In a strategic move towards bolstering its energy sovereignty, France has become a key player in low-carbon industries, positioning itself as a leader in Europe’s clean-tech supply chain. According to Rystad Energy, France attracts the fourth-highest energy investments in Europe annually, trailing only behind Germany, Norway, and the UK. The anticipated surge in European capital investments in energy, projected at $173 billion for the current year, is fueled by significant spending in solar photovoltaic (25%), onshore wind (23%), and upstream oil and gas (19%). Projections indicate a 13% increase to $196 billion next year, with a particular focus on accelerating activity in low-carbon sectors such as wind, hydrogen, and carbon capture, utilization, and storage (CCUS).
France’s central position in Europe’s power industry and related value chains provides ample opportunities across various energy sectors. Traditionally, the French energy discourse centred on nuclear power versus renewables, but the government is now adopting a diversified approach to boost low-carbon power generation using all available options to meet the rising power demand expected to surge by 14% from 2022 to 2030. The recent challenges in French nuclear power generation underscore the critical need for a reliable low-carbon power system.
To address this, France is working to enhance and expand its nuclear fleet while concurrently unlocking its renewable energy potential. Legislative measures like the Renewable Energy Acceleration Act and the burgeoning solar and offshore wind sectors mark significant strides towards achieving a balanced, decarbonized, yet reliable power supply. This transition not only strengthens France’s energy framework but also positions France as a pivotal player in fortifying Europe’s clean-tech supply chain.
“Europe faces a significant challenge in grid development, where France’s strategic role is increasingly important. The main concern with inadequate and insufficient interconnection capacity is renewable energy curtailment during an oversupply situation, which would threaten producers’ profitability. However, this risk is low in France because of its robust export capacity and diverse power mix. Improvements in France’s grid infrastructure are therefore set to benefit the wider European system costs more than its own as they will address a broader regional need rather than a pressing domestic issue”, said Victor Signes, senior renewables and power analyst, at Rystad Energy.
In 2022, France generated 62% of its power from nuclear reactors, a drop from 68% in 2021 due to maintenance rates at Électricité de France’s (EDF) reactors. With improved maintenance schedules, nuclear power generation is expected to rebound to 321 TWh, although levels may remain lower than pre-shutdown. The French power mix has one of Europe’s lowest shares of electricity generated from fossil fuels, with coal-fired power generation set to be phased out by 2027. Renewables, including hydropower, accounted for 26% of power generation last year and are projected to reach 39% by 2030.
As France commits to carbon neutrality, the integration of batteries becomes imperative, especially in the transportation sector, which contributes nearly 42% to the national carbon footprint. The growing battery supply chain in France, marked by new lithium mines and manufacturing facilities, is expected to reach 100 GWh by 2030. However, Rystad Energy estimates that France will still need to import over 60% of its battery requirements.
Additionally, France has identified hydrogen as a key element in its energy transition, setting ambitious targets for industrial and transport applications. With plans to replace 42% of grey hydrogen used in industry with renewable fuel, France aims to meet its climate goals and expects hydrogen demand to increase to 3.4 million tonnes by 2040. The country has allocated €4 billion for subsidy tenders to advance domestic hydrogen production, supporting both renewable and nuclear electrolysis.