COUNTRY PROFILE | FRANCE
Seeking nuclear stability in France
France’s nuclear fleet is expected to make a much larger contribution to meeting Europe’s power needs this winter than it did the last. Can the return of its reactors provide the stability France needs to achieve its nuclear ambitions?
CAN EUROPE COME TO AN agreement on new nuclear? There has been a split in the bloc for decades between the technology’s supporters and its opponents. Now, negotiators are searching for agreement on a new market design and support for nuclear is still among the key areas of disagreement. It splits the bloc’s central and largest countries: in France, President Emanuel Macron wants the first of a new fleet of six reactors in operation by 2035 and eight more to follow. Neighbouring Germany shut down its last nuclear plant last year but the move was ill-timed. It coincided with the loss of Russian gas supplies – excluded by both sanctions and a destroyed pipeline – which meant Germany instead relied heavily on its remaining coal fleet, which would otherwise have been under more pressure to close to limit carbon dioxide emissions. Despite the nuclear shutdown, Germany’s continued use of coal means its power price is around half that of France. FT energy correspondent Tom Wilson described the two
countries as having “Radically different approaches to energy policy, with Germany following a more market-led approach and France favouring state-driven grand plans”. But the difference is not that simple: it is hard to see that Germany, which led the renewables expansion with government-mandated feed-in tariffs and closed its nuclear plants by Federal dictat, as wholly market led. But it is the French government plan that has opened fault lines in discussions over new energy market rules that would span the bloc’s so-called Internal Energy Market.
France wants to support its new reactor fleet via
contracts for difference (CFDs), which would give EDF a guaranteed price for the power sold from new units. Under CFDs the price realised for its power would be ‘topped up’ by consumers when the market price was low and the company would pay back any excess if the market price was above the CFD’s so-called ‘reference price’. The value of the CFD to a developer and to government is that it gives a predictable revenue stream. In the EU, the use of such mechanisms has to be approved by the bloc’s competition authorities. Nonetheless, previous legislation enables the mechanism to be used for renewable energy and generally contracts are awarded by a competitive process, which the competition authorities accept drives down the cost to the consumer. France would not be the first European country to use the CFD mechanism to support nuclear either. For example, the UK has such an agreement in place for its Hinkley Point C project, still under construction. And, although the UK has now left the EU the contract was cleared under state aid rules while it was still a member. Germany may be brought to accept the nuclear CFD but
in return it is likely to seek competition authority clearance to provide support on the demand side, subsidising power prices for its industry. However, the concern over France’s plan is broader than the unresolved question over whether the EU should support nuclear. Its opponents argue that CFDs bypass the
Above left: Learnings from the EPR under construction at Flamanville will be applied to the EPR2 design
that will form the next generation of French reactors Source: EDF Above right: French president Emanuel Macron wants the first of a new fleet of six reactors in operation by 2035 Photo credit: Frederic Legrand - COMEO/
Shutterstock.com
38 | November 2023 |
www.neimagazine.com
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