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In 2020, the government revised the rules governing the capacity mechanism to align itwith the European framework. The capacity mechanism is open to generators anddemand-response operators in neighbouring countries, subject to the availability of
expected capacity of the interconnector at peak time (around 7 GW in total). France
introduced long-term tenders for new capacities, which are organised on a yearly basis by
RTE, four years prior to each delivery year and remain open for a period of six months.
The first tenders were conducted in 2019. Participation in these tenders was restricted totechnologies less than 200 grammes of carbon dioxide per kilowatt hour, which rules out
new fossil fuel-fired power plants.

7. ELECTRICITY

resulted in a price of EUR 0/kW during one auction. New build plants can offer fixed
contracts for up to seven years, which is shorter than in other markets, weakening the casefor new build capacity. Tenders so far have triggered load reduction and battery storage,
but no new generation capacity. In 2021, upon the request of the Ministry of the EcologicalTransition (General Directorate for Energy and Climate Change), RTE carried out a reviewof the capacity mechanism (RTE, 2021d).

Medium-term system adequacy
According to RTE’s latest five-year supply/demand outlook (RTE, 2021e), the system
operator is sounding the alarm about a very difficult adequacy situation in the coming
years, distinguishing three main periods until 2030:

Vigilance until 2024: low margins due to the lower availability of the nuclear fleet (theCOVID-19 crisis caused delays in maintenance work), the delay of the Flamanville EPR(European pressurised reactor) and delays for new renewables (mainly offshore windfarms and solar and onshore wind to a lesser extent). Winter 2021-22 will be under “special
vigilance”.

Transition period 2024-26: The electricity system is returning to acceptable operating
margins, without being comfortable, thanks to the commissioning of the Flamanville EPR,
offshore wind farms and onshore renewable energies, and the development of demand
response and interconnections.



Significant improvement period 2026-30: RTE expects an increase in margins and thelevel of security of supply compared to today, strengthening the resilience of the electricity
system for climatic or industrial hazards.

RTE has changed its outlook from 2020 to 2021 by lowering the alert level to vigilance, as
it is optimistic about the commissioning of new renewable capacity and a slower reboundof electricity demand after the COVID-19 pandemic than expected. Up to 2024, several
levers may be activated to improve the adequacy situation: controlling consumption,
optimising the schedule for nuclear reactor shutdowns and maintaining availability as wellas using the Cordemais coal-fired power plant for residual operation a few hours a year ifnecessary until the Flamanville EPR and offshore wind park at Saint-Nazaire come into
service.

Future electricity mix beyond 2035 and system integration
In the coming years, France needs to decide on its future electricity mix, a decision thatinvolves technical, economic, social and environmental aspects. The 2020 PPE does notdefine the sources of the mix after 2035, when nuclear is expected to reach 50% ofelectricity supply (down from 70.6% in 2019) with the shutdown of 14 reactors (including 2
at Fessenheim in 2020).

Under France’s PPE, renewable generation (wind and solar) is expected to grow from
59 TWh in 2019 to 223 TWh in 2035. Replacing nuclear with renewable energy requires a
substantial change in power system operation, including the need for modulation to follow
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Much will depend on the evolution of electricity demand (and exports). Already by 2030,
electric heating will further increase as the new Environmental Regulation (RE2020)
foresees the phase-out of gas boilers in the residential sector. The National Low-Carbon
Strategy (SNBC) expects an increase in electricity net exports by 2030.

net load variations. In the coming decade, the system will need to operate with co-existing
ageing reactors and new renewable capacity.
The Ministry of the Ecological Transition tasked RTE to assess a series of scenarios forFrance’s future energy mix, including 100% renewables and no nuclear in 2050 as well asa 50% share of nuclear production for the longer term. In 2021, RTE consulted on acomprehensive set of decarbonisation scenarios. Results were published in October 2021
(RTE, 2021d). France is expected to see an increase in electricity consumption to
645 TWh by 2050 in the reference scenario due to greater electrification of the transport
and industry sectors as well as hydrogen production (RTE, 2021a).
RTE expects the power system to be able to integrate the planned additions of renewableenergy up to 2030. However, much will depend on the timetable for nuclear closures. With
15 million electric vehicles expected in 2030, the power system can cover the demand,
according to RTE. New flexibility needs arise beyond 2030 to 2050: 40-60 GW of additional
low-carbon generation is estimated by 2050. Their system integration will require thatdynamic pricing, smart charging, and batteries and demand-side response are activated.

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7. ELECTRICITY

As part of the scenarios for the future of France’s electricity mix, the IEA and RTE
conducted a technical feasibility study of system integration needs for France with very
high shares of variable renewables in the horizon to 2050 (IEA/RTE, 2021). The report is
articulated around four essential conditions to operate such a system. First, the systemneeds significant “sources of flexibility” from large-scale storage, demand management orstrong cross-border interconnection. Second, the stability of the frequency needs to be
maintained. While there is consensus among experts that it is theoretically possible,
large-scale demonstrations are required to confirm this condition is met in real life. Third,
the network operator must have operational reserves to be able to intervene to balance
the system. Finally, the electricity networks will have to be adapted in the medium term.
RTE studied the total cost of six detailed scenarios with different shares of nuclear andrenewables with a view of achieving carbon-free electricity by 2050 (see also Chapter 5).
RTE clearly states France can best achieve the EU -55% pledge in an economic mannerby accelerating investment in renewables and extending the lifetime of existing nuclear
reactors. Achieving net zero without investment in renewable energy would be impossible
according to RTE (RTE, 2021b).
The system integration of the rising shares of variable renewables requires robust efforts
to flexibilise the system with stronger grids and interconnections, demand response,storage, and hydrogen, which altogether will result in major changes to the system
operation.

Electricity grids and interconnections

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RTE’s 2019 Ten-Year Network Development Plan (which includes an environmental
assessment) underlines the need for network investments in replacements and a 30%
increase in grid expansions by 2030. The grid needs to be adapted to accommodate newflows (like offshore wind) by increasing the capacity of existing lines, building new ones
and dismantling lines that would be less useful. RTE also needs to adapt the grid’s digitalframework, while raising cybersecurity standards.

7. ELECTRICITY

RTE’s Network Development Plan foresees investments in new interconnections, thus
doubling France’s interconnection capacity by 2035. For 2030, France aims to double its
import capacity (26 GW, or 16.5% of interconnectivity) to above the 15% EU 2030 target.
Under the EU Clean Energy Package, at least 70% of interconnection capacity must be
made available to the market for cross-zonal trade by 2025 at the latest, unless the country
asks for a derogation justified by operational security constraints and puts in place anaction plan to alleviate those. In the case of France, DC borders (with Great Britain) comply
with the target, but there are limited data available on how this target will be implemented
on AC and hybrid borders. A derogation is in place and will probably be applied until the
Swiss transmission system is integrated into the co-ordinated capacity calculations of theadjacent regions.

Demand response (“effacement”)
France has strongly expanded demand response across the entire electricity market andis a leader in demand response in Europe. In 2019, France had demand-response capacityof 2.9 GW, with 2.3 GW from the capacity mechanism and 0.6 GW from suppliers which
rely on dynamic pricing. Bigger electricity suppliers can offer demand response in theenergy market depending on wholesale market prices (the so-called NEBEF mechanism).
Besides, RTE has in place interruptibility schemes with industry (see below on emergency
response). The PPE plans for 6.5 GW of demand response by 2028 through tenders. A
new network tariff regulation (TURPE 6) has come into force in August 202, which will
enable the system operator to offer differentiated network tariffs to suppliers (seasonal,
hourly, voltage-specific).
Demand from residential consumers, and their electric heating demand, is not controllable
and does not respond to price signals today. Traditionally, France had a diverse set oftime-of-use pricing, which should rebound with the full roll-out of smart meters. Since 2015,
France is in the process of rolling out smart meters and targets 35 million by the end of
2021. Enedis’ Linky technology is being deployed, which is also deployed by ELDs in theirareas. As of 2019, more than 28 million smart meters had been installed.

StorageToday, storage facilities cannot participate in balancing reserves (Manual Frequency
Restoration Reserve) due to IT constraints in RTE’s system. RTE and Enedis havelaunched calls for tenders enabling storage (and flexibility providers) to offer local flexibility
services, notably under the capacity market. France is working on reducing the barriers to
the roll-out of storage, including the introduction of a legal framework, the simplification of
the network connection rules and the clarification of tax rules.

Generation flexibility

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The French nuclear fleet is highly flexible, a unique feature by international comparison.
The system also has some 4.3 GW of pumped hydro capacity, 13 GW of hydropower
plants and some 13-20 TWh of thermal storage (hot water tanks). The introduction of
hybrid renewable plants (equipped with batteries and flywheels or super capacitators) is
only at the development stage.

Hydrogen
As part of France’s national hydrogen strategy, the government announced an investment
of EUR 7 bln into 6.5 GW of electrolyser capacity by 2030, including EUR 2 bln from theRecovery Plan. France has around 160 hydrogen projects at various stages ofdevelopment and operation (from production facilities to bus refuelling stations and test
hubs injecting hydrogen into the gas grid). The government confirmed that hydrogenproduction will be a competitive business, using renewable electricity or nuclear as asource.
French industry is scaling up hydrogen developments, including at the ports and in the gas
grids. The HyDeal Ambition project brings together European gas TSOs which are getting
ready to support hydrogen trade with new dedicated hydrogen pipelines, laid along theright of way of existing gas pipelines across Western Europe and North Africa (seeChapter 9). To date, the French government has not supported hydrogen imports from
Spain (via the gas network).

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7. ELECTRICITY

Crisis management and emergency response
In case of a crisis and depending on its scale, the National Electricity Continuity Plan orOrganization of the Civil Security Response’s plans (plans ORSEC) – in force in eachFrench department – are activated to conduct crisis management.
At the national level, the prime minister is the crisis co-ordinator. He can entrust operational
management of the governmental crisis unit to any minister, depending on the situationand sectors affected. Most of the time, the delegation goes to the Minister of the Interior
for a crisis on French territory or to the Minister for Europe and Foreign Affairs for aninternational crisis. At departmental level, the préfet of the department oversees crisis
management and co-ordinates all operational aspects of the situation, including law
enforcement management. When a crisis concerns two or more departments, therespective “préfet de zone de défense et de sécurité” (out of 12 established across thecountry), takes the leadership of crisis management.
In case of a crisis, RTE, the sole balance responsible party, can resort to exceptional
measures to ensure the security of supply (LOLE) standard, such as (in order of
escalation):

calls for voluntarily reducing electricity consumption by citizens (EcoWatt, media
campaigns)

solidarity and co-operation between system operators from different countries, such asreconciliation of flows and emergency import capacity increases






interruptible contracts of electricity supply to the largest industrial consumers
5% reduction of voltage in the distribution network
reduction of operational margins (secondary and tertiary reserves)

Interruptibility schemes are used to address three different situations: 1) frequency control
reserve to avoid frequency dropping below 49.82 hertz (Hz); 2) to remedy balancing issues
by the national control centre (mFRR); or 3) to reduce congestion. Industry players that
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as a last resort, rolling load shedding and emergency curtailment of consumers.

7. ELECTRICITY

agree to such contracts must make a demand reduction available within 5 seconds after
receiving the interruption order from RTE for 7 500 hours a year. The volume of thescheme was increased to 600 MW in 2014. Today, 1 600 MW of interruptible capacity iscontracted between RTE and industry players each year. Non-contractual levers are lastresort actions that may only be used in exceptional circumstances and are subject topossible liability responsibility of RTE.

Assessment
France is Europe’s largest net exporter of electricity, with exports to Belgium, Germany,
Italy, Spain and the United Kingdom, and has the highest share of nuclear generation (71%in 2019) among IEA countries, followed by hydropower (10%). France is embarking on amajor transition, with a legislated decline of the share of nuclear from 70% in 2019 to 50%
by 2035, under the 2019 Energy and Climate Law, while aiming to double the share of
renewable electricity from 22% in 2019 to 40% of total electricity generation by 2030 andclosing its remaining coal plants by 2022.
In the next five years, France must take major decisions to support the transition of theFrench power system in the longer term. France will need to firm up plans for its nuclear
work programme while continuing to promote investment in renewable energy and its
system integration.
In the electricity sector, France will need to tackle market reforms in four critical areas:
1) restructuring EDF, the future of the ARENH price mechanism and the future of regulated
tariffs; 2) a decision on the role of nuclear in the generation mix beyond 2035 while limiting
the environmental impacts and pursuing climate objectives; 3) ensuring short- to
medium-term electricity security during the transition; and 4) expanding the flexibility of thepower system through demand response, the development of interconnections withneighbouring countries and the potential future contribution of hydrogen.

Electricity market reforms

On the side of nuclear, EDF has to make 100 TWh/year of the nuclear electricity it
generates available to alternative suppliers on the wholesale market at a set price(ARENH) of EUR 42/MWh. When market prices were largely below the ARENH,
competitors would turn to the market and not use the ARENH, meaning that EDF’s nuclear
cost was not recovered. There is no guarantee for EDF to cover its cost. With price levels
above the ARENH in recent years, competitors used access to cheaper energy under the
ARENH mechanism. The opening up of the hydropower concessions has been prepared
for a long time, but there is no indication that the latest proposal for reform (transfer to a
public entity, a so-called régie) will be approved by the European Commission.
As the ARENH is supposed to end in 2025, France needs to level the playing field beyond
the lifetime of the ARENH to continue to support competitive retail and wholesale markets.
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EDF remains the largest electricity generator and retailer in France, owning and operating
all nuclear generation capacity and most hydropower generation capacity, for a total of
80% of all generation capacity. Since 2007, wholesale and retail markets are open tocompetition and France is part of a wider EU electricity marketplace. Efforts to increase
competition in the French market, driven partly by European Commission investigations
on the side of nuclear or hydro power, are only slowly showing an impact.

In accordance with European law, concessions for hydroelectric power must be renewed
through competitive tenders. As future concessions expire, a competitive process should
be initiated to ensure the future management and investment in these sites in a way that
supports a competitive market.
In 2020-21, France discussed the restructuring of the EDF group, the so-called “Projet
Hercule” or Grand EDF, involving the reorganisation of its generation, transmission,
distribution and retail activities. The renewal of the majority of France’s distribution
concessions is under way. Enedis has anticipated the renewals and the majority of
distribution concessions have been renewed since 2018. As of December 2020, out of
370 target concession contracts (after merger of contracts), 257 had been renewed. Thereis a need to resolve the financing of upgrades of the existing nuclear fleet (through thereform of the ARENH) and the financing of new nuclear reactors. Importantly, the solutions
to these issues should not hamper the energy transition or competition in the electricity
markets.

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7. ELECTRICITY

The retail market was fully opened to competition on 1 July 2007, but in 2021, EDF retains
a 70% share of the residential supplier market, down from 82% in 2017. Commendably,
France abolished regulated tariffs for large consumers in 2015 and for medium-sized
consumers in 2021. There are around 30 suppliers, with 4 large ones (EDF, Engie, Total
Direct Energie and Eni). Thanks to the introduction of market offers, there is considerable
and increasing choice, as small and residential consumers can choose between market
products and regulated tariffs, set by the government and provided by the incumbent
suppliers. The incumbent supplier status and regulated tariffs are limited to EDF and about
130 local distribution companies (the so-called ELDs). Most of them belong tomunicipalities.
The IEA encourages further market opening by reviewing regulated tariffs. Despite theplans set out under the 2019 Energy and Climate Law to end regulated tariffs for
medium-sized non-residential consumers, there are no plans to end them for residential
consumers. The government will review the tariffs in 2022 and 2025 based on input reports
from the CRE and the Competition Authority. The review should examine the role of theregulated tariff in the market, what it is trying to achieve, and whether the tariff is necessary
to achieve the objectives and measures to boost consumer engagement, a core pillar of
the people-centred energy transition.

Given the higher costs to consumers of the regulated tariff, the government should review
the need for regulated prices. By international comparison, regulated tariffs are often seen
as a way to protect consumers from excessive costs by acting as a price cap, but this does
not appear to be the role of the tariff in France. Regulated tariffs applicable to the entire
population are inefficient for addressing energy poverty.

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While a number of EU countries still have regulated tariffs, several are working to phaseout regulated prices, identify the vulnerable consumers and transfer them to targeted social
aid schemes. For instance, Lithuania has a roadmap to lower the threshold of consumers
under regulated prices over three years and achieve full market opening, as the conditions
for competition improve with the roll-out of smart meters and the introduction of dynamic
prices in the country. The Spanish regulator, CNE, has introduced dynamic pricing
components in the regulated tariffs. In the United Kingdom, suppliers are required to put
customers on their cheapest tariff option following the end of a customer’s contract.

7. ELECTRICITY

Several lessons learnt can be explored in France: positive experience was gained fromthe gradual -of regulated tariffs in the French gas market (see Chapter 9), as competition
increased. France was one of the pioneers of demand response and time-of-use tariffs
and is in the process of completing the roll-out of smart meters. In 2019, around 28 million
smart meters had been installed and 35 million are envisaged by end of 2021. This
presents an opportunity to introduce dynamic prices, offers for smart charging or griddispatch of electric vehicles, week-end tariffs and super off-peak hour products. The smart
meter deployment is an important milestone for introducing more dynamic components inthe tariffs and for lifting regulated prices where competition emerges. The government has
put in place targeted social protection schemes, the energy cheque, which could form avaluable basis for the gradual phase-out of regulated prices for the energy poor. CRE has
carried out an evaluation of the regulated tariffs in France and concluded that there is stilla need for such tariffs and that the split between market offers and regulated prices works
well to increase competition (CRE, 2021).
The EU Electricity Directive requires governments to facilitate and speed up switching of
suppliers within 3 weeks and by 2026 within 24 hours. The EU Clean Energy Package
requires that any consumer requesting it should be given a smart meter and access todynamic pricing. Dynamic pricing refers to time-of-use and peak pricing products, which
are important for demand-response products. They may be linked to the wholesale prices
in some cases, like in the Nordic markets.

Electricity security
Regarding security of supply in the short term, the TSO anticipates the need for a specificvigilance up to 2024, in the light of the expected closure of around 5 GW of capacity,
including 3 GW of coal, and the actual closure of the Fessenheim nuclear reactors while
the EPR of Flamanville is still not operating. Over the same period, new renewables
capacity will come online; however, the maintenance schedules of the nuclear fleet need
to be adjusted due to the impacts of the COVID-19 pandemic, while demand is notexpected to rebound to pre-COVID levels.
To ensure the short-term supply-demand balance up to 2024, the TSO identified threelevers that could improve the security of supply at national level. These were: 1) controllingdemand, especially during peak periods; 2) optimisation of the schedule and duration of
nuclear reactor downtimes; and 3) maintaining the Cordemais coal-fired power plant withrestrictions.

There is a particular challenge for France to achieve the diversification objective of its
electricity mix without any additional conventional plants, as security of supply
requirements are not an adjustment variable. The role of nuclear energy remains animportant variable. The PPE explicitly states that no nuclear reactor should be shut down

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In the medium term, the share of nuclear is supposed to decline from 70% of electricity
generation in 2019 to 50% by 2035, while electricity demand will increase. In practice, thiswill mean the closure of 14 nuclear reactors (including the 2 at Fessenheim). The target isfor renewable generation to double its contribution to total final electricity generation, from
22% today to 40% by 2030. Energy efficiency is the central pillar of France’s National LowCarbon Strategy, targeting a 20% decrease of final energy consumption by 2030 and 50%
by 2050. However, its contribution so far remains well below expectations.

if it would mean that security of supply requirements are not respected. Hence, thedeployment of renewables and energy efficiency constitutes a major stake to implement
France’s energy strategy.
Comparing the potential stress in the capacity margin reported by RTE and the lack of new
capacity brought forward by the capacity market’s long-term tenders calls into question theability of the capacity market to bring forward the capacity needed to provide security ofsupply. Given the potential for future adequacy constraints, a review of the capacity market
should be undertaken. In 2021, the analysis lead by RTE concluded that the Frenchcapacity mechanism has positively contributed to the French security of supply by avoiding
the decommissioning of several GW of dispatchable plants (RTE, 2021c). The
government’s review should further improve the mechanism. Some simplification andimprovement in price formation could be brought to the mechanism. Low capacity market
prices and relatively short contracts show that the capacity mechanism may need someadjustments. Moreover, the situation of the wholesale markets has changed, with a rise inwholesale prices following the rise in carbon prices across the EU, and greater interaction
with nuclear and renewable support schemes. The CRE is evaluating the capacity
mechanism which, in addition to the RTE assessment, will feed into the discussion ofreforms of the mechanism for the period after 2025.

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7. ELECTRICITY

As the deployment of renewables increases and they make up a higher proportion ofgeneration capacity, challenges will arise as to how the electricity network is operated. It
may require the definition of security of electricity supply to evolve in the medium term(from the early 2030s onwards). Typically, security of supply has been an adequacy issue,
meaning: is there sufficient supply to meet peak demand? To date, managing other system
requirements, such as frequency and inertia, have been possible using the technologies
that are deployed.
As the technology mix changes, the factors which influence adequacy will shift from being
mainly impacted by extreme cold spells or simultaneous unavailability of the nuclear fleet
to include other factors, such as low wind speeds and low availability of wind or solar (“duckcurve”). The system will need to become more flexible to accommodate this, meaning
greater levels of interconnection, storage and demand-side response will be needed. The
ability of the changing technology mix to provide frequency and inertia services will alsochange, and likely mean that new approaches to network “operating tools” are needed.
Similarly, the risks the system is exposed to may change; for instance, as more capacity
becomes connected at the distribution level.

