Lewes, DE -- (ReleaseWire) -- 07/28/2014 -- The government is taking steps to reduce France's dependence upon nuclear power and had been expected to adopt a law to determine how to do this. This follows on from President Hollande's electoral promise to curb the use of nuclear power. However, non-government bodies, such as the Renewable Energy Syndicate, believe that the government is not moving fast enough to meet its target - that 50% of electricity is generated by non-nuclear sources in 2025. The bill presented in June by Energy and Environment Minister Ségolène Royal designed to boost renewable sources suggests nuclear power production will remain capped at 63.2GW, the current levels.
The bill suggests the 50% target will be achieved solely with an inc rease in renewable energy capacity. Decisions to close reactors will be decided at later dates. The bill's lack of a detailed roadmap to nuclear plants closure confirms that the government's position on nuclear energy continues to be relatively ambiguous, and that President Francois Hollande might backtrack on his promise to reduce the share of nuclear energy to 50% by 2025. So what are the alternatives to nuclear power? Investors are turning away from gas - hydraulic fracturing for shale gas is off the agenda, and problems with LNG supply from Algeria in late 2013, and rising coal imports limit the opportunities here. Whether or not renewable energy can take advantage of the opportunities for investment remains to be seen.
BMI estimates that French power generation in 2013 climbed to 541.9 terawatt hours (TWh), representing year-on-year (y-o-y) growth of 0.6%. Overall thermal generation shrunk by an estimated 0.7% y-oy, while hydroelectric generation is estimated to have decreased by 0.1%. BMI estimates that the use of non-hydro renewables grew by 6.3% in 2013.
Key Trends And Developments
>> The French government agreed to the introduction of a carbon tax from January 2014. The government aims to raise EUR4bn from the tax by 2016 to be invested in renewable energy development.
>> The ban on hydraulic fracturing for shale gas continues in place. In October 2013, a constitutional court ruled that the ban on fracking continues in place, despite gas companies' protests.
>> Regulators are considering plans for an electricity interconnection between the UK and France. Dubbed ElecLink, the 1,000MW link will come into operation in 2016, if approved. Their current proposal to charge levies on revenues rather than on profits is however posing serious threats to the project. Star Capital and Groupe Eurotunnel, holding respectively 51% and 49% of ElecLink, consider the regulators' proposal to add excessive risk to the venture and are threatening to pull the plug on the project. On the 9th of April Ofgem and CRE, respectively Great Britain's and France's energy regulators, have approved a partial exemption under article 17 of Regulation (EC) 714/2009. This exemption indicates that the project has a high chance of moving forward. No official statement by ElecLink has been yet released.
>> On April 29, several major media sources reported that French engineering group Alstom had accepted a cash offer of EUR12.4bn from US-based General Electric (GE) for its energy unit. This announcement comes just two days after Alstom's German rival Siemens had submitted a letter to Alstom's board, stating its intention to intervene in the acquisition. On June 16th Siemens-Mitsubishi Heavy Industries submitted a counterproposal of EUR14.2bn. Alstom's energy business accounted for just over 70% (or EUR15bn) of the company's global revenue in FY2013. This deal is contingent on the approval of the French government, appearing reluctant to leave in foreign hands strategic assets in nuclear power provision and rail transportation. On June 17th the government announced that both bidders should come up with better offers.
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