The International Energy Agency has released a report titled, “France 2021: Energy Policy Review” which provides an in-depth peer review of the energy policies of France. This process supports energy policy development and encourages the exchange of international best practices and experiences.

REGlobal presents the key findings and the detailed analysis on the state of renewable energy and its progress in France as presented in the report…

Key Findings:

  • Increased climate focus. The 2019 Energy and Climate Law legislated carbon neutrality by 2050 and a tighter emissions reduction pathway in France. In 2020, the government updated the SNBC and the PPE towards the goal of carbon neutrality by 2050. The High Climate Council was created in 2019. France has made progress in strengthening building codes, labelling and the application of energy audits for enterprises and has enhanced measures to support improved efficiency of the mobility system.
  • Investment plan laid out for renewables. In October 2021, France announced a EUR 30 billion investment plan for 2030, which targets French industrial development in the energy, automotive and space sectors, including EUR 8 billion dedicated to energy technology investment in the decarbonisation of industry, in hydrogen and small modular reactors; EUR 4 billion for electric and plug-in hybrid vehicles.
  • Accelerated job creation can be expected. 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 the creation of 300,000-500,000 new jobs by 2030 and 800 000 by 2050, boosted by investments in transport, buildings and energy.
  • France’s Recovery Plan is a historic plan for accelerating the implementation of energy and climate targets. The plan is 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, out of a total of EUR 100 billion of the funding under the French Recovery Plan to sustainable recovery objectives: to support transport (EUR 20 billion), the renovation of buildings (EUR 6 billion), technology innovation in nuclear (EUR 470 million) and France’s hydrogen strategy (EUR 7 billion).
  • Slow progress of France’s energy transition. Despite progress in upgrading its energy transition framework, France is lagging behind with implementation. It has not reached its 2020 targets on energy efficiency and renewable energy. And its 2030 emissions targets, adopted in 2015, remain unchanged; the second carbon budget was revised upwards in 2020, lowering the effort required up to 2023.
  • Renewable energy trends have been positive but slow. Over the past decade, wind and solar photovoltaic (PV) electricity generation have increased, driving the share of renewables in electricity generation from 14 per cent in 2010 up to 23.4 per cent in 2020. Hydropower represents half of renewable electricity generation. France aims at a share of 23 per cent renewables in gross final energy consumption by 2020, but had 17.2 per cent in 2019 and 19.1 per cent in 2020. The gap with the 2023 targets under the PPE is massive: France would need to add 6.4 GW of wind capacity and almost double the solar PV capacity in just three years.
  • Factors hampering renewables growth are multifold. The delivery gap is mainly due to the lack of administrative staff and lengthy permitting procedures in France. 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 of future 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 pace of deployment. 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.
  • Prioritising implementation is key. Over the past five years, the government has revised its Energy and Climate Law twice and set a very high number of targets for fuels and sectors. 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 and execution is critical for France. 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 across government. Several steps need to be envisaged to make a step change in the implementation of climate policy.
  • Clear milestones for net zero and targets for 2030. Among G7 members, France has the lowest value of CO2 emission per capita in absolute terms. It has the least stringent goal in relative terms with a target of a 40 per cent reduction of greenhouse gas emissions by 2030. 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 per cent by 2030 and respond to the EU Green Deal and the related Fit-for-55 per cent package.
  • Electricity market reforms. Since the IEA’s last review in 2015, energy markets in France have seen a rise in competition, 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 more competitive electricity retail market is slowly emerging, with a large number of electricity suppliers offering market deals to French consumers, some below regulated tariffs. France maintains regulated tariffs which are offered by Électricité de France (EDF). The government does not have plans to phase out regulated tariffs for residential consumers.
  • France is making hydrogen a top priority. With its national hydrogen strategy that focuses on industry and heavy-duty transport, underpinned by EUR 7 billion in public funding. The government focuses on developing an industry and French expertise in a new technology. The government may use the opportunities from regional hydrogen hubs across Europe to keep up the important momentum for the development of the technology in France and boost 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. This was done with the merger of the gas exchanges in 2018 and the latest reform of gas storage. Maintaining oil and gas security remains a major challenge, as the transition accelerates. France’s industry is already investing in bio-refining and low-carbon fuel supply chains, based on ambitious targets for bio-methane, biogas, hydrogen and second-generation biofuels. The planned strategy on oil and gas in the transition is another welcome step.
  • Carbon price signals remain important for clean energy investments. The EU Green Deal and its Fit-for-55 per cent package are expected to strengthen the carbon price signal. 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. France is the first country to implement a green budgeting approach. There is little room for further tax increases without a new approach to managing the cost of the transition, e.g. by supporting reskilling, employment, and the transition of communities and workers.