One area is grid investment: RTE identified the need for investments in grid
replacements. A 30% increase of grid capacity plus the doubling of interconnection
capacity by 2030 needs to be started now to be in place by 2025. To maintain the securityof the French network, and the broader security of the European-wide network, thequestion of how grid balancing services can be provided with a high volume ofrenewables must be addressed. The importance of energy storage, including from

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The government has the stated ambition to increase the deployment of renewables in the
French electricity system. It would be prudent to move beyond assessing the technicalfeasibility of system integration needs and to begin identifying, demonstrating andimplementing the specific changes that will be required for system operation, as outlinedin the IEA/RTE joint report in 2021.

7. ELECTRICITY

hydrogen electrolysers, battery storage or traditional pumped hydro, will require thecompletion of the regulatory framework for storage in France.

Electricity emergency response
Peak winter demand by far exceeds average power consumption. To date, the maximum
power demand experienced was 102.1 GW, reached on 8 February 2012 during an
exceptional cold snap. Based on the last 20 years, peak demand has varied between
80 GW and 102 GW, as it is highly sensitive to temperature. The number of instanceswhere demand has exceeded domestic supply rose sharply in 2017, to 63 half days from40 half days the year before. The number of occurrences stayed at around 63 half days
between 2017 and 2019.
RTE relies on several response measures to maintain system balance, such as calls for
citizens to voluntarily reduce electricity consumption, requests from other European
transmission operators within the framework of emergency contracts, activation ofinterruptible capacities in large-scale industry, reduction of voltage on the distribution
networks and ultimately targeted load sheading. While this is a diverse portfolio, RTE’s
crisis response may require a review as France and neighbouring countries areundergoing their energy transitions in the coming five years.
Concerning the contribution from demand response by voluntary demand reduction on
behalf of citizens, it is uncertain if consumers are actually cutting consumption. And new
trends of higher electrification (heat pumps and electric vehicles) and smart meters canincrease system flexibility and new pricing structures may offer new levers for RTE,
including storage.
Even though France is a highly interconnected country and RTE plans to doubleinterconnection capacity by 2035, neighbouring countries are on similar pathways toreplace existing ageing nuclear and coal generation. This may impact interconnector flows
in the future, and neighbouring countries may call upon France more heavily. It is goodnews that new interconnections to Italy and the United Kingdom will be completed in 2021.

The risk assessment of electricity security of supply is currently set out in several
documents: the National Plan of Electricity Continuity and the Organisation of Civil Security
Response, which sets out the emergency response in a crisis; and the French Energy
Code, which sets the obligations for a network operator. Other documents refer to different
levels of application, i.e. European, national, zonal, departmental and for specific sites.
Bringing these documents together to show a clear and unified description of the risks tothe electricity system, mitigations and emergency response measures will help emergency
response planning. This is planned as part of the application of Regulation (EU) 2019/941
in France; the government must publish a risk preparedness plan by 5 January 2022.

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RTE also plays a role in maintaining European-wide electricity system security andresponding to unusual system conditions, working with the various regional co-ordination
centres. The availability and utilisation of interruptible load in France helped to correct for
the January 2021 fault in the Continental Europe Synchronous Area. This was different
from the winter of 2006, which saw 15 million residential customers disconnected. Thisshows the substantial developments that have been made on co-ordination and response
to unusual system events by the continental TSOs, including RTE.

It is not clear from the existing documents to what extent consequential impacts are being
considered in emergency response planning. For example, if there is an incident on theelectricity system, what will the impact be on the gas or transport infrastructures? The
government should focus its attention on these cross-sector dimensions, notably amid new
emerging threats.

Recommendations
The government of France should:
Electricity markets and security
 Take a timely decision on the future of the electricity generation mix to maintain adecarbonised, affordable and secure electricity mix after 2035 in light of the legal
targets to reduce the share of nuclear to 50% by 2035 and increase renewable energy.

ENERGY SECURITY

7. ELECTRICITY

 Ensure a level playing field and support competition in wholesale and retail electricity
markets during the energy transition, by reforming the regulated access tariff tocontinue ensuring competitive access to nuclear capacity and by implementing
competitive tenders following the expiration of hydropower concessions.
 Adapt the electricity retail market design to support the energy transition by:>

Reviewing the role and impact of regulated tariffs and consider a roadmap for theirphase-out while introducing dynamic price components, based on experience inother countries.

>

Continuing to enhance competition and transparency in the retail market while
reducing barriers and keeping the cost of switching low.

>

Utilising the wide roll-out of smart metering to bring forward smart/time-of-use
tariffs, particularly to incentivise demand reduction at times of peak demand.

 Review the capacity mechanism to address the short- to medium-term adequacy gap
outlined by RTE and ensure the mechanism can bring sufficient capacity forward at
the lowest cost to the consumer.
 Progress to demonstrating, and ultimately implementing the technical changes
required to operate the network with a mix of demand response and dispatchable
capacity alongside high volumes of variable renewable capacity.
Electricity emergency response Consider the interactions between the electricity, gas and oil sectors, andconsequential impacts to other sectors when developing emergency response
policies.

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 Ensure that the tools and levers available to the transmission system operator to utilise
both flexible and dispatchable capacity are adequate to mitigate against theuncertainties of capacity closures and commissioning of new capacity during thetransition, and maintain the reliability of the system to the required standard.

7. ELECTRICITY

References
CRE (Energy Regulatory Commission) (2021), Assessment Report of Regulated Electricity
Prices – June 2021, www.cre.fr/Documents/Publications/Rapports-thematiques/rapport-devaluation-des-tarifs-reglementes-de-vente-d-electricite-juin-2021.
CRE (2020), Observatory: Retail Electricity and Natural Gas Markets 4th Quarter 2020,www.cre.fr/content/download/23575/296237.
CRE (2019), Monitoring: The Operation of Wholesale Electricity and Natural Gas Markets
2019, www.cre.fr/content/download/22667/286119.
IEA (International Energy Agency) (2021a), World energy balances, IEA World Energy
Statistics and Balances (database), 10 September 2021, www.iea.org/statistics.
IEA (2021b), Energy prices and taxes 2020, IEA World Energy Statistics and Balances(database), www.iea.org/statistics.
IEA (2021c), Conditions and Requirements for the Technical Feasibility of a Power Systemwith a High Share of Renewables in France Towards 2050, www.iea.org/reports/conditionsand-requirements-for-the-technical-feasibility-of-a-power-system-with-a-high-share-ofrenewables-in-france-towards-2050.
RTE (2021a), Energy Futures 2050: Review of Phase I, BP50_Bilan de la consultation
publique.pdf (rte-france.com).
RTE (2021b), Futurs Energétiques 2050, https://assets.rte-france.com/prod/public/202110/Futurs-Energetiques-2050-principaux-resultats_0.pd
RTE (2021c), Bilan Electrique 2020, Accueil RTE Bilan électrique 2020 (rte-france.com).
RTE (2021d), Retour d’expérience mécanisme de capacité, www.servicesrte.com/files/live/sites/servicesrte/files/pdf/MECAPA/Retour%20d’exp%c3%a9rience%20mecanisme%20de%20capacite_
Document%20complet.pdf.

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RTE (2021e), Bilan prévisionnel 2021, Les bilans prévisionnels | RTE (rte-france.com).

ENERGY SECURITY

8. Nuclear
Key data (2020)
Number of reactors: 56, at 18 sites
Installed capacity: 63.2 GW*
Electricity generation: 354 TWh, -17% since 2010
Share of nuclear: 67% of total electricity generation (70% in 2019, 76% in 2010)* Nuclear capacity stood at 61.3 GW at the end of 2020 after the shutdown of the two reactors at Fessenheim.

Overview
The role of nuclear energy is considerable in France’s electricity mix. Nuclear energy from56 reactors with an installed capacity of 63.2 gigawatts (GW) ensured 67% of Frenchelectricity generation, which amounted to 354 terawatt hours (TWh) in 2020 (Figure 8.1).
The role of nuclear has decreased from a high of 78% of electricity generation and
450 TWh of generation in 2006. An additional European pressurised reactor (EPR) is
currently being prepared for commissioning at the Flamanville site.
Figure 8.1 Nuclear power generation in France, 2000-20
450
400
350
300
250
200
150
100
50
0

TWh

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Nuclear
Nuclear share

IEA. All rights reserved.

The share of nuclear in electricity generation is decreasing, and was 67% in 2020.
Note: TWh = terawatt hour.

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Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

8. NUCLEAR

All reactors are operated by Électricité de France (EDF), the main utility in France, at
18 different sites. Nuclear energy plays a key role in the government’s effort to reducegreenhouse gas (GHG) emissions to achieve climate neutrality by 2050 based on lowcarbon, affordable and secure electricity supply and energy independence. This role isenhanced by the fact that nuclear power plants in France not only run in baseload mode,
but can operate flexibly. They thus contribute actively, together with renewables,hydropower and demand response, to balancing demand and supply at the system level.

The role of nuclear in France’s energy transition
The 2015 Energy Transition for Green Growth Act stipulated that the share of nuclear
energy in the electricity supply shall be limited to 50% by 2025; the 2019 Energy andClimate Law extended the target year to 2035, as the 2025 objective was unachievablegiven the pace of renewable energy development. A 50% share of nuclear in electricity
generation in 2035 would translate into a nuclear power capacity of around 52 GW reachedby shutting down 14 reactors of 900 megawatts (MW) and commissioning the EPR in
Flamanville.
Under France’s National Low-Carbon Strategy (Stratégie Nationale Bas-Carbone[SNBC]), a decarbonised electricity sector is expected to help otherwise hard-to-abate
sectors, such as heavy industry, transport or buildings, to reduce their emissions throughelectrification and sector coupling, including hydrogen.
There is limited visibility as to the future role of nuclear beyond 2035. The multiannual
energy plan (la programmation pluriannuelle de l’énergie [PPE]) with two five-year periods
confirms that no additional nuclear capacity is needed before 2035, but calls for the full
assessment of a nuclear work programme by mid-2021. If France decides to maintain theshare of 50% after 2035, long-term operation of existing plants and new builds are likely
to be required.
Careful socio-economic assessments of the long-term electricity and energy mix and theircosts under different scenarios are an essential basis for any timely and well-foundeddecision. Several stakeholders are contributing to such assessments. Mandated by thegovernment, the transmission system operator RTE finalised a study on the feasibility andcosts of several scenarios with different shares of renewables and nuclear energy thatwould all satisfy the objective of achieving net zero carbon emissions in 2050. The
final scenarios by RTE presented in October 2021 serve as a basis for the politicaldecision.

Outlook for nuclear energy
In the short run, low-carbon nuclear energy provides the all-important backbone of
the French electricity supply. In addition to large amounts of electricity, dispatchable
nuclear power generation provides flexibility at the level of the season, the week and,sometimes, the day as well as system services, such frequency stabilisation and inertia.
As the share of nuclear power in the electricity supply is planned to decrease, EDF will
likely have to shut down 14 nuclear reactors by 2035, including the 2 reactors that wereclosed in 2020 at the Fessenheim site in the Alsace region after 42 years of operation.
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The role of nuclear energy is best understood by looking at three different time horizons.

Table 8.1 Nuclear power reactors in France
Name

Type

StatusReference unit
power
(MW)

Gross electrical
capacity(MW)First gridconnection

Belleville-1

PWR

Operational

1 310

1 363

1987-10-14

Belleville-2

PWR

Operational

1 310

1 363

1988-07-06

Blayais-1

PWR

Operational

910

951

1981-06-12

Blayais-2

PWR

Operational

910

951

1982-07-17

Blayais-3

PWR

Operational

910

951

1983-08-17

Blayais-4

PWR

Operational

910

951

1983-05-16

Bugey-2

PWR

Operational

910

945

1978-05-10

Bugey-3

PWR

Operational

910

945

1978-09-21

Bugey-4

PWR

Operational

880

917

1979-03-08

Bugey-5

PWR

Operational

880

917

1979-07-31

Cattenom-1

PWR

Operational

1 300

1 362

1986-11-13

Cattenom-2

PWR

Operational

1 300

1 362

1987-09-17

Cattenom-3

PWR

Operational

1 300

1 362

1990-07-06

Cattenom-4

PWR

Operational

1 300

1 362

1991-05-27

Chinon B-1

PWR

Operational

905

954

1982-11-30

Chinon B-2

PWR

Operational

905

954

1983-11-29

Chinon B-3

PWR

Operational

905

954

1986-10-20

Chinon B-4

PWR

Operational

905

954

1987-11-14

Chooz B-1

PWR

Operational

1 500

1 560

1996-08-30

Chooz B-2

PWR

Operational

1 500

1 560

1997-04-10

Civaux-1

PWR

Operational

1 495

1 561

1997-12-24

Civaux-2

PWR

Operational

1 495

1 561

1999-12-24

Cruas-1

PWR

Operational

915

956

1983-04-29

Cruas-2

PWR

Operational

915

956

1984-09-06

Cruas-3

PWR

Operational

915

956

1984-05-14

Cruas-4

PWR

Operational

915

956

1984-10-27

Dampierre-1

PWR

Operational

890

937

1980-03-23

Dampierre-2

PWR

Operational

890

937

1980-12-10

Dampierre-3

PWR

Operational

890

937

1981-01-30

Dampierre-4

PWR

Operational

890

937

1981-08-18

Flamanville-1

PWR

Operational

1 330

1 382

1985-12-04

Flamanville-2

PWR

Operational

1 330

1 382

1986-07-18

Golfech-1

PWR

Operational

1 310

1 363

1990-06-07

Golfech-2

PWR

Operational

1 310

1 363

1993-06-18

Gravelines-1

PWR

Operational

910

951

1980-03-13

Gravelines-2

PWR

Operational

910

951

1980-08-26

Gravelines-3

PWR

Operational

910

951

1980-12-12

Gravelines-4

PWR

Operational

910

951

1981-06-14

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Two to four reactors are planned to be closed by 2028. Other closures will most likely
involve those reactors reaching their fifth decennial safety review. Reactor closures are
expected to be well distributed throughout France and no further nuclear site will be fully
closed down. This is due to a desire to limit the social impacts, leave the door open for
new builds and distribute economic impacts (Table 8.1).

ENERGY SECURITY

8. NUCLEAR

8. NUCLEAR
Name

Type

StatusReference unit
power
(MW)

Gross electrical
capacity(MW)First gridconnection

Gravelines-5

PWR

Operational

910

951

1984-08-28

Gravelines-6

PWR

Operational

910

951

1985-08-01

Nogent-1

PWR

Operational

1 310

1 363

1987-10-21

Nogent-2

PWR

Operational

1 310

1 363

1988-12-14

Paluel-1

PWR

Operational

1 330

1 382

1984-06-22

Paluel-2

PWR

Operational

1 330

1 382

1984-09-14

Paluel-3

PWR

Operational

1 330

1 382

1985-09-30

Paluel-4

PWR

Operational

1 330

1 382

1986-04-11

Penly-1

PWR

Operational

1 330

1 382

1990-05-04

Penly-2

PWR

Operational

1 330

1 382

1992-02-04

St. Alban-1

PWR

Operational

1 335

1 381

1985-08-30

St. Alban-2

PWR

Operational

1 335

1 381

1986-07-03

St. Laurent B-1

PWR

Operational

915

956

1981-01-21

St. Laurent B-2

PWR

Operational

915

956

1981-06-01

Tricastin-1

PWR

Operational

915

955

1980-05-31

Tricastin-2

PWR

Operational

915

955

1980-08-07

Tricastin-3

PWR

Operational

915

955

1981-02-10
1981-06-12

Tricastin-4

PWR

Operational

915

955

Flamanville-3

PWR

Under construction

1 630

1 650

Bugey-1

GCR

Permanent shutdown

540

555

1972-04-15

Chinon A-1

GCR

Permanent shutdown

70

80

1963-06-14

Chinon A-2

GCR

Permanent shutdown

180

230

1965-02-24

Chinon A-3

GCR

Permanent shutdown

360

480

1966-08-04

Chooz-A(Ardennes)

PWR

Permanent shutdown

305

320

1967-04-03

Super-Phenix

FBR

Permanent shutdown

1 200

1 242

1986-01-14

Fessenheim-1

PWR

Permanent shutdown

880

920

1977-04-06

Fessenheim-2

PWR

Permanent shutdown

880

920

1977-10-07

G-3 (Marcoule)

GCR

Permanent shutdown

40

43

1960-04-04

GCR

Permanent shutdown

39

43

1959-04-22

HWGCR Permanent shutdown

7075

1967-07-09

G-2 (Marcoule)El-4 (Monts
D’arree)PhenixFBR

Permanent shutdown

130

142

1973-12-13

St. Laurent A-1

GCR

Permanent shutdown

390

500

1969-03-14

St. Laurent A-2

GCR

Permanent shutdown

465

530

1971-08-09

Note: MW = megawatt. PWR = pressurised water reactor. GCR = gas cooled reactor. FBR = fast breeder reactor.
HWGCR = heavy water gas cooled reactor.

By 2050, the electricity sector will need to be decarbonised in line with France’s net zeroby 2050 target. In most scenarios, nuclear energy will continue to play an important role.
France RTE has also carried out scenario-building exercises assuming a complete phaseout of nuclear power, with electricity production relying primarily on variable renewables
and hydroelectricity (RTE, 2021). RTE confirms that investment in renewables andextending the lifetime of existing nuclear is the most economical solution in meeting net
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Source: IAEA (2021), France, Power Reactor Information System,
https://pris.iaea.org/PRIS/CountryStatistics/CountryDetails.aspx?current=FR.

zero. The public debate has changed in 2021, with nuclear new builds and small modular
reactors alongside renewable energy taking the centre stage of the energy policy debatewith the new Investment Plan by 2030 and announcements by President Macron.

Modernisation and long-term operation
Planning for the future contribution of nuclear energy to low-carbon electricity generation
will need to take into account that the average age of the reactors composing the French
nuclear fleet is 35 years. The oldest plant (Fessenheim) was connected to the grid in 1977
and after a pace of rapid build-up with up to eight reactors commissioned per year in the
1980s, the most recent one (Civaux-2) came into operation in 1999 (Figure 8.2).
Figure 8.2 History of commissioning pressurised water reactors in France, 1977-99

ENERGY SECURITY

8. NUCLEAR

IEA. All rights reserved.

Note: MW = megawatt.

Regarding long-term operations, EDF is currently engaged in a vast programme ofrefurbishing its nuclear reactor fleet and preparing it for operations beyond 40 years (theso-called Grand carénage).

Long-term operations of nuclear plants under stringent safety requirements are acost-effective manner of producing low-carbon electricity. The IEA/NEA publication
Projected Costs of Electricity: 2020 Edition thus indicates for France costs of around
USD 30/MWh for continuing operation for a minimum of either 10 or 20 years (Figure 8.3)
at a broad range of discount rates (IEA/NEA, 2020).
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The French regulatory system does not set a plant lifetime, but requires the licensee toperform an in-depth safety review every ten years. Each review lasts several months andincludes several safety improvements. In February 2021, the Nuclear Safety Authority
defined the safety improvements to be deployed by EDF on the 32 900 MW pressurised
water reactors (Fresard, 2021). Until 2036, each reactor will be individually reviewed andsafety improvements implemented. From 2025 onwards, the 20 1 300 MW pressurised
water reactors will undergo the same periodic safety review. EDF estimates the cost of theGrand carénage programme at EUR 49.4 billion for the 2014-25 period alone.

8. NUCLEARLCOE (EUR / MWh)

Figure 8.3 Projections for the levelised cost of electricity in France by technology
140
120

Fuel costs

100
80
O&M costs

60
40
20
0

Capital costs
Nuclear LTO Solar PV(20 years) utility scaleWindonshoreNew nuclear

Solar PV
commericalWind
offshore

Solar PV
residential
IEA. All rights reserved.

Notes: LCOE = levelised cost of electricity. MWh = megawatt hour. O&M = operating and maintenance. LTO = longterm operation. PV = photovoltaic. Data are based on a 7% discount rate and costs are projected for the year 2025
based on data submitted by the Ministry of the Ecological Transition.
Source: IEA/NEA (2020), Projected Costs of Generating Electricity 2020, www.iea.org/reports/projected-costs-ofgenerating-electricity-2020.

The outlook for nuclear new build
France is considering the construction of several new nuclear reactors. The French nuclear
industry stressed the importance of undertaking nuclear new build as part of a long-term
programme that commits to several new constructions to allow for scale effects. EDF
proposed to the government the construction of six EPR2. The EPR2 builds on the original
EPR design, of which two reactors are already generating electricity in the People’s
Republic of China (Taishan) and four more are under construction in France (Flamanville),
Finland (Olkiluoto) and the United Kingdom (Hinkley Point). While the two Taishan reactors
are operating well, the Flamanville and Olkiluoto projects have been hampered by delays
and cost overruns. A 2019 report on the EPR construction at Flamanville, commissionedby the French government, identified skill shortages in the project owner, lack of design
maturity and project management issues as key drivers for delays and costs increases(Folz, 2019). These conclusions are well aligned with the findings of a recent analysis on
cost reductions in nuclear new build (NEA, 2020). EDF has responded to the report’s
findings with a number of internal and industry-wide reforms, including the EUR 100 million
Excell plan for the development of excellence, high-quality skills, competence andreinforcement of project governance.

