France's nuclear power sector is not delivering - EURACTIV

France’s nuclear power sector is not delivering - EURACTIV.com
By Philippe Girard Est. 5min 26-09-2023 Content-Type: Opinion Opinion Advocates for ideas and draws conclusions based on the author/producer’s interpretation of facts and data. File photo. A road sign stands in front of the nuclear power plant in Fessenheim, France, 12 June 2018. The EDF-operated plant is the oldest nuclear power plant that is still in operation in France. [EPA-EFE/PATRICK SEEGER] EURACTIV is part of the Trust Project >>> Print Email Facebook Twitter LinkedIn WhatsApp Telegram The dominant player in France’s energy sector, Electricité de France (EDF), must leave room for smaller energy providers who offer an innovative alternative to the national nuclear energy champion model, writes Philippe Girard. Philippe Girard is CEO of E-PANGO and an expert in energy and electricity markets. As the International Energy Agency has recently warned, Europe could face a very difficult winter this year despite coping impressively with the challenges of sky-high natural gas prices that followed Russia’s full-scale invasion of Ukraine. Surprisingly, France needs to prepare to face another energy crisis this winter. France’s nuclear energy sector has been hailed as the best in Europe, if not the world, for decades. France’s once robust nuclear sector, responsible for 70% of its energy production, should have positioned the country as a dominant force in Europe’s energy landscape. However, in 2022, France was forced to import electricity from Germany, Spain and the UK when a significant proportion of France’s nuclear reactors had to close for unscheduled maintenance. How did this happen? Many analysts attribute France’s current energy crisis to a combination of external factors such as the COVID-19 pandemic, climate change, inconsistent government policies and plain bad luck. Yet, pinning this crisis on these factors alone would be a mistake. The story behind France’s energy sector turmoil is intimately linked to the machine behind it all, Electricité de France (EDF), the state-controlled energy company. Years of poor decision-making and mismanagement have eroded the country’s nuclear advantage, resulting in France importing energy rather than exporting it. France’s original investment in nuclear power was a response to the 1973 oil crisis. Until then, a significant portion of France’s electricity supply relied on oil-fired generation. Confronted by the oil shock, policymakers began searching for an alternative energy supply that France could control more easily. Nuclear power emerged as the optimal choice. During the 15 years that followed, France brought into service 56 atomic reactors that allowed it to meet its domestic energy demands and export electricity beyond its borders. For decades, EDF has repeatedly disregarded lawmakers’ calls to invest in storage solutions. For example, in its reports on electricity production, the parliament emphasised the need to build storage capacity four times between 2002 and 2016. Despite these explicit directives, EDF failed to take decisive action in response. Ultimately, EDF’s failure to invest in storage solutions for surplus nuclear capacity has led to inflated electricity prices in both domestic and European markets. Since France’s electricity cannot be stored in significant volumes, generation output must always equal consumption. Any change in demand or generation of electricity at a given point on the transmission network has an immediate impact on the entire system. Yet, instead of investing in storage solutions, EDF has adopted a policy known as modulation, adjusting the output power of nuclear reactors to match electricity consumption exactly. This policy has led to higher operating costs for consumers through higher prices. It has also shortened the life of the nuclear reactors. Experts have repeatedly cautioned against modulation, arguing that the practice is economically and technically not viable since it keeps reactors from achieving maximum efficiency and return on investment. The French authorities must evaluate the impact of modulation on the ageing process of the current set of nuclear reactors and explore the possibilities for increasing their lifespan to 50 or 60 years. In a landscape dominated by EDF, its responsibility must be questioned. By the end of 2022, EDF’s debts had reached a staggering €64.5 billion, making it one of the most heavily indebted companies globally. The full acquisition of EDF by the French State in 2023 was crucial for the company’s survival. Presently, the French government needs to boost EDF’s revenues without imposing higher electricity expenses on consumers. At the same time, it must navigate the delicate path of avoiding prosecution by the European Commission for potential infringements related to illegal state aid and distortion of competition. The importance of preventing one dominant player from having a quasi-monopoly on non-intermittent capacity cannot be understated. In the case of EDF, it has negatively impacted the European and UK electricity markets. Considering the turmoil caused by EDF and its place within the French energy ecosystem, ending EDF’s monopoly on the energy sector by diversifying energy providers and embracing innovation should be the way forward. Smaller energy providers offer an innovative alternative to the national champion model. Consumers will have much to gain from introducing competition in France’s electricity market. Print Email Facebook Twitter LinkedIn WhatsApp Telegram Topics Electricité de France Energy Energy & Environment France monopolies Nuclear nuclear energy