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.

To tackle these issues, the French government extended the validity of administrative authorizations and staggered the schedule of tenders. Additional time was granted for the commissioning 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 tariff or 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 for this extension, due to the importance for security of supply of bigger projects. 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.

Targeted promotion of renewable electricity capacity

According to IEA data, between 2010 and 2020, renewable electricity production in France increased from 14 per cent to 24 per cent of total power generation, thanks to growing generation from solar, wind and bioenergy. Generation from hydro formed a strong basis, providing almost half of renewable electricity generation in 2020, with fluctuations between 45 terawatt hours (TWh) (2011) and 72 TWh (2013), depending on water 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 from bioenergy.

A five to six-fold increase in solar PV capacity and a 2.5-fold increase in wind capacity by 2028, from 2017 levels has been envisaged. 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 in three years. The first offshore wind farm in France will be commissioned in 2022. Only one floating prototype of 2 MW is in operation.

Trends in renewable energy by sector

IEA data show a positive trend: the share of renewables in France’s total final energy consumption was 15.8 per cent in 2019, a 31 per cent increase since 2009. The highest penetration of renewables is in the industry sector, where renewable sources meet 24 per cent 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 per cent of energy consumption. In both cases, renewables consist mainly of solid biomass and renewable electricity. Renewable heating and cooling are mainly provided by bioenergy (and heat pumps), with small contributions from solar and geothermal. Biofuels cover most of the renewable energy used in the transport sector. Renewables provide 7 per cent of the energy needs in transport.

Renewables in transport

In 2019, renewables accounted for 7.4 per cent of France’s transport demand. 95 per cent of the demand was accounted for by biofuels blended with road transportation fuels and 5 per cent by renewable electricity. Based on the Eurostat definition, which uses multiplication factors for advanced biofuels and renewable electricity, the share of renewables in transport reached 9.2 per cent in 2019. Renewables in transport consisted mainly of biofuels, and has increased in recent years, with a growing contribution from bioethanol.

Renewable electricity support schemes

France promotes renewable electricity through feed-in tariffs for small-scale renewable plants and feed-in premiums issued in tenders for large-scale facilities. Large-scale tenders have been organised for offshore wind, onshore wind, solar rooftop and biomass co-generation projects. The new call for a tenders for 2021/26 was approved on 27 July 2021 by the European Commission (onshore renewables with a budgetary commitment up to EUR 31 billion over 20 years). The Commission also approved a EUR 5.7 billion 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 renewable energy support. Until 2016, renewable energy support was financed by the consumer through public service charges on electricity. In 2010, the government declared a four month moratorium on new solar PV projects to change to a new feed-in tariff framework. 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 from 2017 onwards, only through the domestic consumption tax on polluting energy products (oil and coal).

In 2021, the budget support for renewable energies accounted for more than EUR 6 billion, including EUR 5.7 billion for electricity and EUR 544 million for bio-methane injection. The total cost of renewable energy support committed over the period 2000-19 amounts to EUR 140-154 billion.

Recommendations for the Government of France

  • 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 the two five-year energy investment plans.
  • Support the tracking of tender results against targets and increase financial and human resources commensurate to the distance to the 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 consistent regional targets (regional plans for spatial planning, sustainable development and equality) 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.
  • Ensure a swifter and more harmonised application of permitting rules for renewable electricity projects across decentralised state administrative services, underpinned by increased human resources, strong monitoring and an accountability framework against regional targets.
  • 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 sustainable aviation fuels and maritime low-carbon fuels.

The full report can be accessed by clicking here