At the international level, EDF is learning from its experience in the construction of EPRs.
The Hinkley Point project, which started construction in 2017, is implementing a strategy
of systematically taking the lessons of prior EPR projects into account. Similar learningbenefits are also expected for the second new build project in the United Kingdom of two
new EPRs at Sizewell in Suffolk. In addition, EDF is currently exploring possibilities for
additional nuclear new build projects, including in the Czech Republic, India and Poland.
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In October 2021, France announced a EUR 30 bln investment plan for 2030, which targets
French industrial development in the energy, automotive and space sectors, including
EUR 8 bln dedicated to energy technology investment in hydrogen and small modular
reactors; EUR 4 bln for electric and plug-in hybrid vehicles.

Preparations to enable choices at the political level for the construction of new nuclear
power plants in France are under way and a final decision on this major new build
programme should be taken after the 2022 presidential election. A detailed governmental
report laying out all the aspects relevant for a decision is expected in the fall of 2021. Incase of a positive decision, construction of the first two reactors might begin shortly
afterwards, with completion expected in 2035-36. In EDF’s view, the two remaining pairs
should follow in intervals of about four years. The second pair could thus be completed
by 2039-40 and the final pair in 2043-44.
EDF proposes the development of the EPR2 model and the construction of three pairs ofreactors for a total of EUR 52 billion (bln) overnight (excluding all financing costs). 1 In
addition to ensuring long-term availability of domestic supply of firm, low-carbon electricity,a major nuclear new build programme would also maintain advanced technical capabilities
in an industry with export potential. In addition to the 1 650 MW EPR2, France also
supports the global development of small modular reactors. The Nuward reactor, with two
modules of 170 MW, is primarily aimed at replacing coal-fired power plants on theinternational market.

ENERGY SECURITY

8. NUCLEAR

Financing nuclear and electricity market design
Nuclear energy has a profound impact on the design of the French electricity market. Like
most other low-carbon technologies such as wind, solar photovoltaics (PV) andhydroelectricity, nuclear energy has comparatively high fixed and low variable costs. In thepast, regulated electricity tariffs provided the visibility and revenue certainty that investors
require. However, in the European electricity markets the wholesale electricity price is set
at variable costs of the marginal plant.
A 2010 agreement between the French government and the European Commission
translated into the Law for the New Organization of the Electricity Market (NOME). It
attempted to strike a balance between an element of full cost recovery at predictable prices
and competition. It specifies that each year, EDF is obliged to sell up to 100 TWh, roughly
one-quarter of its nuclear energy production, at a fixed price to alternative energy suppliers
under a procedure called the “regulated access to historical nuclear electricity tariff” (accès
régulé à l’électricité nucléaire historique, ARENH). The relevant price that has been set by
the regulator since 2012 is EUR 42/MWh. The French government is currently considering
raising the ceiling of the ARENH to 150 TWh and the relevant price to EUR 48/MWh,according to the Energy Regulatory Commission (CRE) for historic fleet and Flamanville,
but this would require prior approval by the European Commission (see Chapter 7).

1

www.concerte.fr/system/files/document_travail/2020-06-30_Presentation_GT-couts.pdf.

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IEA. All rights reserved.

A key objective of the NOME Law was to foster competition at the retail level. Considerable
progress has been made in this area (see also Chapter 7). However, the ARENH
mechanism quickly showed its limits. It was conceived as a compromise between a desire
for price stability and the fostering of competition, while obliging EDF to sell the remainderof its production on the competitive wholesale market. As wholesale electricity prices fell
below EUR 42/MWh, primarily due to an influx of large amounts of wind and solar PV at
the European level and low CO2 prices in the EU Emissions Trading System (ETS), EDF’s

8. NUCLEAR

competitors no longer felt obliged to buy electricity under the ARENH. Additional factors in
the collapse of wholesale market prices were capacity investments made on overly
optimistic assumptions about the evolution of electricity demand as well as the collapse of
the prices for CO2 emissions allowances in the EU ETS in the aftermath of the 2008
financial and economic crisis. Amid rising competition and the number of alternative
suppliers, many returned to EDF as prices rose again above EUR 42/MWh later in thedecade, some expressing the wish to go beyond the originally set quantitative limit of
100 TWh. In fact, the ARENH has been a source of recurrent misgivings for both the seller
and buyers.
The ARENH agreement was always conceived as transitional and is slated to elapse
in 2025. The mechanism is currently being renegotiated between the French government
and the European Commission. Its objective remains the same: finding a compromise
between competition in the wholesale and retail markets on the one hand and a level ofrevenue certainty for nuclear electricity on the other. In addition to a revision of the level ofthe reference price itself, alternative market designs, such as a contract for difference witha fixed strike price, are under consideration.
However, the current renegotiation of the ARENH is part of a wider set of considerations
that underline the special status of nuclear energy at the heart of the French energy
system. The ARENH or any successor arrangement only concerns electricity from existing
nuclear power plants with “historic” costs. New nuclear power plants built after thecommissioning of the Flamanville EPR would require their own, possibly not altogether
different, pricing arrangements, including a contract for difference. The French Treasury is
also considering including the construction costs of new plants into a regulated asset base.
This financing model, which is also under discussion for new nuclear reactors and otherinfrastructure projects in the United Kingdom, allows including construction costs into
regulated consumer tariffs before operations at the facility actually begin, thus socialising
construction risks and lowering the cost of capital for the project owner.

EU sustainable finance rules also impact the financing of new nuclear in the EU. The
Sustainable Finance Taxonomy (Taxonomy Regulation) was formally adopted by theEuropean Parliament on 18 June 2020. It stipulates requirements for projects to qualify asenvironmentally sustainable economic activities. The taxonomy creates a classification
system designed to foster six EU environmental objectives, of which climate change
mitigation has received particular attention. Screening criteria to assess the environmental
sustainability of different activities were developed with the help of a Technical Expert
Group on sustainable finance. In the energy field, the inclusion of both nuclear energy and
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Moreover, future pricing arrangements are likely to go hand-in-hand with a major
restructuring of EDF. While the government has indicated its broad priorities for thecompany, like maintaining an integrated group, safeguarding employment and protecting
residential consumer through regulated tariffs, there are currently few certainties and evenfewer details. One scenario under the restructuring plan called Grand EDF (previously
called Projet Hercule) considers the creation of two distinct operational entities. The first
entity, EDF bleu, would regroup dispatchable low-carbon assets, i.e. nuclear, hydroelectric
power plants and gas-fired power plants, as well as the transmission system operator RTE.
It would also retain majority ownership in the second entity, EDF vert, which would regroup
renewables, Enedis, the electricity distributor and energy services. The second entity
would be considered an independently operating subsidiary with its capital open to outside
investors.

natural gas were intensely discussed. In 2020, the Technical Expert Group signalled thatit lacked the technical expertise to reach a conclusion on the applicability of the do no
significant harm (DNSH) criterion to nuclear energy. The European Commission requested
a report on the issue from its “science and knowledge service”, the Joint Research Centre.
In April 2021, the Joint Research Centre concluded that nuclear energy complied indeed
with the DNSH criteria. Following the publication of the Joint Research Centre’s report, theEuropean Commission asked for the opinions of two expert bodies (the Group of Expertson Radiation Protection and Waste Management under Article 31 of the Euratom Treaty
and the Scientific Committee on Health, Environmental and Emerging Risks), which
agreed with most of the Joint Research Centre’s findings. The European Commission had
previously committed, as soon as this dedicated process was complete, to follow up in
2022 based on its results in the context of this Taxonomy Regulation.

The nuclear fuel cycle, research and development

ENERGY SECURITY

8. NUCLEAR

France’s nuclear industry is active in all segments of the nuclear fuel cycle. EDF sources
its nuclear fuel primarily from Orano. Orano’s creation in 2018 resulted from therestructuring of the AREVA group. The restructuring was a complex process during which
the French state invested EUR 12 bln in its nuclear industry. This included also
recapitalising EDF. A key result is that Orano focuses exclusively on the nuclear fuel cycleand operates international mining assets, conversion, enrichment and reprocessing
facilities in France. France’s current fuel cycle strategy is set to remain in place until 2040,
when new investments will be required, in particular for reprocessing at La Hague.
Figure 8.4 Key actors in the French nuclear sector

Notes: EPC = Engineering, procurement and construction

A second key element of the restructuring process was the creation of reactor developer
Framatome, active in reactor core design and fuel fabrication. It regroups, inter alia, the157

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Source: Ministry of the Ecological Transition.

8. NUCLEAR

previous activities of both AREVA and EDF in these areas. EDF owns 75.5% ofFramatome with Mitsubishi Heavy Industries (19.5%) with the engineering company
Assystem (5%) holding the balance.
The French government terminated the Astrid sodium fast reactor programme, but
continues to pursue research and development efforts in this area, keeping the option
open for the second half of the century. France has also initiated a research anddevelopment programme on the multi-recycling of MOX fuels in pressurised water reactors.
MOX fuel is currently used in the older generation 900 MW reactors. However, at least
some of these are likely to be included among the reactors slated for closure in the coming
years. To compensate for the loss of load at La Hague after the end of Astrid, MOX fuelwill be used in some of the newer 1 300 MW reactors from 2028 onward, which requires
the completion of the requisite regulatory and administrative procedures.
At the backend of the nuclear fuel cycle, France is actively developing the Cigéo deep
geological repository for high-level wastes from the treatment of spent nuclear fuel andintermediate-level long-lived radioactive wastes (ILLW). Together with Finland andSweden, this makes France a global leader in implementing a definite solution for the
long-term storage and disposal of its spent nuclear fuel high-level nuclear wastes. Surface
facilities for intermediate-level short-lived waste and very low-level waste fromdecommissioning are operational, but may require additional capacity in due time.
Overseen by Andra, the National Agency for Radioactive Waste Management, the Cigéo
facility in the Meuse Department in eastern France will offer disposal facilities at a depthof 500 metres for 85 000 tonnes of high-level nuclear wastes. Its total undiscounted costs
over 120 years are estimated to be EUR 25 billion and are fully provisioned by the
producers of high-level wastes and ILLW, EDF, Orano, and the Alternative Energies andAtomic Energy Commission (CEA). At the time of writing, the detailed design study as wellas the environmental and socio-economic impact assessments were completed, while theassessment of the safety case was ongoing. The Declaration of Public Utility, required by
French law for large infrastructure projects, was submitted in August 2020, and theapplication for a construction licence is expected for the end of 2021 or the beginning of
2022.
France enjoys a well-developed infrastructure for a broad range of basic and appliedresearch both in universities and in a number of national research facilities. Nuclear
energy-related research is primarily regrouped in the CEA. With an annual budget in thefield of nuclear energy of EUR 460 million, the CEA engages in research on a broad rangeof reactor types as well as on different stages of the fuel cycle and materials’ performance.
Among different reactor types, the CEA works on Generations II, III and IV (including fast
breeder reactors), as well as small modular reactors. In addition, the 100 MW
Jules Horowitz research reactor is under construction in Cadarache, in southern France.
It will be used primarily for radioisotope production and research on material irradiation.
Finally, the CEA also maintains active programmes on energy storage, virtualisation,
nuclear fusion and the socio-economic analysis of low-carbon energy systems.

The role of nuclear energy is part and parcel of France’s energy transition. Today, nuclear
energy from 56 reactors with together 63 GW ensures around 70% of the French
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Assessment

low-carbon electricity supply. With around 400 TWh, France comes second to theUnited States in terms of electricity generation from nuclear. Thanks to the role of nuclear
energy, France has the lowest emissions per kilowatt hour (kWh) of any large economy,
with 47 g/kWh. France’s low emissions intensity also means that electrification (electricvehicles, heat pumps) will have greater emissions benefits.
A decarbonised electricity sector is essential for achieving climate neutrality by 2050,
notably to help hard-to-decarbonise sectors such as heavy industry, transport or housing
to reduce their emissions through electrification and sector coupling as well as hydrogen.
Going forward, nuclear energy is a key element for achieving net zero carbon emissions
in France’s energy sector by 2050 and consensus is emerging of the importance of bothrenewable and nuclear energy.
This is also in line with the findings of the IEA’s net zero by 2050 roadmap for the global
energy transition. Wind and solar will play the biggest roles, but nuclear power doubles to2050 in the IEA’s net zero roadmap (IEA, 2021). While wind and solar increases 20-foldby 2050 in the net zero emissions scenario, nuclear power also makes a significant
contribution: its output rises steadily by 40% to 2030 and doubles by 2050. To achieve thisdoubling, global nuclear capacity additions need to reach 30 GW per year in the early2030s, five times the rate of the past decade.

ENERGY SECURITY

8. NUCLEAR

Under the French 2019 Energy and Climate Law, the government targets a reduced
nuclear share of 50% by 2035, with renewables making up the difference. In addition to
the two already closed reactors at Fessenheim, EDF will have to shut down 12 othernuclear reactors to reach the 50% objective. A schedule of reactor closures has been
defined. The PPE is clear on the criteria to be respected for reducing the share of nuclear
power to 50%, requiring no increase in CO2 emissions and no increased risk for the
security of supply (based on actual criteria). Progress of reaching the 50% objective also
depends on the construction and connection of France’s offshore wind parks, theevaluation of affordability and energy prices, and the evolution of electricity trade withneighbouring countries (Belgium, Germany, Italy, Switzerland and United Kingdom).

France’s nuclear fleet is ageing, with an average age of 35 years. Maintaining thecontribution of nuclear energy at 50% thus requires either the long-term operation ofexisting reactors, the construction of new ones or a combination of both. As far as
long-term operations are concerned, EDF is engaged in a EUR 49.4 billion programme ofrefurbishing its nuclear reactor fleet for operations beyond 40 years (the so-called Grandcarénage). In 2020, a 900 MW reactor achieved its fourth periodic safety review for the
first time. From 2025 onwards, the 20 1 300 MW reactors will undergo the same periodic
safety review. Each one will undergo a safety review, which also entails a period of
maintenance and safety upgrades for the concerned reactors. The Nuclear Safety
Authority also requires annual reports from EDF to confirm its industrial capacity to operate
the long-term operations programme.
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Under the PPE, there is little visibility as to the future role of nuclear beyond 2035, as the
PPE requires a full assessment of a nuclear work programme, which is ongoing at the timeof writing. The IEA recommends a socio-economic assessment of the long-term electricity
and energy mix and its costs under different scenarios. Such an assessment should be
the basis for a timely and well-founded decision on this matter. RTE has been tasked by
the government to study different scenarios for 2050 and is currently finalising its reportfor publication.

8. NUCLEAR

With regard to new build, EDF proposes the construction of six new EPR2 reactors. The
EPR2 builds on the EPR design of which two reactors are already operating in China andfour more are under construction in France, Finland and the United Kingdom. A major
nuclear new build programme would also maintain advanced technical capabilities in anindustry with export potential. A decision is expected in 2023, after the commissioning of
the Flamanville EPR, so after the 2022 French presidential elections.
The financing of EDFs long-term operations programme and/or new builds remains themain challenge for nuclear in France and may require changes to the French regulatory
framework. France has a specific market design due to the historic position of EDF as
owner and operator of the French nuclear fleet. A 2010 agreement between the Frenchgovernment and the European Commission specified that each year EDF would offer up
to 100 TWh, roughly one-quarter of its production, to alternative energy suppliers, at a
fixed price of EUR 42/MWh under the ARENH. The 2019 Energy and Climate Law allows,in principle, the government to increase the threshold to 150 TWh. However, this would
require approval by the European Commission, so decisions on the amount of TWh andthe level of the fixed price will not take place before current negotiations about a successor
mechanism to the ARENH, which had always been conceived as a transitional mechanism
to end in 2025, have been concluded.
The current design of the ARENH has reached its limits. As European wholesale prices
fell below EUR 42/MWh, EDF’s competitors no longer felt obliged to buy electricity underthe ARENH. This reduced its role to boost competition and provide EDF with revenues tofinance its long-term operations programme. As prices rose again later in the decade,EDF’s competitors requested capacity even beyond the originally set 100 TWh per year
limit. Current high-carbon and electricity prices provide also a whole new set ofcircumstances for assessing the effectiveness of the ARENH.
The financing of a nuclear programme and the long-term operations is a major challenge.
The ARENH or any successor arrangement only concerns electricity from existing nuclear
power plants with “historic” costs. New nuclear power plants would require their own,
possibly not altogether different, pricing arrangements. A contract for difference with afixed strike price is one option, as is the use of regulated prices based on an asset-based
regulation. Moreover, any future pricing arrangements might need to take into account amajor restructuring of EDF under the Grand EDF initiative (formerly Projet Hercule), which
is on hold until after the 2022 presidential elections) and will have an impact on the overall
structure of the French electricity sector.

France’s nuclear industry has undergone a major restructuring. Uranium and nuclear fuelare produced by Orano, which operates conversion, enrichment and reprocessing
facilities. Its creation in 2018 resulted from the restructuring of the AREVA group during
which the French state invested EUR 12 bln in its nuclear industry. This also included the160

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Investment in the French nuclear energy industry will depend on a complex interplay ofnational initiatives, European rules on state aid, and sustainable finance and negotiatedcompromises. The new EU taxonomy for sustainable finance aims at guiding public andprivate financial flows in energy transitions towards low-carbon technologies. While there
has been an intense debate over nuclear energy under the DNSH provision of theTaxonomy Regulation, a recent report by the European Commission’s Joint ResearchCentre concluded that nuclear energy, notably radioactive waste management, fully
satisfied the DNSH criterion.

creation of the reactor developer Framatome, three-quarters of which are owned by EDF,
with Mitsubishi Heavy Industries and the engineering company Assystem as minority
shareholders. Nuclear energy-related research is primarily regrouped in the Alternative
Energies and Atomic Energy Commission. Since the last review, the French government
terminated the Astrid (Advanced Sodium Technological Reactor for Industrial
Demonstration) programme. Astrid was a proposal for a 600 MW sodium-cooled fast
breeder reactor (Generation IV) by the Alternative Energies and Atomic Energy
Commission.
With a large and ageing nuclear fleet, decommissioning and nuclear waste management
are priorities for France. Alongside Finland and Sweden, France is a global leader in
implementing a definite solution for the long-term storage of its nuclear wastes. Overseen
by Andra, Cigéo is a deep geological repository for high-level wastes from the treatmentof spent nuclear fuel and intermediate-level long-lived radioactive wastes. The application
for a construction licence is expected for the end of 2021 or the beginning of 2022. The
government should complete the implementation of a long-term solution for the storage of
nuclear wastes. The costs of the Cigéo underground storage facility and its important rolein the nuclear fuel cycle should continue to be communicated in a transparent manner.

ENERGY SECURITY

8. NUCLEAR

Recommendations
The government of France should: Clarify and review conditions of the legislative requirement to limit the contribution of
nuclear energy to 50% of electricity generation up to 2035, in light of the objectives ofclimate urgency, climate neutrality, affordability and renewable energy deployment.
 Take a timely decision on the role of nuclear beyond 2035, based on the completionof ongoing studies and necessary socio-economic analysis and consultations to
decide on the combination of long-term operations and nuclear new build required,with a view of decarbonising electricity supply and to achieve net zero by 2050.
 Ensure the sustainable long-term funding of nuclear energy generation, while
preserving a competitive electricity market, including the refurbishment and safety
upgrades of existing reactors and the financing of new builds from 2023 onwards.

2

Co-generation refers to the combined production of heat and power.

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 Strengthen the nuclear energy research most relevant to the energy transition,
including the provision of flexible electricity by small modular reactors, co-generation 2of electricity and heat, integration with hydrogen production, and materials’ testingunder conditions of long-term operations.

8. NUCLEAR

References
Folz, J.-M. (2019), The Construction of the Flamanville EPR, Ministry for the Economy,
Finance and the Recovery, Paris, www.economie.gouv.fr/rapport-epr-flamanville#.
Fresard, J. (2021), Flamanville EPR: The Nuclear Safety Authority evokes new problems
that could further slow down the site, Public Sénat,www.publicsenat.fr/article/parlementaire/epr-de-flamanville-le-president-de-l-asn-evoquede-nouvelles-malformations-sur.
IAEA (International Atomic Energy Agency) (2021), France, Power Reactor Information
System, https://pris.iaea.org/PRIS/CountryStatistics/CountryDetails.aspx?current=FR.
IEA (International Energy Agency) (2021a), World energy balances, IEA World Energy
Statistics and Balances (database), accessed on 10 September 2020
www.iea.org/statistics.
IEA (2021b), Net Zero by 2050: A Roadmap for the Global Energy Sector,
www.iea.org/reports/net-zero-by-2050.
IEA/NEA (2020), Projected Costs of Generating Electricity 2020,
www.iea.org/reports/projected-costs-of-generating-electricity-2020.
NEA (Nuclear Energy Agency) (2020), Unlocking Reductions in the Construction Costs of
Nuclear: A Practical Guide for Stakeholders, www.oecd-nea.org/jcms/pl_30653/unlockingreductions-in-the-construction-costs-of-nuclear?details=true.

