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French political parties battle over nuclear electricity generation

06 Sep 2012 18:49:34 | edem

French minister of industrial renewal, Arnaud Montebourg, last week described nuclear electricity as an industry of the future and a tremendous asset, provoking inflamed reactions from members of the Europe-Ecologie-les-Verts (EELV), France's grouping of green parties, who described the statement as a "provocation".

Since then, it has been debated whether Montebourg's position calls into question the commitment made by France's socialist President François Hollande during his election campaign to reduce dependence on nuclear energy.

According to the deal made between the greens and the socialist party, France will reduce nuclear energy's contribution to electricity generation from 75% to 50% by 2025, which would mean shutting down 24 nuclear reactors (see EDEM 3 May 2012). Currently, only the oldest French nuclear plant, EDF's 1.8GW Fessenheim, is scheduled to be taken off line. This should happen some time during François Hollande's mandate, which ends in 2017, but more specific plans have not been made.

Renewable obstacles

The French government is committed to deriving 23% of its total energy consumption from renewable resources by 2020, according to targets outlined in the National Action Plan submitted to the EU.

But there are also powerful groups vying for influence on both sides of the debate over renewable energy. Lobbies against wind power are frequently in France's courts, where they often lose, but the litigation, along with the economic crisis and reduced access to bank credit, creates further delays that slow down the construction of new wind power facilities.

As a result, growth in new installations of wind power generation facilities in France amounted to just 215MW in the first three months of 2012, down from 340MW in the same period of the previous year, according to data from ERDF, EDF's distribution subsidiary (see EDEM 29 August 2012).

Competing neighbours

Higher electricity bills are the obvious consequence of scaling down reliance on nuclear power. The government has not announced specific plans as to when it would close down nuclear reactors. Apart from Fessenheim, there are no other scheduled closures, and with construction of a new reactor at Flamanville of greater capacity than Fessenheim still underway, the net result is still an increase in nuclear capacity. With plentiful nuclear power, France is in a uniquely favourable position that allows the country's industrial sector and its population to benefit from reduced energy costs.

Allowing energy prices to rise in France would be a missed opportunity to gain competitiveness, particularly as Germany's withdrawal from nuclear energy generation is set to increase the country's electricity price by 20% by 2020, according to forecasts from Germany's energy agency DENA.

Bad timing

But Montebourg's comments were also politically badly timed as they were made in the run up to an important ecological summit to be held later this month, a source told ICIS on Tuesday.

At this summit, France's politicians will discuss the introduction of a capacity mechanism that would oblige electricity suppliers to share the burden of peak demand, so that EDF would no longer be solely responsible for this. French grid operator RTE published a study on this mechanism two years ago, but specific decisions have yet to be made.

The ecology summit will also provide a forum for discussing the ongoing legal action undertaken by France's anti-wind-power lobby at the Court of Justice of the EU. Reassurances of continued support for renewable electricity generation have been made recently by the ministry of sustainable development.

Juggling issues

According to another source, Montebourg's comments should be understood from the perspective of his involvement in France's powerful pro-nuclear lobby. At the heart of the debate surrounding continued dependence on the nuclear energy industry are two issues: labour and the environment. EDF, whose payroll includes a significant percentage of France's active population, has an influential trade union that wields some power among the ranks of the Socialist Party, where Montebourg's allegiances lie. This means the politics surrounding any decisions to do with closing down nuclear reactors is slow and hesitant.

Public opinion in France tends to look favourably on nuclear power generation. According to one source: "Most people just don't really think about it. When accidents like Japan's Fukushima meltdown in March 2011 happen, people think similar problems would not occur in France where safety standards are higher. When asked whether they support nuclear power, about 60% may say they don't, but then only 30% say they would be willing to pay more for electricity."

A rock or a hard place

Montebourg's comments also signalled to the greens that a choice needs to be made. The green party has been vocal in condemning not only nuclear power but also shale gas. With neither of these resources making significant contributions to France's energy mix, the country's energy costs could become unsustainably high over coming years.

Closing down nuclear facilities and increasing energy costs is also particularly sensitive because of the economic crisis, and doubts remain about whether Hollande will go ahead with the deal made with the Greens as this could amount to political suicide, a French Energy analyst told ICIS on Wednesday.

Mutual support

As one of the objectives of Montebourg's role is to reduce factory closures, his comments could be seen as support for EDF as part of a strategy to keep national industry healthy by providing lower energy costs.

"Traditionally in France factories are kept open by providing favourable energy costs. The government supports EDF by proving assurances of the ongoing importance of the nuclear power industry, and, in turn, EDF will be expected to give special deals to special customers," one source commented.

But not everyone agrees that this strategy will continue to be applied in the future. "We are trying to move away from the old system of supporting industry by giving cheaper energy, with an independent energy regulator the industry is now trying to move towards greater accountability and transparency," another source said. BM

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