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RTE (2021), Futurs Energétiques 2050, https://assets.rte-france.com/prod/public/202110/Futurs-Energetiques-2050-principaux-resultats_0.pd

Key data (2020 estimated)
Domestic natural gas production: 0.01 bcm (compared to 0.76 bcm in 2009)
Net imports (2019): 44.2 bcm (52.4 bcm imports, 8.2 bcm exports)
Share of gas: 0% of domestic energy production, 16% of total energy supply (TES), 7% ofelectricity generation, 20% of total final consumption (TFC) (2019)

ENERGY SECURITY

9. Natural gas

Gas consumption by sector (2019): 42.4 bcm in 2019, -6% since 2009
Industry 31%, residential 30%, electricity and heat generation 19%, services and others 17%,other energy 1.5%, transport 0.4%

Overview
France’s National Low-Carbon Strategy (Stratégie Nationale Bas-Carbone, SNBC) andthe multiannual energy plan (PPE) have very ambitious targets to reduce the country’s useof fossil fuels by 40% in 2030 compared to 2012 levels. To achieve those targets, natural
gas consumption is set to decline by 25% from current levels by 2030.
Figure 9.1 Share of natural gas in France’s energy system, 2000-20
Share of natural gas
20%

2000
2005
2010
2015
2020

15%
10%
5%
0%

Domestic energy production

Total energy supply

Electricity generation

Total final consumption
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Natural gas accounts for a stable share of 20% of France’s consumption, but almost no natural
gas is produced in France.
Note: The latest available data for total final consumption are from 2019.

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9. NATURAL GAS

Natural gas accounted for 20% of total energy supply (TES) in 2019 (Figure 9.1) and its
role has remained stable in total final consumption (TFC) over two decades. While natural
gas contributed 4% of electricity generation in 2010, today it is 7%. With 0.1 billion cubic
metres (bcm) of biogas produced in France in 2019, renewable gases represent a growing
market (see Chapter 5).

SupplyIn 2019, France net imports of natural gas totalled 44.2 bcm (Figure 9.2), which were
supplied mostly from Norway (19.8 bcm), the Russian Federation (10.6 bcm), theNetherlands (4.6 bcm) and Nigeria (4.5 bcm). During the past decade, net gas imports
have remained stable, with only a marginal decrease in 2014 to 38.4 bcm. Liquefied naturalgas (LNG) imports doubled between 2018 and 2019, reaching 19.7 bcm, and met 45% ofnational gas demand. At the same time, the share of pipeline imports decreased to 55%.
By comparison, in 2014, 85% of imports came via pipelines and 15% by LNG. In 2019,
France exported 0.4 bcm to Italy and 7.8 bcm to Switzerland.
In 2019, 10% of France’s natural gas market was supplied by low-calorific gas (L-gas)originating from the Netherlands. However, the Dutch government has decided to end
production from the Groningen field in 2022, three years ahead of schedule. It will respect
its existing contracts with France that will expire at the latest by 2029. The French network
operator GRTgaz is implementing an ambitious transition plan for the conversion of all
affected customers in the northern part of the country to H-gas by end of 2028.

Net imports

Figure 9.2 France’s natural gas net imports by country, 2000-19
50

bcm

Other
Algeria

40

Nigeria30

Netherlands

20

RussianFederation
NorwayNet exports

10

Switzerland

0-10

Total net
imports
2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

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France has diversified sources of natural gas imports and has increased its exports in recent
years, mainly to Switzerland.
Notes: bcm = billion cubic metres. Natural gas exports to Italy are not visible at this scale.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

The only remaining natural gas production in France is a coal-bed methane extraction in
the northern part of France, with 77 million cubic metres (mcm) of production per year. The
production of 34 mcm is injected into the network; the rest is used to produce electricity
locally. Under the Hydrocarbons Law of 2017, no exploration and production will bepermitted beyond 2040 and no new production permits have been issued since the law
entered into force. With this, France has become one of the first countries to completely
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Domestic gas production

ban gas and oil exploration on the national territory, although it is mainly a symbolicmeasure, as proven and recoverable deposits in mainland France are almost inexistent.

DemandNatural gas consumption in France has decreased by 6% over the last decade, from45.3 bcm in 2009 to 42.4 bcm in 2019 (Figure 9.3). In 2019, consumption in the industry
sector represented 31% (13.2 bcm), followed by the residential sector at 30% (12.8 bcm),
electricity and heat generation at 19% (8 bcm), services and others at 17% (7.0 bcm),
other energy at 1.5% (0.6 bcm), and transport at 0.4% (0.2 bcm). Consumption of natural
gas in the residential sector has decreased by 22% over the last decade, but remains
highly sensitive to temperature variations.
Figure 9.3 France’s natural gas demand by sector, 2000-19

ENERGY SECURITY

9. NATURAL GAS

Overall, France’s share of natural gas consumption in industry, services, and electricity andheat generation has remained constant since the IEA’s last review.
* Other energy includes oil and gas extraction and other energy sector use.
** Services/other includes commercial and public services, agriculture/forestry, and fishing.
*** Transport gas demand is barely visible at this scale, which increased from 0.1 bcm in 2011 to 0.2 bcm in 2018.
**** Industry includes non-energy use, and energy demand from petroleum refineries.
Note: bcm = billion cubic metres.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

The French gas sector remains the third-largest gas market in the EU, after Germany
and Italy. However, natural gas represents a slightly smaller share of total primary energy
consumption in France than the EU average (22%). The country’s population density islower than the EU average and development of the gas network more costly. The large
nuclear fleet provides for the easy-to-use alternative of electric heating, which isdominant in France. As a result, natural gas networks are only available in 30% of French
cities (although 80% of the French population lives in a district with access to natural gas
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An increase of gas demand was observed from 2015 to 2017, notably in power generation.
However, since 2017, this trend has reversed, and gas consumption has decreased due
to mild temperatures and stronger reliance on nuclear and hydropower. In total,
11.4 million customers are using natural gas in France (94% are households, which
consume 25% of gas volumes in the country, while the remaining 75% is consumed by
non-households ([industry, the tertiary sector, power stations], representing 6% ofcustomers).

9. NATURAL GAS

and all but one of France’s mainland’s departments are connected to the gas grid). There
are no plans to expand the gas network.
During the first half of 2020, natural gas consumption in France declined due to the fall in
economic activity and lockdowns in response to the COVID-19 pandemic. Domestic gas
demand decreased by 11% in March and by 35% in April 2020 (compared to the samemonths in 2019). Industrial gas demand fell by 68% in March 2020 alone.

BiogasThe government’s plan to move away from fossil fuels includes a multi-fold increase inbiogas production, while decreasing overall gas consumption. France has a strong
potential for biogas production, notably based on agricultural waste. For several years, thegovernment has actively supported the growth of biogas and biomethane in France. The
market mechanisms and the various subsidies offered made it possible to reduce the highcosts of production. With a new PPE adopted in 2020, the government revised downwards
certain assumptions for the biogas market, which certain market players were disappointed
to see: some were expecting a 30% biogas target, whereas the government’s 2030 target
was set at 7% (up to 10% if further production cost reductions are possible).
This would mean a volume of up to 3.1 bcm of biomethane in the system in 2030, a 30-foldincrease from the 108 mcm produced in 2019. The interim plan included in the PPE calls
for biogas production to rise to 1.2 bcm as early as in 2023 (of which almost half would be
injected into the network), and further strong growth to the target of 2030 (2 bcm injectedof the 3.1 bcm produced). Currently, there are around 1 000 of small-scale biogas plants
at different stages of development across France (in comparison to around 900 already inoperation), with a total maximum potential production capacity of 2.1 bcm per year.

For biomethane injected into natural gas networks, with a duration of the purchaseobligation of 15 years. At the end of 2019, the purchase tariff stood between EUR 45 per
megawatt hour (MWh) and EUR 139/MWh, depending on the size of the plant. A bonus
can be added depending on the type of feedstock used. However, the new PPE plans fora gradual reduction of these tariffs by 2% per year. The target prices of EUR 75/MWh in
2023 and EUR 60/MWh in 2028 are forecasted for the new tender scheme for medium andlarge biomethane plants.

For electricity produced from biogas, with a duration of the purchase obligation of 20 years.
However, when the biogas plants exceed a capacity of 500 kilowatts (kW), they must
participate in a formal bidding process. The purchase price mechanism has caused astrong growth in co-generation in agricultural areas, resulting in 80% of the produced
biogas directly burnt for power generation and the remaining share injected into the grid.

A new tender scheme for medium and large biomethane plants will have two calls fortenders each year, for an annual production objective of 350 gigawatt hours (GWh) per

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The government supports biogas production through various instruments, with fixedpurchase tariffs being the pillar of support for the industry. This mechanism gives
producers the certainty of selling biogas and biomethane to selected suppliers at apreviously fixed price and for a fixed term. These purchase tariffs, determined by thegovernment, depend on several factors, such as the form of valorisation used, the size ofthe production unit and the nature of the feedstocks. There are two types of fixed purchasetariffs:

year each. This is a good step forward; however, policy and support instruments should
be constantly monitored to allow for timely adjustments to achieve the ambitious biogas
production goals in France.
The government has not yet presented concrete plans for future use of the existing natural
gas infrastructure, some of which may turn into stranded assets if demand declines as
projected. Concerns about regulated stranded assets are mitigated by companies with theintroduction of accelerated depreciation process. This, however, cannot address the
problem in full. A significant part of the existing natural gas infrastructure will be used forbiogas transportation and storage. Since 2018, the cost of gas network adaptation forbiogas injection has no longer been solely borne by biogas producers, but is instead
shared between all gas network users. The challenges are nevertheless complex:
biomethane plants inject their volumes into the closest low-pressure gas network, whichmakes long-distance transmission impossible. Network meshing and reverse flow
compressors may be necessary to achieve the ambitious goals for biogas production in
France.

ENERGY SECURITY

9. NATURAL GAS

HydrogenAs part of France’s Recovery Plan from the COVID-19 pandemic, the government
presented a national hydrogen strategy in September 2020. It provides for an investment
of EUR 7.2 billion by 2030 and a hydrogen production capacity of 6.5 GW, with the creationof up to 150 000 jobs. The strategy plans to bring savings of 6 million tonnes of CO2 peryear by 2030, the equivalent of the annual emissions of the city of Paris. A national
Hydrogen Council presented initial plans for 3.2 GW of large-scale electrolysis capacity to
key ministers in late February 2021. The projects, which require some EUR 8 billion of
investment, could begin to benefit from funding under the EU’s Important Projects ofCommon European Interest programme by the end of 2021. Based on efficiency
considerations, the plan mainly focuses on the direct use of low-carbon hydrogen,including from electrolysers using nuclear power and renewables.

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The government does not foresee linking up local clusters by dedicated hydrogentransmission pipelines, although this option is clearly preferred by the relevant private
stakeholders that will build and operate the hydrogen pipelines. As the plans for developing
a pan-European hydrogen network are rapidly materialising, France risks missing out onthese opportunities, as other countries are quickly moving forward. The government
should enable these industrial opportunities with a cost-effective transition of the EU gas
infrastructure, to decarbonise existing hydrogen production in industry. However, a clear
vision on the future regulatory framework for hydrogen to accompany these investments,(i.e. determining objectives on decarbonisation, roles and responsibilities) is not yet inplace. The recent announcement of Total and Engie to design and build the Masshylia
project, France’s largest renewable hydrogen production site at Total’s La Mède facility(operating as a biorefinery), is a promising step forward. The installation of a 40 MW
electrolyser, powered by solar PV of over 100 MW, will produce 5 tonnes of greenhydrogen per day to meet the needs of the biorefinery processing, and will avoid 15 000
tonnes of CO2 emissions per year. Air Liquide and Siemens Energy have also announced
a funding application for a 200 MW electrolyser at the Port-Jérôme-sur-Seine chemical
facility.

9. NATURAL GAS

Gas market structure
Wholesale and retail supply
More than 180 natural gas suppliers are authorised to deliver gas in France, and among
them around 30 are registered as foreign companies. Around 100 traders have received
similar authorisation from the Ministry of the Ecological Transition (MTE) to operate on thegas market in France. The list of all suppliers is available on the MTE’s website. 1 Major
players in the gas wholesale market include Mercuria Energy Trading SA, Eni, EDF, Shell
Energy Europe Limited, and Total E&P.
In 2020, the major players in the gas retail market were Engie (23.6% public ownership),
EDF (83.7% public ownership), Eni Spa and Total. Since the reform of regulated tariffs
commenced in 2014, alternative suppliers have more than doubled the number of theirresidential consumers (a 16.7% market share at the end of 2014 versus a 35% market
share in June 2020). The market share of alternative suppliers for non-residential
customers has risen by more than 50% (from 30.6% in 2015 to 46.6% in June 2020). The
market share in volume is higher; alternative suppliers accounted for almost 66% of
non-residential and 33% of residential supplies. The switching rate has increased
significantly (about 5% by the end of 2019, against 2% in 2014). However, this rate
dropped below 3% in 2020, in the context of the COVID-19 pandemic.

Networks and tariffs
The natural gas transmission network is operated by two transmission system operators(TSOs): GRTgaz and Teréga.
GRTgaz (a 75% subsidiary of Engie, and 25% of the Société d’Infrastructures Gazières),operates 8 110 km of the main network and 24 043 km of the regional networks (together
around 87% of the gas transmission network in France). In 2021, Engie agreed to sell an
11.5% stake in GRTgaz.
Teréga, TotalEnergies’s former subsidiary TIGF (sold in 2013 to the SNAM-CIG-EDF
consortium) operates 650 km of the main network and 4 450 km of the regional networks
in the south-west of France. Teréga, with about 13% of the network, is the second gas
TSO. Teréga also operates gas storage facilities.
The networks of the two operators are interconnected in Castillon-la-Bataille (Dordogne)
and Cruzy (Herault). The length of the networks in France totals 195 000 km, thesecond-longest gas distribution network in Europe after Germany.

www.ecologie.gouv.fr/sites/default/files/Liste%20des%20founitsseurs%20autoris%C3%A9s%20%20mai%202018.pdf.
1

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Distribution networks are owned by local authorities and are managed through aconcession-based system whereby concession agreements govern the relationshipbetween local authorities and GRDF (Gaz réseau distribution France, a subsidiary of Engie

which operates 95% of the distribution grids in France), or 22 local distribution companies,
which cover the remaining 5% of the market and offer their own regulated tariffs.

Transmission tariffs
The latest tariffs for use of the networks entered into force on 1 April 2020 for the period
2020-24. According to Article L452-1 of the Energy Code, the tariffs for using thetransmission networks, commercial terms of use and rates for additional services
performed by TSOs are established in a transparent and non-discriminatory manner by
the Energy Regulatory Commission (CRE). Upon a proposal by the operators, the CRE
sets tariffs, taking into account the energy policy guidelines set by the Ministry for the
Economy, Finance and the Recovery and the MTE.

Retail gas prices and taxes
The natural gas price for industry in France ranked sixth-highest among IEA member
countries in 2020 at USD 37.8/MWh, with a tax rate of 17% (Figure 9.4), while the pricefor households ranked ninth-highest at USD 87.9/MWh, with a tax rate of 28%.

ENERGY SECURITY

9. NATURAL GAS

Figure 9.4 Industry and household natural gas prices in IEA countries, 2020
USD/MWh
70
60
50
40
30
20
10
0

Tax component

IEA. All rights reserved.

USD/MWhTax component

140
120
100
80
60
40
20
0

IEA. All rights reserved.

France’s industry and household natural gas prices are above IEA average: they are thesixth-highest for industry and the ninth-highest for households* Tax information for industry and household prices are not available for the United States exclusively
Notes: MWh = megawatt hour. Industry price data are not available for Australia, Finland, Greece, Mexico or Norway.
Household price data are not available for Australia, Finland, Greece, Mexico or Norway.

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Source: IEA (2021b), Energy Prices and Taxes 2020 (database), www.iea.org/statistics.

9. NATURAL GAS

Natural gas prices in France followed similar trends as its neighbouring countries ofGermany, Italy, Spain and the United Kingdom over the period 2000-20. Since 2014,
France has had the highest natural gas industry price, surpassing that of Italy (Figure 9.5).
Figure 9.5 Natural gas prices in France and selected IEA countries, 2000-20
Industry
70

Household

USD/MWh

140

60

USD/MWh

120

50

100

40

80

30

60

20

40

10

20

0

0
FranceGermany

Italy

Spain

United Kingdom

IEA. All rights reserved.

France’s natural gas prices follow similar trends as its neighbouring countries, with France
seeing some of the highest gas prices for industry in Europe.
Notes: MWh = megawatt hour. Industry data are unavailable for Germany (2001) and Italy (2000-2003). Household
data are unavailable for Germany (2001) and Italy (2000-03).
Source: IEA (2021b), Energy Prices and Taxes 2020 (database), www.iea.org/statistics.

Gas policy and market regulations
The Energy and Climate Law of 2019 targets a 40% reduction of fossil fuel consumption
by 2030 (from 2012 levels). Under the PPE, France targets a reduction of natural gas
consumption to 31 bcm by 2030 (down by 19% from 2012 levels, but a 25% reduction from2019 levels). France expects to see a sharp decline in natural gas demand as it pursues
stronger energy efficiency measures, mostly in the residential sector (less gas-basedheating, in particular), 2 as well as in the tertiary sector. The economic situation and thecompetitiveness of natural gas compared to other fuels will, however, determine the useof gas in non-household sectors, which consume 75% of natural gas in the country.
Major changes in natural gas policy have been introduced since the IEA’s last in-depth
review in 2016, including
a phase-out of regulated tariffs for industrial customers was completed by the end of 2020a single gas-trading zone, TRF Trading Region France, was introduced on 1 November
2018

In 2017, fossil fuels provided 43% of the energy distributed by France’s 761 heating and cooling networks, with 37%
natural gas, 5% coal and 1% fuel oil. According to the Environmental Regulations 2020, as of July 2021, newly built
homes will not be allowed to use natural gas as a heating source in favour of greener options.
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




the Law on Hydrocarbons of 2017 bans oil/gas production in France (amending also theEnergy Code and introducing important changes to the natural gas market). 3

Retail market reforms – the end of regulated gas tariffs
The phase-out of regulated tariffs brought major changes to the retail market. Since
1 December 2020, commercial customers are no longer eligible for regulated tariffs. For
residential consumers, the regulated tariffs will end on 30 June 2023. In June 2020,
3.7 million out of 11.4 million customers still purchased gas under regulated tariffs.
Incumbent suppliers control over 50% of the residential market, although alternative
suppliers have doubled their market share since 2015. The Law on Energy and Climate of2019 ensured that customers benefiting from regulated tariffs have full access to
information on possible market options and obliges incumbent suppliers to remain neutral
with respect to customer queries about possible contract changes. Alternative suppliers
have also been given access to contact data of customers under regulated tariffs to beable to present them market offers, in compliance with the EU General Data Protection
Regulation. Customers can contract “market offers” and can switch suppliers to get otherprices; some of these offers are up to 10% cheaper than regulated tariffs. France has set
up an independent and free gas and electricity price comparison tool (www.energie-info.fr),
which is handled and updated regularly by the energy ombudsman. 4

ENERGY SECURITY

9. NATURAL GASRegulated gas tariffs in France are set by the MTE and the Ministry for the Economy,
Finance and the Recovery, following the opinion of the CRE. Each year by the beginningof July, a ministerial tariff order together with calculation formula is published. This orderreflects both changes in supply and non-supply costs. The application of this formula tovariations in gas prices on European markets leads to monthly changes in regulated
natural gas tariffs. It also reflects variations in Engie’s natural gas supply conditions. An
increase in the purchase price from international producers has a direct impact on theregulated price of gas in France. Regulated prices also depend on the tariff zone in which
the household is located, and the purposes of gas use of the household (cooking, heating).
After rising by +0.2% in January 2021, the gas tariff for households increased again in
February by 3.5%. The latest yearly ministerial tariff order was approved by the CRE on
25 June 2021 and stipulated a 10% tariff increase as of 1 July. 5 In the context of the gas
price hike in September 2021 in Europe and across the world, on 30 September, thegovernment announced a “tariff shield” and decided to freeze natural gas tariffs until April
2022, following the increase on 1 October 2021 announced by Engie (12.6%).

A single gas-trading zone

www.legifrance.gouv.fr/jorf/id/JORFTEXT000036339396.
www.energie-mediateur.fr.
5
www.cre.fr/Actualites/evolution-des-tarifs-reglementes-de-vente-de-gaz-d-engie-et-des-eld.
3
4

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Since the IEA’s last review, two gas network reinforcements, one in Val-de-Saône and one
in Gascogne-Midi, have been completed to allow for the merger of the previously separate
two French trading zones into one single trading area, the so-called TRF, or Trading
Region France. The objective of the market merger was set by the CRE in 2012, largely
to ease north-south gas network congestions. The project necessitated a cumulative

9. NATURAL GAS

investment of EUR 823 million from both TSOs, GRTgaz and TIGF (today’s Teréga). It
included doubling the length of the Val-de-Saône pipeline (188 km) and reinforcing the
Gascogne-Midi pipeline, as well as adapting numerous pump stations and compression
stations across the system. After two years of operations, the benefits of the merger arequite visible, both in terms of infrastructure operations (no congestion, liquid flows andcontinuity of network nominations) and customer service. Access of all French companies
and consumers to a single market price reduced the isolation of southern France andrelated lower dependency of that region on LNG supplies.

Natural gas infrastructure

France has seven interconnection points, with a total of 2 380 GWh/d import capacity(Table 9.1). Taisnières B is dedicated to importing low-calorific gas (L-gas) from theNetherlands through Belgium and is expected to deliver less and less volumes due to theclosure of the Groningen gas field in the Netherlands. Oltingue, Pirineos and Virtualys
have reversible capacity flows.

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Figure 9.6 Gas infrastructure in FranceIn the past France considered the construction of a new gas pipeline within France andbetween France and Spain (MidCat and South Transit East Pyrenees projects), but hasabandoned these plans in view of planned reductions of gas consumption in France andovercapacity of the grid. Neither project was included on the European Commission’s listof projects of common interest.
Table 9.1 Entry interconnection capacities of the French gas network (GWh/d)Interconnection

2019

Planned 2028

Utilisation rates 2019

Taisnières B

230

115

43%

Dunkerque

577

570

85%

Virtualys

630

630

55%

Obergailbach

618

618

24%

Pirineos

225

225

56%

Oltingue

100

100

75%

All interconnections

2 380

2 265

ENERGY SECURITY

9. NATURAL GAS

Note: GWh/d = gigawatt hour per day.
Source: Ministry of the Ecological Transition.

Table 9.2 Exit interconnection capacities of the French gas network (GWh/d)Interconnection

2019

Planned 2028

Utilisation rates 2019

Virtualys

270

270

5%

Oltingue

254

254

44%

Pireneos

170

170

58%

All interconnections

694

694

Note: GWh/d = gigawatt hour per day.
Source: Ministry of the Ecological Transition.

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France has four LNG terminals: two in Fos-sur-Mer, one in Montoir de Bretagne and one
in Dunkerque. Fos Tonkin and Montoir are owned by Elengy, a 100% subsidiary of Engie
created in early 2009. The Fos Cavaou terminal is owned by Fosmax LNG, a subsidiaryof Elengy (over 70%) and Total, and is operated by Elengy. The Dunkerque terminal ismajority owned by Fluxys with a minority share of Korean investors. The average utilisation
rate of the French LNG terminals was 41% in 2019. The Dunkerque and Montoir terminals
do not have plans for expansion over the next decade, while the terminals in Fos-sur-Mer
are studying an expansion to reach 500 GWh/d of capacity (from 410 GWh/d today). Threeout of four LNG terminals are functioning on the basis of full third-party access. The
Dunkerque LNG was granted a total exemption from regulated third-party access and tariff
regulation for a period of 20 years, hence the rules and the terminal access prices are set
by the terminal operator (Fluxys).

9. NATURAL GAS

Table 9.3 Liquefied natural gas terminals in France, 2020
LNG terminal Year of construction

Storage capacity (m3)

Ships allowed (m3)

Fos Tonkin1972

80 00075 000Fos Cavaou

2010

330 000

266 000

Montoir

1980

360 000

266 000

Dunkerque2016

570 000

266 000

1 340 000

TOTAL
Source: Ministry of the Ecological Transition.

Gas storage
Total gas storage capacity in France amounts to 12.2 bcm. There are two undergroundgas storage operators:

Storengy, a 100% subsidiary of Engie created in 2009, operates 13 sites in France (plus 6
in Germany and 1 in the United Kingdom), including 10 aquifers and 3 salt caverns,
representing a total volume of 9.3 bcm (76% of country’s capacity). Storengy also operates
salt caverns in Manosque owned by Geomethane.

Teréga, one of the country’s two TSOs, operates two sites in aquifers in the south-westpart of the country (in Izaute and Lussagnet), representing a total volume of 2.9 bcm (24%of total capacity).

Third-party access to gas storage capacities is ensured under the Energy Code. The Law
on Hydrocarbons (2017) introduced some modification to the gas storage system. Prior toits entry into force, gas suppliers had the legal obligation to build up gas stocks to apredetermined volume. Yet, this rule was contested because the price for storage, freely
set by gas storage operators, was considered too high. France launched a reform of thegas storage legal framework and issued a decree (on 31 July 2017) to specify theconditions when and how the legal obligation to build up gas stocks applies.

Each year, the government determines the minimum level of gas reserves necessary toensure the security of national supply. If, at the end of the auctions, the capacities acquiredby all suppliers prove to be insufficient to cover this minimum stock level, the government
can oblige gas suppliers to subscribe additional storage capacities. This mechanism,
called the “safety net”, encourages suppliers to participate in the auctions. However,
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The amended gas storage regulation entered into force in 2018. The first major change inthis gas storage reform is the end of a government-imposed storage obligation system for
suppliers. Now, suppliers themselves determine the level of stocks to be acquired to cover
their customers’ needs for the year. The other major change in this reform concerns thesale of storage capacity from essential storage facilities. This is now conducted throughannual auctions organised by operators, Storengy and Teréga, in which all suppliers canparticipate, whether established in France or in another country. The conditions for holding
these auctions (marketing schedule, reserve price, etc.) are set by the CRE. Storage
operators are granted a minimum revenue. If the auctions do not create enough revenues
to meet this minimum, the difference is levied on consumers through the transmission tariff.
If the auction revenues are higher than the set minimum, the surplus is handed back totransport network users by lowering the transmission tariff.

in 2020, tariffs covered 26-66% of the allowed revenues of the storage operators, which
seems to indicate a lack of incentives or regulatory flexibility to fully grasp market value of
this mechanism. In February 2020, the European Commission launched an investigation
as to whether there was sufficient justification for the method used to value the regulated
storage assets, and whether the new mechanism would have a negative impact oncompetition and trade between member states. On 28 June 2021, the Commission
concluded that the mechanism strengthens the security and diversification of the energy
supply without unduly distorting competition.6

Security of gas supply
French policies to enhance natural gas security of supply are based on two pillars:risk mitigation: planning of gas supply to meet expected demand and market regulation in
the form of public services obligations on all gas sector playersemergency response policies: an emergency action plan divided into three levels: early
warning, alert level and emergency level.

ENERGY SECURITY

9. NATURAL GAS

Risk mitigation
The PPE aims at forecasting the possible evolution of the energy system and at identifying
investments needed to ensure security of supply during the energy transition. The PPE
provides a list of the essential gas storage facilities (facilities whose operations have to be
maintained under all circumstances), which are needed for the efficient functioning of the
network and security of gas supply, mostly to deal with sudden cold spells and to help
manage flows in the gas network.

Public service obligations
To ensure the availability of sufficient gas supply and reduce the vulnerability of the gas
system in case of a crisis, public service obligations are assigned to the TSOs and DSOs,
operators of LNG terminals, underground storage operators, and gas suppliers. In
accordance with those provisions, the French gas system is designed to adequately
respond to a 3 consecutive days of cold spell that occurs with a probability of once every
50 years.
Suppliers must guarantee supply to their clients (except to industrial customers withinterruptible contract) in case of:a cold winter as it occurs every 50 years
3 consecutive days of cold spell that may occur every 50 years
failure of its major supply source during 6 months.

6

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3281.

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Due to the important role of gas for heating, French gas demand is highly weather
correlated. The average daily consumption can fluctuate almost fivefold between August(530 GWh/d) and February (2 370 GWh/d). The historic peak demand of 3 675 GWh/d
was observed on 8 February 2012. Considering a cold spell with an occurrence of once

9. NATURAL GAS

every 50 years, daily peak demand is estimated at 4 300 GWh/d. To meet demand on apeak day, the French system relies on 3 715 GWh/d of entry capacities (2 385 GWh/d byimport pipelines and 1 330 GWh/d by LNG), as well as a maximum of 2 750 GWh/d oftechnical storage withdrawals and 50 GWh/d of demand reduction measures. France may
also decide to stop interruptible export capacities in case of a crisis, but the IEA notes thatsuch a measure undermines international emergency co-operation if taken unilaterally andnot as part of cross-border solidarity agreements.
The value of French security of supply criterion (N-1) is higher than 100% (at around144%), ensuring the theoretical possibility to cover peak demand if the largest piece ofinfrastructure fails. The single largest infrastructure of the French gas system is the entry
interconnection point at Taisnières H that imports gas from the Netherlands and Norway,
with a capacity of 640 GWh/d.
France has fewer flexibility tools on the demand side than other countries; in particular,
there is little gas-fired power generation that could be substituted by other fuels in case ofa gas emergency. However, a new regulatory framework was introduced in 2020 toincrease demand-side flexibility. Industrial consumers using more than 5 GWh of gas per
year can enter into an interruptible contract with the operator of their gas network (DSO or
TSO), for which they are rewarded a lower tariff. In case of gas shortages, the system
operators can activate the interruptible contacts provisions and reduce gas supplies tothese customers on very short notice.
The Energy and Climate Law of 2019 introduced an additional regulatory measure toassure security of gas supply to customers in case of an emergency: the emergency
supplier mechanism. The idea is to appoint an emergency supplier on the basis ofgeographical distribution and candidate capacity. These companies take over the
responsibilities of the gas supplier when the incumbent is unable to satisfy its customers’
demand. In such a situation, the appointed emergency supplier contacts the customer,
informing him that he is taking over as emergency supplier and quoting an additional
service fee. The customer can refuse this service if he is able to find another supplier.
Also, since the 2018 reform and introduction of a single trading zone (TRF), when the TSO
is conducting a tender to balance the system, all gas providers must provide their unused
and technically available gas stocks from essential gas storage facilities and LNG
terminals. It allows the TSO to find balancing volumes quickly, although the prices at which
gas stocks are offered are determined by their owners.

Emergency response policies
In case of an emergency and when preventive actions (increase of supply, by-passing ofcertain infrastructure, etc.), are not sufficient to satisfy French customers’ demand, specificmeasures are foreseen in the emergency plan. The main mechanism to manage a gascrisis is targeted gas curtailment – a new framework for gas curtailment has been
introduced and should be completed in 2021.



Early warning level: when there is concrete, serious and reliable information that an event
may occur which is likely to result in significant deterioration of the supply situation and islikely to lead to the alert or the emergency level being triggered.

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The emergency plan foresees three crisis levels:



Alert level: when a supply disruption or exceptionally high gas demand occurs which resultsin significant deterioration of the supply situation, but the market is still able to manage that
disruption or increased demand without the need to resort to non-market measures.

Emergency level: in the event of exceptionally high gas demand, a significant supply
disruption or other significant deterioration of the supply situation, and in the event that all
relevant market measures have been implemented but the supply of gas is still insufficient
to meet the remaining gas demand, so that non-market measures have to be additionallyintroduced.

When an emergency is declared by a decision of the minister in charge of energy,
non-market-based measures could be taken, notably to ensure supply to protectedcustomers in France (although according to the government, the EU definition of “protectedcustomers” is impossible to apply in practice, as these customers are connected to thesame distribution grid as non-protected customers), or as a solidarity act to anothermember state of the European Union. Such non-market based measures are:

ENERGY SECURITY

9. NATURAL GAS

Recommendation of energy demand reduction, issued by the MTE.
Use of interruptible contracts with financial compensation, conducted by the TSO.
As a last resort, gas demand curtailments can be decided by grid operators, beginning byindustrial consumption, without compensation. The MTE and the Ministry of the Interior willintervene in case grid operator orders are not pursued by customers.

With the change in the storage regime in 2018, the government expects suppliers at the
beginning of the winter to hold a certain level of gas in storage depending on theircustomers’ consumption; the volumes are decided by the suppliers themselves. TSOs holdstorage to fulfil their obligation as a last resort gas supplier, which is to supply the essentialsocial services for five days in the event of the failure of their suppliers. Demand-side
response by means of interruptible contracts offers a flexibility which represents only 2%of once-in-50-years peak demand. Supply curtailment for industrial customers represents
5% of the peak demand.
France does not co-operate significantly on emergency policies with its neighbouring
countries. The centralised odorisation of natural gas in France makes it technically
impossible to physically accept gas from neighbouring countries in the event of a crisis.
The government has also not taken significant steps to conclude solidarity agreements
according to the provisions of Regulation (EU) 2017/1938 on measures to safeguard the
security of gas supply, although it has started adapting its regulation on gas curtailment toallow it to conclude such solidarity agreements.

National Emergency Strategy Organisation structure

During a crisis, suppliers and infrastructure operators are required to regularly transmit
their analysis of the situation to the National Emergency Strategy Organisation (NESO).
Suppliers could also be asked to transmit information to their consumers.

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For the gas sector, as for the oil sector, the General Directorate for Energy and Climate
Change in the MTE, and more precisely its Directorate for Energy, is responsible for the
management of supply emergencies.

9. NATURAL GAS

Gas emergency response exercises are regularly organised with stakeholders on a rangeof gas disruption scenarios. The main objectives are to test the implementation of theemergency plan and its communication with the national crisis organisation describedabove.

Assessment
In 2019, natural gas demand in France stood at 42.4 bcm, accounting for 20% of final
energy demand. This share has remained constant in the past decade, as residential andindustrial demand decreased, while demand from power generation increased. In total,
11.4 million customers are using natural gas in France (94% are households, representing
25% of gas demand, while the remaining 75% is consumed by non-household sectors,
including industry). The natural gas transmission network is operated by two operators:
GRTgaz and Teréga.
France’s domestic natural gas production is negligible, accounting for a mere 1%.
Furthermore, the Hydrocarbons Law of 2017 specifies that no exploration and production
will be permitted beyond 2040 and no more new production permits will be issued. For its
imports, the country relies on a diversified portfolio by origin and route. In 2019, gas supply
mainly originated from Norway (19.8 bcm), Russia (10.6 bcm), the Netherlands (4.6 bcm)
and Nigeria (4.5 bcm). LNG plays an increasing role in supplying the French market, with
45% of imports in 2020. France also exported 7.4 bcm of natural gas to Italy, Spain and
Switzerland in 2019.
Since the IEA’s last review, the French government has completed a demanding market
integration process by merging the remaining two market zones into a single gas-trading
zone, TRF, as of 1 November 2018. The observed benefits are the creation of a single
market price for the whole country, increased liquidity in the market and improved securityof supply.

The regulated tariff is set by the government each year in the form of a price formula
allowing then for monthly adjustments, following the opinion of the CRE. Since the start ofthe deregulation of gas prices, the share of the incumbent, Engie, has dropped
considerably. Commercial offers are often more attractive than the regulated tariff (theycan be up to 10% cheaper). Gas prices in France rank among the highest in the IEA.
France has set up an independent and free gas and electricity price comparison tool
(www.energie-info.fr), which is handled and updated regularly by the energy ombudsman.

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Since the reform of regulated tariffs commenced in 2014, alternative suppliers have morethan doubled the number of their residential consumers (a 16.7% market share at the endof 2014 versus a 35% market share in June 2020). The market share of alternative
suppliers for non-residential customers has risen by more than 50% (from 30.6% in 2015
to 46.6% in June 2020). The market share in volume is higher; alternative suppliers
accounted for almost 66% of non-residential and 33% of residential supplies. The
switching rate has increased significantly (about 5% by the end of 2019, against 2%
in 2014). In the retail sector, the phasing out of regulated tariffs was completed on
1 December 2020 for professional consumers, while regulated tariffs will remain available
for household consumers until 30 June 2023.

The gas sector is expected to fundamentally contribute to the decarbonisation target as
set in the SNBC and the PPE. Gas demand is projected to decline by 25% by 2030 incomparison to 2019 levels (from 42.4 bcm to 31 bcm as projected by the PPE).
The government has been supporting indigenous production of biogas and biomethane topromote both gas supply security and the low-carbon energy transition. In 2019, domestic
production still had a marginal share of total gas supply (0.3%). The PPE sets a target for
7% of biogas in gas consumption in 2030, and 10% if costs targeted in the baseline
trajectory decline further. According to these projections, biogas production will sharply
increase to up to 3.1 bcm per year by 2030. This will require enhanced policy efforts andinvestments, for which the current support scheme in the form of feed-in tariffs and aplanned tendering scheme may not be sufficient. With growing shares of biomethane in
the network, grid adaptation, like network meshing and reverse flows on low-pressure
pipelines, will also be needed.
France presented a very ambitious national hydrogen strategy in September 2020. It
envisages an investment of EUR 7.2 billion over the next few years to help create 6.5 GW
of hydrogen production capacity by 2030. However, beyond the strategy andannouncements of massive financial support, the government does not yet have aconcrete action plan to realise these ambitions, even though the calls for tenders werelaunched. In addition, France may miss the chance to participate in a pan-European
hydrogen network, as many countries are more advanced in this regard. France should
act quickly to catch up with its European partners, especially as production of hydrogen byelectrolysis has considerable potential in France, given its highly decarbonised electricity.

ENERGY SECURITY

9. NATURAL GAS

Although the government has ambitious plans for the gas sector, the gas consumption
reduction target of 25% by 2030 is not adequately supported by focused policy measures,notably given that 75% of gas was used by the non-household sector in 2019. Achieving
the target will greatly depend on the choices concerning the future electricity mix, inparticular when the option of new gas-fired power plants would be explored, in combination
with carbon capture, utilisation and storage. The development of an energy systemstrategy which makes the best use of the comparative advantages of each energy vector
and carrier, as is being done in many countries, can address the concerns about stranded
assets.
Questions arise on how existing infrastructure and high security of supply standards will
be maintained during the energy transition, given the expected significant drop in gas
demand. This will likely put an upward pressure on tariffs and prices, as there will be lessconsumption to pay for the upkeep of the system. Additionally, important parts of gas
infrastructure may become stranded assets over a relatively short period of time, including
distribution networks which belong to local municipalities.

Due to the important role of gas for heating, French gas demand is highly weather
correlated. Average consumption can fluctuate almost fivefold between the summer andwinter months. Although efforts were made to make demand more flexible with theintroduction of interruptible contracts, the effectiveness of this measure still needs to beassessed. Until then, the main mechanism to manage a gas crisis, albeit as a measure oflast resort, is targeted gas curtailment. A new framework for gas curtailment has been
introduced and should be completed in 2021.
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Gas emergency response9. NATURAL GAS

In 2018, the French government amended the existing gas storage regulation, which
provides a list of essential gas storage facilities that must continue to operate under all
circumstances. Capacities are auctioned, while a minimum level of revenue is being
determined by the regulator. The potential gap between minimal revenue and actual costs
is being socialised by tariffs. Although this approach has allowed for a solid availability ofstorage capacity in France, auctions in 2020 accounted for a rather low level of revenue
streams, indicating a lack of incentive from the new regulation.
The TSOs and DSOs are ultimately responsible in France for gas supply and crisis
management. There is little engagement from the government in managing potential crises
and emergency exercises are mostly run by the TSOs and DSOs, with occasional
participation of the administration. In order to ensure the availability of sufficient gas supply
and reduce the vulnerability of the gas system in case of a crisis, public service obligations
are assigned to all market players, with the key role of the TSOs and DSOs in managing
the crisis. France has very little crisis co-operation with its neighbouring countries and is
not active in gas crisis co-operation at the European level.

Recommendations
The government of France should: Match demand reduction ambitions for natural gas with concrete policy initiatives,
e.g. blending of biogas and hydrogen, energy efficiency measures, financial
incentives, and advanced electrification of industrial processes. Develop an energy
system integration strategy, building on the comparative advantages of each energy
vector and carrier, and ensuring consistency between policy objectives, to enable anefficient and cost-effective decarbonisation of the gas sector.
 Ensure concrete policy frameworks to facilitate the envisaged substantial growth of
biogas and biomethane production, with matching infrastructure developments,
allowing for up to 10% of biogases to be accepted in the grid by 2030, including byreviewing the effectiveness of support mechanisms for biogas production.
 Broaden, in close consultation with relevant stakeholders, the hydrogen strategy,
looking at production, demand and required infrastructure developments, including thepotential need for imports/exports and the repurposing of existing gas networks.

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 Assess the security of supply situation, strategy and response measures inneighbouring countries when assessing France’s own security of supply standards(i.e. infrastructure standard) and when developing initiatives (e.g. storage policy) toensure consistency and cost-effectiveness as well as promote regional solidarity.

IEA (International Energy Agency) (2021a), World energy statistics, IEA World Energy
Statistics and Balances (database), accessed on 10 September 2021
www.iea.org/statistics.
IEA (2021b), Energy Prices and Taxes 2020 (database), www.iea.org/statistics.

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References

ENERGY SECURITY

9. NATURAL GAS

Key data (2019/20 estimated)
Domestic crude oil production (2020): 16.4 kb/d, -31% since 2010
Net imports of crude oil (2019):* 981 kb/d, -32% since 2009
Domestic oil products production (2019): 1 077 kb/d, +53% since 2009

ENERGY SECURITY

10. Oil

Net imports of oil products (2019): 589 kb/d, +120% since 2009
Share of oil (2020): 31% total supply (total energy supply [TES] and international bunker
fuels),** 44% TFC, 1% in electricity generation and 1% in domestic energy production
Oil consumption by sector (2019): 1 678 kb/d (domestic transport 56%, international
bunkering 10%, industry including non-energy consumption 20%, services andagriculture 8%, residential 6%, energy sector including power generation 1%)* Imports of crude oil include crude oil, natural gas liquids and feedstock.
** Total energy supply does not include oil used for international bunkering.

Overview

As oil made up 44% of France’s total energy consumption in 2019, the implementation of
government targets under the SNBC and PPE will require very robust action, as well as
attention to the economic challenges for oil operators. A consolidation of assets anddeclining levels of investments are likely and may have an impact on maintaining securityof supply. The government will need to ensure, together with key stakeholders in the oil
industry, that security of oil supply is maintained during the energy transition.

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The oil sector in France, as in many other countries, will remain important for transport andspecific industries, but the sector will be confronted with large transformation efforts in the
coming years. The National Low-Carbon Strategy (Stratégie Nationale Bac-Carbone,
SNBC) and the multiannual energy plan (PPE) target a decrease in France’s oil
consumption of 19% by 2023 and of 34% by 2028 compared to 2012 levels, through arange of policy measures, including promoting electric vehicles, increasing the use ofrailroads (also for heavy-goods transport) and phasing out oil in residential heating infavour of green sources. France has also set mandatory blending targets of biofuels
supported by a dedicated financial support scheme and tax incentives. The country isdeveloping a biofuels manufacturing sector, which will support increased demand forbiofuels from transport, aviation and marine bunkers, to respond to a surge across theEuropean Union of the demand for advanced sustainable biofuels.

10. OIL

Supply and demand
In 2020, oil represented 31% of France’s total energy supply (TES), the same as in 2010
(Figure 10.1). Oil made up 44% of total final consumption (TFC), compared to 45%
in 2010. Domestic oil production or oil use in electricity generation have no importance.
Figure 10.1 The role of oil in supply, electricity and consumption in France, 2000-20
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Share of oil
2000
2005
2010
2015
2020

Domestic energy production

Total supply*

Electricity generation

Total final consumption

IEA. All rights reserved.

The role of oil in TFC decreased from 2000 to 2010 but has largely remained stable since.
* Total supply: share of oil in total energy supply plus international bunker fuels.
Note: The latest available data for total final consumption are for 2019.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Crude oil trade
Net imports of crude oil decreased to 981 thousand barrels per day (kb/d) in 2019, a 17%
drop since 2015 (Figure 10.2). France has several crude oil suppliers, including Saudi
Arabia (147 kb/d), Kazakhstan (137 kb/d), the Russian Federation (125 kb/d), Nigeria (120kb/d), Algeria (115 kb/d), the United States (76 kb/d) and Norway (64 kb/d), among others.
Figure 10.2 France’s crude oil net imports by country, 2000-19
1800

kb/d

Other
Iraq

1600
1400

Norway1200

United States

1000

Algeria

800

Nigeria

600

Russian Federation

400

Kazakhstan

200

Saudi Arabia

0

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Total net trade*
IEA. All rights reserved.

Notes: kb/d = thousand barrels per day. Crude oil data include crude oil, natural gas liquids and feedstock.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics

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France’s crude oil imports are well-diversified and have decreased steadily.

Oil products supply and trade
Due to the closure of a number of refineries, production of oil products in France has
decreased over the last two decades, totalling 1 077 kb/d in 2019 and included: gas/diesel(excluding biofuels) at 425 kb/d in 2019, motor gasoline at 215 kb/d, fuel oil at 109 kb/d,
naphtha at 104 kb/d, kerosene (including jet fuel) at 84 kb/d and liquefied petroleum gases
at 43 kb/d, as well as other products at 97 kb/d (Figure 10.3).
Figure 10.3 France’s oil products production, 2000-19
2 000
1 800
1 600
1 400
1 200
1 000
800
600
400
200
0

kb/d

Other products
Kerosene
NaphthaFuel oil

ENERGY SECURITY

ANNEXES

Liquefied petroleum
gases
Motor gasoline excl bio
Gas/diesel oil excl bio
2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

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Diesel oil and gasoline are the main oil products from France’s refineries.
* Kerosene-type jet fuel is at a negligible amount on this scale.
Note: kb/d = thousand barrels per day.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Figure 10.4 France’s oil products consumption, 2000-19
2 500

kb/d
LPG and ethane

2 000

NaphthaMotor gasoline

1 500

Jet and kerosene
Diesel1 000

Other gasoil
500
0
2000

Residual fuels
Other products
2002

2004

2006

2008

2010

2012

2014

2016

2018
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France’s oil products consumption has steadily decreased over the period, with diesel being
the most consumed product.
Note: kb/d = thousand barrels per day. LPG = liquefied petroleum gas.

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Source: IEA (2021b), Monthly Oil Data Service, www.iea.org/statistics.

10. OIL

In 2019, total consumption of oil products in France was 1 444 kb/d, with gas/diesel oil
at 843 kb/d, motor gasoline at 181 kb/d, liquefied petroleum gas and ethane at 141 kb/d,
naphtha at 84 kb/d, jet and kerosene at 79 kb/d, residual fuels at 24 kb/d, and otherproducts at 93 kb/d (Figure 10.4).
In 2019, France was a net importer of oil products, totalling 589 kb/d from a diverse
range of countries, including Russia (125 kb/d), Saudi Arabia (114 kb/d), the UnitedStates (50 kb/d), Spain (45 kb/d) and the United Arab Emirates (41 kb/d) (Figure 10.5).
Figure 10.5 France’s oil products net trade by country, 2000-19

Net imports

700

kb/d

Other

600

Singapore

500

Italy

400

United Arab Emirates

300

India

200

Spain

Net exports

100

United States

0

Saudi Arabia

-100
-200

Russian Federation
2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Total net trade

IEA. All rights reserved.

France imports oil products from a diverse set of countries, with a major role for Russia andSaudi Arabia.
Note: kb/d = thousand barrels per day.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Oil demand
In 2019, total oil demand was 1 678 kb/d. Domestic transport consumed 946 kb/d (56%,
down from 59% in 2015), industry 337 kb/d, international bunkers 160 kb/d, services andothers 134 kb/d, and residential 97 kb/d (Figure 10.6).

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Total oil demand has decreased by 8% over the last decade, mainly driven by falling oil
consumption in the residential sector (-46%), electricity and heat generation (-31%), andservices and others (-22%). Oil consumption in the domestic transport sector has only
decreased by 5% over the past decade.

Figure 10.6 France’s oil demand by sector, 2000-19
kb/d
2 000
1 800
1 600
1 400
1 200
1 000
800
600
400
200
0
2000

Other energy
International bunkers*
Industry**
Electricity and heatgeneration
Domestic transport***Services/other****Residential
2002

2004

2006

2008

2010

2012

2014

2016

2018

IEA. All rights reserved.

Transport, followed by industry, account for the largest share of oil consumption in France.

ENERGY SECURITY

ANNEXES* International bunkers includes bunker fuels for international aviation and navigation.
** Industry includes demand from oil refineries.
*** Domestic transport includes non-energy use in transport.
**** Services/other includes commercial and public services, agriculture, forestry, and fishing.
Note: kb/d = thousand barrels per day.
Source: IEA (2021a), IEA World Energy Statistics and Balances (database), www.iea.org/statistics.

Oil policy
The Energy Transition for Green Growth Act of 2015 set ambitious national climate andenergy targets, including the accelerated reduction of fossil fuels consumption. The
Hydrocarbons Act of 2017 banned all new oil and gas explorations. From 2021 on, no new
authorisation can be granted to extract hydrocarbons and no existing licences will berenewed, as the government targets to phase out production by 2040. As of 2021, France
also stopped providing state export guarantees to projects involving unconventional formsof oil such as shale, to be expanded to all types of oil from 2025. The SNBC and the PPEtarget a decrease in France’s oil consumption of 19% by 2023 and 34% by 2028
(compared to 2012 levels), with a range of rigorous policy measures, including:Prohibition of new installations of heating oil equipment in residential and tertiary sectors.

Ambitious targets in terms of the energy performance of vehicles, both for passenger cars
(targets of 4L/100 km average consumption in 2030 for internal combustion vehicles and12.5 kilowatt hours (kWh)/100 km by 2050 for electric vehicles, compared to around17.5 kWh/100 km today).

Strong acceleration in the pace and quality of housing renovations, reducing oil use in theexisting building stock.

Radical improvement of the energy efficiency of residential buildings (allowing a decreaseof around 40% in the sector’s energy consumption by 2050).



No new authorisations for power stations producing electricity exclusively from oil.

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Adoption of incentives to increase the share of electric mobility (purchase bonuses forelectric cars and incentives for building charging stations).

10. OIL

Continuation of the Energy Saving Certificate for ending the use of fuel oil boilers in favourof heat from heat pumps, biomass stoves, solar combined systems or connection to arenewable district heating network. Extending the existing Energy Saving Certificate“boost” for the disposal of oil tanks for low-income households.

Biofuels
France is the fourth-largest biofuels producer globally, with a share of 5% in global
production, and has a well-developed and robust biofuels infrastructure, including
production plants (also former refineries), logistics and feedstock supply chains.
According to the SNBC’s assumptions, biofuel consumption will increase to 132 terawatt
hours (TWh) in 2050, up from 40 TWh in 2019. By comparison, in 2019, total consumptionof all oil products in France was 800 TWh. Out of the 40 TWh of biofuels used, two-thirds
was fatty acid methyl esters (FAME), followed by hydrotreated vegetable oils (HVO) (16%),ethanol (11%) and ethyl tertiary butyl ether (ETBE) (6%).
Bio-component targets for transport fuels have gradually been increasing since 2015 –from 7% for petrol and 7.7% for diesel to 9.2% and 8.4% respectively, in 2022. As of 2022,
kerosene will also be subject to a mandatory share of 1%, to reach a level of 5% in 2030.
The PPE also stresses the role of advanced biofuels and targets a 1.2% share for petrol
and a 0.4% share for diesel as of 2023, with a plan to reach 3.8% and 2.8% respectively
in 2028.
Support for bio-content in fuels is largely tax-based in France. Distributors are obliged tocomply with the requirement to add bio-components to the fuels they sell for consumption.
If they fail to comply with this requirement, they are subject to an additional tax of 8% forgasoline and 8.2% for diesel in the form of the incentive tax on the incorporation of biofuels(TIRIB). But the tax rate gradually declines as the share of bio-components increases andbecomes zero for fuels that meet the blending target. To avoid the TIRIB, fuel distributors
that fall short of the blending mandate may buy certificates from distributors thatincorporated more than the required amount.
In 2020, 85% of biofuels and 62% of feedstock used in the country originated from theEuropean Union, while 48% of biofuels consumed were produced domestically. However,a target of tripling the biofuels production by 2050 will be very challenging in terms offeedstock supply. It will require stronger policies for developing production and logisticalinfrastructure and securing feedstock that meets high sustainability criteria, for which
competition will grow globally. To commence on this path, France stopped supporting theuse of palm oil as a feedstock in January 2020.

Vehicle fleet

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The transport sector is responsible for 38% of energy-related CO2 emissions in France.
As of 1 January 2020, France had a total of 38.2 million cars, a very modest decrease from
38.3 million a year earlier. This is the first time that the number of cars has decreased
since 2012. More than 97% of the fleet is made up of gasoline and diesel propelled
engines. Diesel remains the majority (58.7% of the fleet), even if its share has been
decreasing since 2015 (-5.1%). Since 2017, the number of new gasoline vehicles sold has
exceeded the number of new diesel vehicles sold.

According to the Ministry of the Ecological Transition, throughout 2019, average CO2
emissions from new passenger cars sold in France were 112 g CO2/km. Althoughemissions have fallen sharply over the last 20 years (175 g CO2/km in 1997), they havebeen stagnating since 2015. This can be explained in particular by the lower share of diesel
vehicles sold, in favour of gasoline vehicles, and the increase in sport utility vehicles.
A rapid growth of electric and hybrid cars, together with biofuels, is fundamental to reducetransport emissions in France. The government is supporting the development of cleancars in two areas. The first is support for the development of charging infrastructure andthe second is an introduction of emissions free zones in cities and accelerating clean
mobility solutions.
The Energy Transition for Green Growth Act of 2015 assumed an increase in the numberof public and private charging stations to 7 million by 2030 (an increase from 452 000 at
the end of 2020), which is supported by numerous financial schemes. For electric cars,
the government plans to have 4.8 million electric vehicles and plug-in-hybrids on the roads
by 2028 and 15 million by 2035, an exponential spike up from around 650 000 in 2021.
France also has in place a system of financial support for the purchase of clean cars byprivate owners (a bonus of up to EUR 6 000), linked to a system designed to accelerate
the removal of the most emitting cars from the market (financial support and administrative
restrictions for the circulation of the oldest vehicles). The system includes support of up to
EUR 50 000 for the purchase of an electric or hydrogen powered truck or bus, aiming at
reducing emissions from the most polluting vehicles, especially in cities.

ENERGY SECURITY

ANNEXES

Market structure
Exploration and production
The production of crude oil on French territory was 723 500 tonnes in 2019. It has
diminished by more than 75% since the end of the 1980s. This production satisfies lessthan 1% of domestic oil consumption. The reserves of crude oil (18 million tonnes [Mt])
and hydrocarbons extracted from natural gas production would represent almost 25 yearsof operation at the current rate. However, according to the provisions of the Law on
Hydrocarbons, no production activities will go beyond 2040 in France.

Oil prices and taxes

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Oil product prices are set freely except, in the overseas territories. The price for automotive
diesel in the third quarter of 2020 was USD 1.4/L, with a 66% tax share, ranking France
ninth-highest among IEA countries. The price of premium unleaded gasoline was thetenth-highest amongst IEA countries, at USD 1.6/L, with a 68% tax share. Light fuel oil had
the sixth-highest price among IEA countries, at USD 0.8/L, with a tax share of 38%.

10. OIL

Figure 10.7 Price comparisons for automotive diesel, unleaded gasoline (95 RON)
and light fuel oil in the IEA, 3Q 2020
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0

USD/L

Tax component

IEA. All rights reserved.

2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0

USD/L

Tax component

IEA. All rights reserved.

Automotive diesel, unleaded gasoline and light fuel oil prices in France are above the IEA
average.
Notes: Automotive diesel data do not include Mexico. Premium unleaded gasoline data are not available for Japan or
Mexico. Light fuel data are not available for Australia, Hungary, Mexico, New Zealand, Norway, the Slovak Republic
or Sweden.
Source: IEA (2020c), Energy Prices and Taxes Third Quarter 2020, www.iea.org/statistics.

Refining
France has 7 operating refineries (down from 12 a decade ago). France’s refining capacity
amounted to 62 Mt in 2019, compared to 98 Mt in 2009, a decrease of around 40%.
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Oil infrastructure

In Martinique, the SARA refinery contributes to the supply of the West Indies.
The La Mède refinery, operated by Total, was closed in 2016 and has been transformed
into a biorefinery. This biorefinery, unique in France, started operations in early July 2019and is one of the largest in Europe.
Figure 10.8 Oil infrastructure in France

The shutdown of the Grandpuits refinery was announced in September 2020, motivatedprimarily by repeated failures in the Île-de-France pipeline that supplies it with crude oil.
Refining at all units of the refinery ceased in 2021 and the storage of oil products will end
at the end of 2023. The site will be converted into a “zero oil platform for biofuels andbioplastics” – the second biorefinery in the country with activities to support an advanced
circular economy, which is expected to start operations in 2024.

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Refineries are mainly concentrated in two zones: the Marseille-Fos area with two refineries(Fos, Lavéra), and the Basse-Seine area with another two facilities (Gonfreville,
Gravenchon). Isolated refineries are those of Donges (Grand Ouest region) and Feyzin(Lyon). Total, Esso and Petroineos are the operators of refineries in the country.

ENERGY SECURITY

ANNEXES10. OIL

All three refinery operators in France invested in upgrading the efficiency of their plants.
However, the structural decline in European demand for oil products and the growth of
more competitive refineries abroad (including in the United States, Asia and the
Middle East), are weakening prospects for French refining.

Ports and pipelines
France imports almost all of its oil through sea ports; crude oil (116.4 Mt in 2019) comesthrough the ports of Le Havre (30.1%), Marseilles (34.8%) and Nantes-Saint-Nazaire(12.1%). Refined products are imported by sea, but come also from neighbouring
countries, by road, by pipeline or by river (Belgium and Germany).
Crude oil pipelines in France connect import depots and refineries. The main ones are:

the southern European pipeline (PSE), which supplies the refineries of Feyzin and Cressier(Switzerland) from Marseille

the Antifer-Le Havre pipeline, which transports crude oil from the port of Antifer to the CIM(Compagnie Industrielle Maritime) depot, located in Le Havre; the oil is then transported to
the refineries in the Basse-Seine region.

Product pipelines supply the distribution depots. France has four pipeline systems
dedicated to refined products:



The Le Havre-Paris (LHP) pipeline supplies the Île-de-France (Paris) region and the Paris
airports and also serves the areas of Caen and Orléans-Tours.



The Méditerranée Rhône pipeline (PMR) supplies the Lyon region, the Côte-d’Azur andSwitzerland (Geneva) from Fos-sur-Mer.



The common defence pipeline (ODC) represents the French part of the Central Europe
Pipeline System (CEPS) of the North Atlantic Treaty Organization and extends over
2 260 km in France.



The Donges-Melun-Metz (DMM) pipeline crosses France from west to east, from the portof Saint-Nazaire to Saint-Baussant. It supplies the region of Le Mans and eastern France.
It is connected to the LHP and the ODC.

Some pipelines supply both distribution depots and refineries with crude oil and products:The Île-de-France pipeline (PLIF) supplies the Grandpuits refinery (south-east of Paris)
from the port of Le Havre and can be used as a back-up to supply the Normandy refinery.
It also transports finished products from the Grandpuits refinery to the Gargenville depot
or to those in Le Havre. The PLIF also provides the Grandpuits refinery with crude oil
extracted from Paris area oil fields.

The pipelines between Fos and Manosque (PSM and GSM) transport crude oil and refined
products between the port of Marseille and the caverns of Manosque, as well as the brine,
which is involved in emptying and filling these caverns.

Distribution of petroleum products
The retail fuel market in France was deregulated in 1987. There are around 11 000 retailservice stations divided between different categories of networks:
47% of mass distribution stations (hypermarkets) account for 62% of the fuel market
53% of stations in the “traditional” network account for 38% of the market with:

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 30% of stations managed under a contract with an oil company, mostly located in urban
areas with significant sales volumes

 70% of independent stations, under an oil brand or without (so-called “white pumps”),
mainly active in rural areas and delivering lower volumes of fuel.

The fuel distribution market in France is characterised by large differences in final prices
between sites and operators. To make it easier for consumers to get information to choose
the cheapest refuelling sites, the government has set up a website (www.prixcarburants.gouv.fr), on which price data are published daily.

Storage
France’s overall storage capacity of petroleum products has remained at a stable
46 million m3 (290 mb). More than 60% of the capacity is for the storage of refined products(182 mb).

ENERGY SECURITY

ANNEXESOut of the total, 21.5 million m3 are storage depots, 15.1 million m3 are located in refineries
and adjacent storage depots of refineries, 9.2 million m3 are in underground caverns andsome 300 000 m3 are located at main airports. The number of smaller depots has
decreased in favour of large capacity depots due to strong competition. Among the203 depots, 90 are solely for distribution. These are small depots, generally with a capacityof less than 1 000 m3.
The distribution of storage capacities in France is not homogeneous. The proximity ofrefiners, import sites, but also massive transport infrastructure for products influences the
distribution. The Normandy and Provence regions alone represent 48% of national storage
capacities. To a lesser extent, the Nouvelle Aquitaine and Hauts de France regions standout, with 18% of capacity due to the presence of large import depots. Île-de-France andthe Auvergne-Rhône-Alpes region, with 8.6% and 6.4% respectively, also represent asignificant share, which can be explained by the major economic activity in these areas.
Finally, all other regions represent only 18.4% of the country’s storage capacity.

Oil emergency policies
France has a comprehensive legislative and regulatory framework in place to provide forthe country’s response to an oil emergency. The framework is based on a stockholding
obligation on industry, active market entities, high-quality and accuracy of data reporting,and both public and private institutions. Within the Ministry of the Ecological Transition, theGeneral Directorate for Energy and Climate Change (DGEC), and more precisely its
Directorate for Energy, is responsible for the management of oil supply emergencies.

Legislation and the National Emergency Strategy Organisation

Public authorities perform general supervision over the strategic stocks system byparticipating on the boards of directors of the Comité Professionnel des Stocks Stratégiques
Pétroliers (CPSSP) and Société Anonyme de Gestion des Stocks de Sécurité (SAGESS).
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The French Energy Code and Order of 25 March 2016 relating to the constitution of strategic
oil stocks, provide the French government with powers to guarantee that oil stocks in the
country are sufficient to meet the IEA’s and EU’s requirements, and that it can draw stocks
in case of a domestic or international emergency.

10. OIL

The CPSSP is a legal body with a board of directors representing various oil organisations
and representatives of relevant ministries. Under the Law of 31 December 1992 reforming
the petroleum regime, the sole mission of the CPSSP is to constitute and safeguard stocksof crude oil and oil products to cover the part of the stockholding obligation of oil operators
as attributed by law to the CPSSP. In practice, the CPSSP is an intermediary between
market operators obliged to maintain stocks and the SAGESS, which actually stores oil onbehalf of these market operators (84.5% of the CPSSP’s obligations is delegated to
SAGESS). The CPSSP does not have a particular role in case of an oil crisis. Although
the agency is a private entity and is not a part of the administration, 2 of its 13
administrators’ seats are held by the Ministry of the Economy and the Ministry of Budget.
The DGEC attends board meetings in an advisory capacity. Decisions of the board aresubmitted to this government commissioner for his agreement, and he has a right of veto.
SAGESS is an association established in 1988 by the oil operators where shareholding is
allocated to obligated operators, in proportion to their market shares. SAGESS’s role is tobuild up and maintain strategic stocks of oil to contribute to the fulfilment of obligations
defined by national and international standards and to enable its shareholders to delegate
their stockholding obligation.
SAGESS is directly responsible for managing stocks in the case of a crisis, upon the
DGEC’s decisions. The Ministries of Energy, Budget and Economy attend the SAGESS
boards in an advisory capacity. Any board decision can be redeliberated on one of thesethree ministers’ request.
Although France has not officially defined its National Emergency Strategy Organisation(NESO) structure, during emergencies, the DGEC/Directorate for Energy acts as the
NESO and as such falls into the country’s general emergency structure, ultimately led by
the prime minister. Depending on the level and type of the crisis, the prime minister canactivate the “Interministerial Crisis Cell” and decide to give the lead to the ministry in chargeof energy. In such a case, the Roquelaure Crisis Centre in the ministry would operate asa communication cell by using the means of the Ministerial Operational Centre of
Monitoring and Warning (CMOVA) to manage the crisis and co-ordinate between theadministration and the market. In case of a decision to release oil stocks, SAGESS would
be a primary contact of the DGEC/Directorate for Energy, while CPSSP is not part of theemergency system. Oil operators are always closely engaged in the management of an oil
crisis. They provide information but also advise due to their knowledge of the logistics ofthe oil industry.

Emergency exercises and training are conducted on a regular basis, due to the frequencyof responses to various kinds of emergencies in the country (industrial accidents, strikes,
local shortages of products).

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France elaborated a Hydrocarbons Resources Plan, which serves as an emergency
handbook to manage all types of oil emergencies, including a description of step-by-stepprocedures and the responsibilities of different state and market actors during an
emergency. In addition, the National Localisation Plan of Stockholding sets the rules for
deploying oil stocks throughout the country, to assure for their immediate availability close
to consumption centres, should the need arise. It also reflects the decentralised nature of
the French administration, where certain roles during emergencies are delegated toprefects of regions and departments.

Stockholding
In order to fulfil its international stockholding obligation, France puts an obligation oncompanies that sell oil products on the domestic market. The level of this obligation (forthe accounting year of July to June), is set at 29.5% of quantities sold during the previous
year for each of the following categories:






Category 1: motor and aviation gasoline
Category 2: gas oil and distillate fuel oil
Category 3: kerosene-type jet fuelCategory 4: fuel oil.

Oil operators are divided into two groups according to their customs status: authorised
warehouse keepers or registered consignees. In meeting their stockholding requirements,
warehouse keepers may choose to delegate either 56% or 90% of their stockholding
obligation to the CPSSP, for which they must pay the remuneration. Registeredconsignees (around 30 in the country) are obliged to delegate their entire obligation to the
CPSSP (see Figure 10.9). Almost all companies choose to delegate 90% of their obligation
to the CPSSP, instead of 56% (only a few refineries choose this option). Thus, 85% of theindustry’s obligation was delegated to the agency in 2020 (up from 78% in 2016).
Operators themselves stored 15% of stocks in the country (either in the form of physicalstocks or domestic tickets). The CPSSP then utilises SAGESS to hold and manage
physical stocks. In 2020, 90% of the total delegation vested in the CPSSP by operators
was commissioned to SAGESS. The CPSSP may also purchase domestic or international
tickets.

ENERGY SECURITY

ANNEXESSpecific to the French system, industry operators very often request that the government(DGEC) releases stocks from the strategic reserves – almost on a daily basis and much
more frequently than in any other IEA country. The comingling of SAGESS stocks withcommercial stocks, along with highly optimised industry distribution systems with very low
volume margins, has decreased the industry’s ability to respond to local supply constraints
with their commercial stocks, leading to an overreliance on strategic stocks. Thus, inpractice, the CPSSP’s stocks act as a “joint operational stockpile” of industry, rather thanas strategic stocks for severe emergencies. Given the frequency of stock releases, toincrease the resilience of the distribution system, consideration should be given to
introducing a balanced payment by oil operators for making use of the CPSSP’s exchange
and loan facility. Notwithstanding the overreliance by industry on strategic stocks, thestockholding system as such is well established and understood by all the relevant entities
and provides the administration with the flexibility to quickly respond to frequent local crises
or an IEA collective action.

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SAGESS does not own storage facilities, but is the owner of large quantities of physical oilstocks (65% of all oil volumes in the country). As of February 2021, SAGESS managed
13.6 Mt of stocks, the majority of which is dispersed across a large number of storage
locations in France, including refineries and storage depots, much of it comingled withcommercial stocks. Segregated stocks are mostly held in caverns near Manosque insouth-east France. SAGESS holds diesel, gasoline, kerosene, heating oil and crude oil,with the stock profile of the refined products held balanced to market consumption.

10. OIL

Figure 10.9 Stockholding system in France

IEA. All rights reserved.

Note: CPSSP = Comité Professionnel des Stocks Stratégiques Pétroliers. SAGESS = Société Anonyme de Gestion
des Stocks de Sécurité.

Oil stocks
Oil stocks in France have consistently been above the 90-day requirement, necessary forcompliance with the IEA’s rules (Figure 10.10). At the end of 2020, total stocks were at
107 days, with 32 days for industry-owned stocks and 75 days for agency (CPSSP) stocks.
Figure 10.10 Emergency oil stocks in France by type, 2010-20

140

Days of net imports

120

Abroad public

100

Abroad industry

80
Domestic industry

60
40

Domestic public

20

90-day obligation

0

IEA. All rights reserved.

Source: IEA (2021b), Monthly Oil Data Service, www.iea.org/statistics.

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France’s emergency stocks have consistently been above the IEA requirements.

Assessment
Government policies enshrined in the SNBC and the PPE target a 19% decrease in
France’s oil consumption by 2023 and 34% by 2028 (compared to 2012 levels). The main
policies focus on the transport sector and include support for the purchase of electric andhybrid vehicles, incentives for building charging stations, enhanced biofuel blending
obligations, and prioritising rail and modal shifts in urban transport. France is also aiming
to phase out oil from the heating sector, by prohibiting new oil installations in the residential
and tertiary sectors and replacing all oil boilers by 2028. And no new authorisations for
power stations producing electricity exclusively from oil will be issued.
During 2019, total oil demand in France was 1 659 kb/d, having decreased by 11% overthe previous decade. Oil accounted for 44% of France’s TFC in 2019, primarily due to its
dominant role in transport (where 90% of TFC was derived from oil) and its still significant
use in industry (where oil represented 35% of TFC). Domestic transport consumed
937 kb/d in 2019 (56% of total country’s oil use), with industry consuming 319 kb/d (19.2%
of total consumption) and international bunkers 156 kb/d (10% of the total).

ENERGY SECURITY

ANNEXES

Diesel consumption has decreased by 5.8% since 2015, while gasoline has increased by
18.8%, reflecting a halt to the further dieselisation of the French vehicle fleet. Since 2017,
the number of new gasoline vehicles sold has exceeded the number of new diesel vehicles
sold, while the total number of cars has stabilised. More than 97% of the fleet is made up
of internal combustion engines. With a government plan to have 15 million electric andhybrid vehicles on the road in 2035, this ratio will have to change quickly. Already in thefirst half of 2021, electric vehicles and plug-in hybrids have reached 15.7% of new car
sales, against 2.8% in 2019.
Oil production in France is negligible, covering 1% of domestic demand. According to theprovisions of the Law on Hydrocarbons adopted in 2017, no production activities will go
beyond 2040 in France and no new exploration permits authorised after 2018, with an
exception only for the extension of a valid exclusive exploration permits.
Crude imports are sourced from a wide variety of countries, including Algeria, Kazakhstan,
Libya, Nigeria, Norway, Saudi Arabia and the Russian Federation. Refined products arealso imported from a variety of countries. France’s diverse supply chains, avoiding anoverreliance on supply from one particular region, enhances its security of supply. Most
crude and refined products are imported through ports, notably Marseilles, Le Havre andSaint-Nazaire, with some refined products also being imported by pipeline, road and river.
A network of pipelines efficiently transports crude from the ports to refineries and refined
products to distribution depots throughout the country.

France has extensive storage capacity, totalling around 46 million m3 (290 mb). Despite
the ongoing decrease in refining capacity, storage levels have remained largely stablesince 2014. More than 60% of storage capacity is for refined products. The distribution of

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French refining capacity has decreased by a third since 2009, to 62 Mt (following closuresof 6 out of 12 refineries). Production of oil products in France has consequently decreased.
Refining operations do not completely match domestic demand, with a surplus in gasoline
but a deficit in diesel production.

10. OIL

storage capacities in France is not homogeneous. The proximity of refiners and importsites as well as massive transport infrastructure for petroleum products influences thelocations.
There are over 11 000 service stations in France, with 62% of volumes served by mass
distribution stations belonging to hypermarkets, and 38% by smaller urban and rural based
stations. The government has created a free online fuel price comparison tool (www.prixcarburants.gouv.fr), which is updated daily and well known to consumers.
France has set a mandatory blending of biofuels for fuel distributors, with certain tax
incentives envisaged for meeting the blending targets (TIRIB). The bio-component targets
for transport fuels have been gradually increasing since 2015, and will be 9.2% and 8.4%
for petrol and diesel respectively in 2022. Penetration of advanced biofuels is targeted,with obligatory blending objectives in 2023 of 1.2% for gasoline and 0.4% for diesel oil,rising further to 3.8% and 2.8% in 2028, respectively.
France has a well-developed biofuels manufacturing sector, being the fourth-largest
producer globally. While some refining capacity has already been converted to biorefining,production capacity is likely to increase over the next decade in response to rising demand.
Challenges will arise in the sourcing of sufficient quantities of finished biofuels andsustainable feedstock. Notwithstanding the expected increase in domestic production, it
seems likely that considerable quantities of biofuels and feedstock will need to beimported. To meet high sustainability standards of feedstock, France stopped supporting
the use of palm oil in January 2020.
The implementation of government targets outlined in the SNBC and the PPE to reduce
oil consumption will pose economic challenges for oil operators. This is likely to lead to a
consolidation of assets and declining levels of investment and may have an impact onmaintaining security of supply. Already, the optimisation of the tight supply chain is done
through an overreliance on the strategic stocks surplus by oil operators to maintainsupplies to the market.
The government, in dialogue with industry partners and other stakeholders, should
consider infrastructure requirements needed to ensure the availability of products during
the transition to electrification and alternative liquid fuels. At the same time, measures
should be considered to encourage the continued repurposing of existing infrastructure forbiofuels production and distribution, and to encourage the roll-out of electric vehicle
charging points and alternative fuel delivery systems via the existing service station
network.

France has a comprehensive legislative and regulatory framework in place to provide forthe country’s response to an oil emergency. The framework is based on a stockholding
obligation on industry, facilitated by a stockholding agency (CPSSP) and an association of
oil operators (SAGESS), active market entities, high-quality and accuracy of datareporting, and both public and private institutions. Within the Ministry of the EcologicalTransition, the Directorate for Energy is responsible for the management of oil supply
emergencies. The Energy Code and Order of 25 March 2016 relating to the constitution ofstrategic oil stocks provide the French government with powers to guarantee that oil stocks
in the country are sufficient to meet the IEA’s and EU’s requirements, and that it can draw
stocks in case of a domestic or international emergency.
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Emergency policy

France has an elaborate Hydrocarbons Resources Plan, which serves as an emergency
handbook to manage all types of oil emergencies, including the description of step-by-stepprocedures and the responsibilities of different state and market actors during an
emergency. In addition, the National Localisation Plan of Stockholding sets the rules for
deploying oil stocks throughout the country, to assure for their immediate availability close
to consumption centres, should the need arise. It also reflects the decentralised nature of
the French administration, where certain roles during emergencies are delegated toprefects of regions and departments.
The oil security system in France is based on a stockholding obligation imposed on
industry equal to 29.5% of the volume of oil sold by them for domestic consumption during
the previous year (from July to June). In meeting their stockholding requirements,
warehouse keepers may choose to delegate either 56% or 90% of their stockholding
obligation to the CPSSP, for which they must pay the remuneration. Registeredconsignees are obliged to delegate their entire obligation to the CPSSP. The CPSSP thenutilises SAGESS’s services to hold and manage physical stocks.

ENERGY SECURITY

ANNEXESParticular to the French system is that industry operators very often ask the government
to loan stocks from the strategic reserves, much more frequently than in any other IEA
country. Notwithstanding the overreliance by industry on strategic stocks, the stockholding
system as such is well established and provides the administration with the flexibility toquickly respond to local crises or an IEA collective action.
To prepare for the energy transition, and as part of the sector’s coupling strategy, thegovernment should provide clarity on the future role of petroleum products. The use ofmineral oils will decrease, putting pressure on the viability of current distribution chainsand oil stockholding, while at the same time the use of biofuels will increase, posing
storage and distribution challenges.
These changes will have a marked effect on the utilisation of existing infrastructure,including refineries, and may trigger a fundamental market realignment. It is important thatthe government continues to engage with key stakeholders to ensure security of supply ismaintained during the energy transition.

Recommendations
The government of France should: Assess, in conjunction with all relevant stakeholders, options for meeting increased
domestic biofuels demand and the longer term need to ensure the availability ofsufficient quantities of sustainable feedstock.

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 Together with market operators and other key stakeholders, examine the implicationsof policies to decrease petroleum product demand and the expected rationalisation of
infrastructure for national supply, and explore opportunities for accelerated
repurposing of particular existing assets to meet biofuels production and distribution
requirements.

10. OIL

 Review the capacity and adequacy of the transport and storage infrastructure thatprovides products to the Paris region and determine its level of resilience, in light ofrecent difficulties with the PLIF pipeline and the closure of the Grandpuits refinery.
 Consider the establishment of a minimum stock level, below which stock levels will not
be permitted to fall by way of exchanges and loans, so as to ensure the availability ofadequate stocks in the event of a significant or prolonged market disruption.
References
French Government (2021), Fuel prices (web page), www.prix-carburants.gouv.fr.
IEA (International Energy Agency) (2021a), World energy statistics, IEA World Energy
Statistics and Balances (database), accessed on 10 September 2021
www.iea.org/statistics.
IEA (2021b), Monthly Oil Data Service, accessed on 10 September 2021,
www.iea.org/statistics.

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IEA (2021c), Energy Prices and Taxes third quarter 2020 (database), accessed on 10
September 2021 www.iea.org/statistics.

ANNEX A: Organisations visited
Agency for the Ecological Transition (ADEME)
Association Française de Gaz (AFG)
Air Liquide
Alternative Energies and Atomic Energy Commission (CEA)
AMORCEANNEXESANNEXES

Association Nationale des Opérateurs Détaillants en Énergie (ANODE)
Association of Energy Economists (FAEE)
CIM/PISTO
Comité Professionnel des Stocks Stratégiques Pétroliers (CPSSP)CSF NSE
Électricité de France (EDF)
Energy Regulatory Commission (CRE)
ENEDIS
ENERPLAN
ENGIE
Eni
Fédération des Services Énergie Environnement (FEDENE)
Fédération nationale des collectivités concédantes et régies (FNCRR)
France Énergie Éolienne (FEE)
France Gaz Renouvelables
France Nature Environnement (FNE)
French Union of Petroleum Industries (UFIP)
GRDF
Greenpeace France
GRTgazHynamics
IFP Energies Nouvelles (IFPEN)
Institute for Climate Economics (IC4E)
Institute for Sustainable Development and International Relations (IDDRI)
Ministry for the Economy, Finance and the Recovery (MEF)
Ministry of the Ecological Transition (MTE)
Ministry of Higher Education, Research and Innovation (MESRI)
National Agency for the Management of Radioactive Waste (ANDRA)
National Alliance for the Coordination of Energy Research (ANCRE)
National Centre for Scientific Research (CNRS)National Research Agency (ANR)
Network of Regional Energy and Environment Agencies (RARE)
ORANO
Photovoltaic Institute of Île-de-France (IPVF)
Regional and Interdepartmental Directorate for the Environment, Planning and Transport (DRIEE)
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Nuclear Safety Authority (ASN)ANNEXES

Regions of France
Renewable Energies Union (SER)
Réseau Action Climat (RAC)
RTE
Safra
Société anonyme de gestion de stocks de sécurité (SAGESS)
TerégaTotal Direct Energie
TOTAL Energies
UEF

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UPRIGAZ

ANNEX B: Review team and preparation of the report
The in-depth review team visited virtually France from 1 to 11 March 2021. The review team met withgovernment officials, energy suppliers, market participants, interest groups in the public and private
sectors, consumer representative associations, research institutions, and other organisations and

ANNEXESANNEXES

stakeholders. This report was drafted based on the information obtained during these meetings, theteam’s preliminary assessment of France’s energy policy, the government’s response to the IEA’s energy
policy questionnaire, and information on subsequent policy developments from the government andprivate sector sources. The members of the team were:

IEA member countries
Dr Noé van Hulst, Netherlands (team leader)
Dr Lesley Dowling, Australia
Mr Maarten Noeninckx, Belgium
Mr John Twamley, Ireland
Dr Alessandro Lanza, Italy
Mr Kyle Nicholas, United States
Dr Christopher Kukla, United Kingdom
Mr Pierre Loaec, European Commission
Dr Jan Horst Keppler, OECD Nuclear Energy Agency

International Energy Agency
Mr Aad van Bohemen, Head of Energy Policy and Security Division
Ms Sylvia Beyer, Senior Energy Policy Analyst (review co-ordinator)
Mr Milosz Karpinski, Energy Analyst
The review team is grateful for the co-operation and assistance of the many people who supported thereview. Thanks to their hospitality, openness and willingness to share information, the visit was highly
informative, productive and enjoyable. The review team expresses its gratitude to the Director Generalfor Energy and Climate, Mr Laurent Michel, the Director for Energy, Ms Sophie Mourlon and Mr Aurelien
Gay, senior advisor to the Director for Energy, whose overview comments helped frame all the
discussions during the review. The team also extends a special thanks to Ms Carole Lancereau, Mr Brice
Leroy and Mr Gustave Richard from the Ministry of the Ecological Transition for their tireless efforts in coresponses to the team’s many requests, and patience throughout the weeks leading up to and during thereview.

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ordinating the in-depth review and the emergency response review parts of the review visit, prompt

ANNEXESThis review was prepared under the guidance of Aad van Bohemen, Head of the Energy Policy andSecurity Division, IEA. Sylvia Beyer managed the review and is the main author and co-ordinator of thereport. Milosz Karpinski wrote the chapters on oil and natural gas. Alessio Scanziani and Clémence Lizé
drafted the sections relating to energy data contained in each chapter, supported by Myriam Badri,
Eunjin Choe and Anders Caratozzolo, who together ensured the preparation of the report with figures,tables and maps.
Helpful comments, chapter reviews and updates were provided by the following IEA staff: Carlos
Fernández Alvarez, Blandine Barreau, Francois Briens, Paolo Frankl, Peter Fraser, Paulina Henriot,
César Aljeandro Hernandez, Simone Landolina, Jean-Baptiste le Marois, Sara Moarif, Grergely Molnar,
Jaques Warichet. Thanks also go to Michel Berthelemy from the OECD Nuclear Energy Agency.
Special thanks to the IEA Secretariat with regard to the data, publication and editing. Erica Robin,
Roberta Quadrelli and Domenico Lattanzio provided support on statistics. Therese Walsh managed theediting process and Astrid Dumond managed the production process. Isabelle Nonain-Semelin finalised
the layout. Ms Tanya Dyhin and Grace Gordon managed the design process. Jad Mouawad andJethro Mullen supported the press launch. The report was edited by Jennifer Allain.
The Shared Goals, which were adopted by the International Energy Agency (IEA) ministers at their 4 June
1993 meeting in Paris, provide the evaluation criteria for the in-depth reviews conducted by the IEA. The

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Shared Goals are presented in Annex D.

ANNEX C: Energy balances and key statistical data
Unit: Mtoe
SUPPLY

1973

1990

2000

2010

2018

2019

2020E

TOTAL PRODUCTION

44.2

111.9

130.6

135.7

135.0

131.2

119.5

Coal

18.0

8.3

2.5

0.2

-

-

-

Peat

-

-

-

-

-

-

-

Oil

2.1

3.5

1.8

1.1

0.9

0.9

0.8

Natural gas

6.3

2.5

1.5

0.6

0.0

0.0

0.0

Biofuels and waste1

9.8

11.0

10.8

15.5

16.8

16.7

15.8

Nuclear

3.8

81.8

108.2

111.7

107.6

104.0

92.2

Hydro

4.1

4.6

5.7

5.4

5.6

4.9

5.3

Wind

-

-

0.0

0.9

2.5

3.0

3.5

Geothermal

0.0

0.1

0.1

0.2

0.4

0.5

0.5

Solar/other2

0.0

0.1

0.1

0.2

1.2

1.3

1.4

TOTAL NET IMPORTS3
Coal

Oil

138.3

113.6

124.6

124.5

112.3

112.7

96.1

Exports

1.3

0.6

0.5

0.2

0.0

0.0

0.0

Imports

10.8

13.5

13.4

12.3

9.3

7.3

5.1

Net imports

9.5

12.8

12.8

12.1

9.2

7.3

5.1

Exports

13.6

14.6

22.7

23.1

20.3

17.5

13.2

Imports

142.2

100.5

112.5

106.3

97.2

95.2

78.0

-7.2

-5.6

-7.9

-7.8

-7.7

-7.8

-3.9

121.5

80.3

82.0

75.4

69.2

69.9

60.9

Int'l marine and aviation bunkers
Net imports
Natural gas

Electricity

Exports

0.1

0.3

0.7

2.6

5.3

9.7

8.2

Imports

7.6

24.7

36.5

42.1

43.9

48.9

41.3

Net imports

7.6

24.4

35.8

39.6

38.6

39.2

33.1

Exports

0.6

4.5

6.3

4.3

6.6

6.3

5.5

Imports

0.4

0.6

0.3

1.7

1.2

1.3

1.7

Net imports

-0.2

-3.9

-6.0

-2.6

-5.4

-5.0

-3.9

TOTAL STOCK CHANGES

-2.3

-1.7

-3.5

2.7

-1.0

-1.4

2.2

TOTAL SUPPLY (TES)4

180.1

223.8

251.7

262.9

246.3

242.5

217.8

Coal

29.3

20.1

14.9

12.0

9.1

7.3

5.4

Peat

-

-

-

-

-

-

-

Oil

119.8

84.0

82.2

77.0

70.9

71.1

61.7

Natural gas

13.5

26.0

35.8

42.6

36.8

37.5

35.0

Biofuels and waste1

9.8

11.0

10.8

15.7

17.6

17.9

16.7

Nuclear

3.8

81.8

108.2

111.7

107.6

104.0

92.2

Hydro

4.1

4.6

5.7

5.4

5.6

4.9

5.3

Wind

-

-

0.0

0.9

2.5

3.0

3.5

0.0

0.1

0.1

0.2

0.4

0.5

0.5

Geothermal
Solar/other2

0.0

0.1

0.1

0.2

1.2

1.3

1.4

Electricity trade5

-0.2

-3.9

-6.0

-2.6

-5.4

-5.0

-3.9

Coal

16.3

9.0

5.9

4.6

3.7

3.0

2.5

Peat

-

-

-

-

-

-

-

66.5

37.5

32.7

29.3

28.8

29.3

28.3

Natural gas

7.5

11.6

14.2

16.2

15.0

15.5

16.1

Biofuels and waste 1

5.4

4.9

4.3

6.0

7.1

7.4

7.7

Nuclear

2.1

36.6

43.0

42.5

43.7

42.9

42.3

Hydro

2.3

2.1

2.3

2.1

2.3

2.0

2.5

Wind

-

-

-

0.3

1.0

1.2

1.6

ANNEXESANNEXES

Oil

Geothermal

0.0

0.0

0.1

0.1

0.2

0.2

0.2

Solar/other 2

0.0

0.0

0.0

0.1

0.5

0.5

0.7

Electricity trade 5

-0.1

-1.7

-2.4

-1.0

-2.2

-2.0

-1.8

0 is negligible, - is nil, .. is not available, x is not applicable. Please note: rounding may cause totals to differ from the sum of the elements.

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Shares in TES (%)

ANNEXES
Unit: Mtoe
DEMAND
FINAL CONSUMPTION

1973

1990

2000

2010

2018

2019

2020E

TFC

142.2

141.6

161.5

159.8

151.4

150.1

..

Coal

14.0

6.3

3.4

2.7

1.5

1.2

..

Peat

-

-

-

-

-

-

..

Oil

96.0

75.1

80.5

71.3

66.2

65.9

..

Natural gas

10.3

23.9

32.1

33.0

30.2

29.5

..

Biofuels and waste1

8.9

9.7

9.0

11.7

12.2

12.4

..

Geothermal

0.0

0.1

0.1

0.0

0.0

0.0

..

Solar/other2

-

0.0

0.0

0.1

0.2

0.2

..

Electricity

12.8

26.0

33.1

38.2

37.6

37.1

..

Heat

0.3

0.5

3.2

2.9

3.6

3.7

..

Coal

9.8

4.4

2.1

1.7

1.0

0.8

..

Peat

-

-

-

-

-

-

..

Oil

67.5

53.1

49.9

44.6

43.7

43.9

..

Natural gas

7.2

16.9

19.9

20.7

19.9

19.6

..

Biofuels and waste 1

6.3

6.8

5.6

7.3

8.1

8.2

..

Geothermal

0.0

0.1

0.1

0.0

0.0

0.0

..

Solar/other 2

-

0.0

0.0

0.0

0.1

0.1

..

Electricity

9.0

18.4

20.5

23.9

24.8

24.7

..

Heat

0.2

0.3

2.0

1.8

2.4

2.5

..

TOTAL INDUSTRY6

56.3

44.8

49.2

42.6

41.5

40.9

..

Coal

7.3

4.6

2.7

2.3

1.4

1.2

..

Shares in TFC (%)

Peat

-

-

-

-

-

-

..

35.0

17.8

18.6

15.8

14.5

14.7

..

Natural gas

5.7

11.1

14.7

12.1

12.2

11.7

..

Biofuels and waste1

1.2

1.5

1.6

1.5

1.8

1.8

..

Oil

Geothermal

-

-

-

-

-

-

..

Solar/other2

-

-

-

-

0.0

0.0

..

Electricity

7.2

9.9

11.6

10.1

10.1

9.9

..

-

-

-

0.8

1.5

1.6

..

Coal

12.9

10.3

5.6

5.4

3.4

2.8

..

Peat

-

-

-

-

-

-

..

Oil

62.1

39.6

37.9

37.0

34.9

35.9

..

Natural gas

10.0

24.8

29.8

28.5

29.4

28.6

..

Biofuels and waste 1

2.1

3.3

3.2

3.4

4.5

4.4

..

Heat
Shares in total industry (%)

Geothermal

-

-

-

-

-

-

..

Solar/other 2

-

-

-

-

-

-

..

12.8

22.0

23.5

23.7

24.2

24.3

..

-

-

-

1.9

3.6

4.0

..

TRANSPORT4

24.7

38.4

44.8

43.6

45.2

45.2

..

OTHER7

61.2

58.4

67.5

73.6

64.7

63.9

..

Coal

6.6

1.7

0.6

0.4

0.1

0.1

..

Electricity
Heat

-

-

-

-

-

-

..

Oil

37.0

19.6

18.2

15.3

10.6

10.3

..

Natural gas

4.6

12.8

17.5

20.8

17.8

17.6

..

Biofuels and waste1

7.7

8.2

7.1

7.8

7.3

7.3

..

Geothermal

0.0

0.1

0.1

0.0

0.0

0.0

..

Solar/other2

-

0.0

0.0

0.1

0.2

0.2

..

Electricity

5.0

15.5

20.7

27.2

26.7

26.3

..

Heat

0.3

0.5

3.2

2.1

2.1

2.1

..

Coal

10.8

2.8

0.9

0.5

0.1

0.1

..

Peat

-

-

-

-

-

-

..

Oil

60.4

33.6

26.9

20.7

16.4

16.0

..

Natural gas

7.5

22.0

25.9

28.3

27.5

27.5

..

Biofuels and waste 1

12.6

14.0

10.5

10.6

11.2

11.5

..

Geothermal

0.0

0.2

0.2

0.0

0.1

0.1

..

Solar/other 2

-

0.0

0.0

0.1

0.3

0.3

..

Electricity

8.2

26.5

30.7

37.0

41.2

41.2

..

Heat

0.4

0.8

4.8

2.8

3.2

3.3

..

Peat

0 is negligible, - is nil, .. is not available, x is not applicable. Please note: rounding may cause totals to differ from the sum of the elements.

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Shares in other (%)

Unit: Mtoe
DEMAND
ENERGY TRANSFORMATION AND LOSSES

1973

1990

2000

2010

2018

2019

2020E

Input (Mtoe)

36.7

98.3

127.5

137.1

131.1

127.8

..

Output (Mtoe)

15.7

35.9

46.0

48.5

49.6

48.7

45.4

Output (TWh)

182.5

417.2

535.2

564.5

576.4

566.2

527.9

Coal

19.7

8.5

5.8

4.7

1.8

1.0

1.0

Peat

-

-

-

-

-

-

-

40.2

2.1

1.3

1.0

1.0

1.0

1.0
6.7

ELECTRICITY GENERATION8

Output shares (%)

OilNatural gas

5.5

0.7

2.2

4.2

5.3

6.9

Biofuels and waste 1

0.1

0.4

0.7

1.1

1.9

2.0

2.1

Nuclear

8.1

75.3

77.6

75.9

71.6

70.5

67.0

Hydro

26.1

12.9

12.4

11.1

11.3

10.1

11.8

Wind

-

-

-

1.8

5.0

6.1

7.7

Geothermal

-

-

-

-

-

-

-

Solar/other 2

0.3

0.1

0.1

0.2

2.1

2.3

2.8

TOTAL LOSSES

38.1

77.6

94.9

102.0

92.6

89.5

-0.1

Electricity and heat generation9

20.8

62.0

78.3

85.1

78.6

76.2

..

Other transformation

5.3

2.2

1.8

2.6

3.4

3.1

-0.1

Own use and transmission/distribution losses

12.1

13.4

14.8

14.4

10.6

10.2

..

Statistical differences

-0.2

4.7

-4.6

1.1

2.3

2.9

..

INDICATORS

1973

1990

2000

2010

2018

2019

2020E

ANNEXESANNEXESof which:

GDP (billion 2015 USD)

1065.91

1661.092046.502317.57

2569.462616.812411.26

Population (millions)

53.33

58.26

60.90

65.01

67.27

67.46

67.65

TES/GDP (toe/1000 USD)10
Energy production/TES

0.17

0.13

0.12

0.11

0.10

0.09

0.09

0.25

0.50

0.52

0.52

0.55

0.54

0.55

Per capita TES (toe/capita)

3.38

3.84

4.13

4.04

3.66

3.59

3.22

Oil supply/GDP (toe/1000 USD)10

0.11

0.05

0.04

0.03

0.03

0.03

0.03

TFC/GDP (toe/1000 USD)10

0.13

0.09

0.08

0.07

0.06

0.06

..

Per capita TFC (toe/capita)

2.67

2.43

2.65

2.46

2.25

2.22

..

CO2 emissions from fuel combustion (MtCO2)11

474.4

345.4

364.7

340.1

300.6

293.9

..

CO2 emissions from bunkers (MtCO2)11

22.7

17.3

24.2

23.9

23.6

23.7

..

GROWTH RATES (% per year)

73-90

90-00

00-10

10-17

17-18

18-19

19-20

TES

1.3

1.2

0.4

-0.9

-0.5

-1.6

-10.2

Coal

-2.2

-2.9

-2.2

-2.6

-8.0

-19.8

-25.7

Peat

-

-

-

-

-

-

-

Oil

-2.1

-0.2

-0.7

-0.7

-3.4

0.3

-13.3

Natural gas

3.9

3.2

1.8

-1.4

-4.3

1.9

-6.9

Biofuels and waste1

0.7

-0.2

3.8

1.6

0.6

1.4

-6.5
-11.3

Nuclear

19.7

2.8

0.3

-1.0

3.7

-3.4

Hydro

0.7

2.1

-0.6

-3.2

30.2

-12.6

9.3

Wind

-

-

71.0

13.8

16.2

21.4

17.2

Geothermal

26.6

1.4

3.3

13.4

2.8

5.7

-

Solar/other2

2.0

-0.3

9.4

30.8

12.1

10.6

9.3

TFC

-0.0

1.3

-0.1

-0.4

-2.3

-0.9

..

Electricity consumption

4.3

2.4

1.4

-0.2

-0.5

-1.2

..

Energy production

5.6

1.6

0.4

-0.7

4.6

-2.8

-8.9

Net oil imports

-2.4

0.2

-0.8

-0.5

-5.0

1.1

-12.9

GDP

2.6

2.1

1.3

1.2

1.9

1.8

-7.9

TES/GDP

-1.3

-0.9

-0.8

-2.0

-2.2

-3.3

-2.6

TFC/GDP

-2.6

-0.8

-1.3

-1.6

-4.1

-2.7

..

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0 is negligible, - is nil, .. is not available, x is not applicable. Please note: rounding may cause totals to differ from the sum of the elements.

ANNEXES

Footnotes to energy balances and key statistical data
1

Biofuels and waste comprise solid biofuels, liquid biofuels, biogases, industrial waste and municipal waste.

Data are often based on partial surveys and may not be comparable between countries.
2

Other includes tide, wave and ambient heat used in heat pumps.

3

In addition to coal, oil, natural gas and electricity, total net imports also include biofuels.

4

Excludes international marine bunkers and international aviation bunkers.

5

Total supply of electricity represents net trade. A negative number in the share of TES indicates that exports
are greater than imports.

6

Industry includes non-energy use.

7

Other includes residential, commercial and public services, agriculture/forestry, fishing, and other non-specified.

8

Inputs to electricity generation include inputs to electricity, co-generation and heat plants. Output refers only toelectricity generation.

9

Losses arising in the production of electricity and heat at main activity producer utilities and autoproducers. For
non-fossil fuel electricity generation, theoretical losses are shown based on plant efficiencies of approximately
33% for nuclear; 10% for geothermal; and 100% for hydro, wind and solar photovoltaic.

10

Tonnes of oil equivalent per thousand US dollars at 2015 prices and exchange rates.

11“CO emissions from fuel combustion” have been estimated using the IPCC Tier I Sectoral Approach2
methodology from the 2006 IPCC Guidelines. Emissions from international marine and aviation bunkers are

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not included in national totals.

ANNEX D: International Energy Agency “Shared Goals”
The member countries* of the International Energy Agency (IEA) seek to create conditions in which theenergy sectors of their economies can make the fullest possible contribution to sustainable economic
development and to the well-being of their people and of the environment. In formulating energy policies,
the establishment of free and open markets is a fundamental point of departure, though energy security
and environmental protection need to be given particular emphasis by governments. IEA countries

ANNEXESANNEXES

recognise the significance of increasing global interdependence in energy. They therefore seek topromote the effective operation of international energy markets and encourage dialogue with allparticipants. In order to secure their objectives, member countries therefore aim to create a policy
framework consistent with the following goals:
1. Diversity, efficiency and flexibility within the energy sector are basic conditions for longer term
energy security: the fuels used within and across sectors and the sources of those fuels should be as
diverse as practicable. Non-fossil fuels, particularly nuclear and hydro power, make a substantial
contribution to the energy supply diversity of IEA countries as a group.
2. Energy systems should have the ability to respond promptly and flexibly to energy emergencies.
In some cases, this requires collective mechanisms and action: IEA countries co-operate through the
Agency in responding jointly to oil supply emergencies.
3. The environmentally sustainable provision and use of energy are central to the achievement ofthese Shared Goals. Decision makers should seek to minimise the adverse environmental impacts ofenergy activities, just as environmental decisions should take account of the energy consequences.
Government interventions should respect the polluter-pays principle where practicable.
4. More environmentally acceptable energy sources need to be encouraged and developed. Cleanand efficient use of fossil fuels is essential. The development of economic non-fossil sources is also apriority. A number of IEA member countries wish to retain and improve the nuclear option for the future,at the highest available safety standards, because nuclear energy does not emit carbon dioxide.
Renewable sources will also have an increasingly important contribution to make.
5. Improved energy efficiency can promote both environmental protection and energy security in a
cost-effective manner. There are significant opportunities for greater energy efficiency at all stages of theenergy cycle, from production to consumption. Strong efforts by governments and all energy users areneeded to realise these opportunities.
6. Continued research, development and market deployment of new and improved energy
technologies make a critical contribution to achieving the objectives outlined above. Energy technology
policies should complement broader energy policies. International co-operation in the development anddissemination of energy technologies, including industry participation and co-operation with non-member

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IEA. All rights reserved.

countries, should be encouraged.

ANNEXES

7. Undistorted energy prices enable markets to work efficiently. Energy prices should not be held
artificially below the costs of supply to promote social or industrial goals. To the extent necessary andpracticable, the environmental costs of energy production and use should be reflected in prices.
8. Free and open trade and a secure framework for investment contribute to efficient energy markets
and energy security. Distortions to energy trade and investment should be avoided.
9. Co-operation among all energy market participants helps to improve information andunderstanding, and encourages the development of efficient, environmentally acceptable and flexible
energy systems and markets worldwide. These are needed to help promote the investment, trade andconfidence necessary to achieve global energy security and environmental objectives.
(The Shared Goals were adopted by IEA ministers at the meeting of 4 June 1993 in Paris, France.)

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IEA. All rights reserved.

* Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal,
the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

ANNEX E: Glossary and list of abbreviations
In this report, abbreviations and acronyms are substituted for a number of terms used within theInternational Energy Agency. While these terms generally have been written out on first mention, thisglossary provides a quick and central reference for the abbreviations used.

Acronyms and abbreviations
ADEME
ARENH

ANNEXESANNEXESAgency for Ecological Transition
regulated access to historical nuclear electricity tariff
accès régulé à l’électricité nucléaire historique

CCE

climate energy contribution

CEA

Alternative Energies and Atomic Energy Commission

CEEenergy-saving certificate
certificat d’économies d’énergie

CIR

research tax credit

CITE

energy transition tax credit
crédit d’impôt pour la transition énergétique

CNRS

National Centre for Scientific Research

CO2carbon dioxide

CPSSP

Comité Professionnel des Stocks Stratégiques Pétroliers

CRE

Energy Regulatory Commission

DGEC

Directorate for Energy and Climate Change

DNSH

do no significant harmDPEenergy performance diagnostic
diagnostic de performance énergétique

DSO

distribution system operator

EC

European Commission

EDF

Électricité de France

EED

Energy Efficiency Directive

ELD

local distribution company

EPR

European power reactor

ETS

Emissions Trading System

EU

European Union

EUR

euro

EV

electric vehicles

FEC

final energy consumptionGDPgross domestic product

GHG

greenhouse gas

HCCHigh Council on Climate

IEA

International Energy Agency

ITC

tax on domestic consumption of energy

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IEA. All rights reserved.

entreprise locale de distribution

ANNEXES

LCOE

levelised cost of electricity

LNG

liquefied natural gas

LOLE

loss of load expectation

LULUCFland use, land-use change and forestry

MI

Mission Innovation

MTE

Ministry of the Ecological Transition

NEA

Nuclear Energy Agency

NECP

National Energy and Climate Plan

NESO

National Emergency Strategy Organisation

NOX

nitrogen oxide

OECD

Organisation for Economic Co-operation and Development

PCAET

territorial climate-air-energy plans
plans climat-air-énergie territoriaux

PEC

primary energy consumption

PIA

Investments for the Future Programmes

PNACC

National Climate Change Adaptation Plan

PPE

multiannual energy plan
programmation pluriannuelle de l’énergie

PPP

purchasing power parity

PVphotovoltaic

PWR

pressurised water reactor

R&D

research and development

RD&D

research, development and demonstration

SAGESS

Société Anonyme de Gestion des Stocks de Sécurité

SME

small and medium-sized enterprise

SNBC

National Low-Carbon Strategy
Stratégie Nationale Bas-Carbone

SNRE

National Strategy for Energy Research
Stratégie nationale de recherche énergétique

SRADDET regional

plans

for

spatialplanning,

sustainable

development

andequality

TES

total energy supply

TFC

total final consumption

TFEC

total final energy consumption

TICFE

final consumption of electricity

TIRIB

tax on the incorporation of biofuels

TPES

total primary energy supply

TRF

Trading Region France

TSO

transmission system operator

USD

United States dollar

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schémas régionaux d’aménagement, de développement durable et d’égalité des territoires

ANNEXES

bcm

billion cubic metresblnbillionCO2-eqcarbon dioxide equivalentg CO2gramme of carbon dioxide

GW

gigawatt

GWh

gigawatt hour

Hz

Hertz

kb/d

thousand barrels per daykg

kilogrammekmkilometre

km2

square kilometrekVkilovoltkWkilowatt

kW ekilowatt electricalkWhkilowatt hourkWpkilowatt peak

L

litre

mcm

million cubic metresMt

million tonnes

Mt CO2

million tonnes carbon dioxide

ANNEXES

Units of measure

Mtoe

million tonnes of oil equivalentMWmegawattMWhmegawatt hourMWpmegawatt peakMW thmegawatt thermal

PJ

petajoule

t

tonne

toe

tonne of oil equivalentTWhterawatt hour

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IEA. All rights reserved.

Mt CO2-eq million tonnes carbon dioxide equivalentThis publication reflects the views of the IEA Secretariat but does not necessarily reflect those ofindividual IEA member countries. The IEA makes no representation or warranty, express or implied, inrespect of the publication’s contents (including its completeness or accuracy) and shall not be
responsible for any use of, or reliance on, the publication.
Unless otherwise indicated, all material presented in figures and tables is derived from IEA data andanalysis.
This publication and any map included herein are without prejudice to the status of or sovereignty
over any territory, to the delimitation of international frontiers and boundaries and to the name of any
territory, city or area.
IEA. All rights reserved.
IEA Publications
International Energy Agency
Website: www.iea.org
Contact information: www.iea.org/about/contact
Typeset in France by IEA - November 2021
Cover design: IEA

France 2021

Energy Policy Review
The International Energy Agency (IEA) regularly conducts in-depth peer reviews of the energy
policies of its member countries. This process supports energy policy development andencourages the exchange of international best practices and experiences.
In 2019, France put its target to reach net zero emissions by 2050 into law and updated its
energy transition framework the following year with a new National Low-Carbon Strategy and10-year energy plan. However, France’s energy transition has experienced significant delays,
and implementation remains challenging despite the many reforms underway. Moreover,new European Union climate goals will compel the French government to upgrade its 2030
targets and track progress more stringently.
For decades, French power generation has produced a relatively low level of carbon dioxide
emissions compared with similar economies, owing to the significant share of nuclear
energy. However, the country’s nuclear fleet is ageing, and overall emissions are risingbecause energy consumption across the economy as a whole remains dominated by fossil
fuels, notably in transport. Maintaining low-carbon power generation as a base for further
decarbonisation and electrification requires timely decisions on the future electricity mix andaccelerated investments.
France’s economic recovery plan from the Covid-19 crisis and its 2030 investment plan will
help accelerate its energy transition by driving progress in sustainable mobility, building
retrofits and hydrogen.
This report includes a series of recommendations to support France’s efforts to tackle thesechallenges and to meet its energy and climate goals.