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France seen turning to renewables in policy shake-up

Date: 14-Sep-12
Country: FRANCE
Author: Muriel Boselli

France's government begins a review of the world's most nuclear-dependent country's energy policy on Friday, strongly in support of its small and ailing renewables sector.

Ministers, NGOs, unions, industries, parliamentarians and consumers will converge for a two-day conference to agree on how to conduct a six-month national debate that will seek to reshape the way energy is produced, consumed and taxed in France.

Its new Socialist government is expected to announce immediate measures to help the crisis-hit renewable energy sector - which employs 100,000 people - as part of its battle to tackle soaring unemployment.

"There are businesses which are struggling and we can today save jobs," said a senior official at the energy ministry, who declined to be named. "Our concern is the notion of ecological patriotism, which is to ensure that support to the sector actually translates into jobs in France."

France's renewable energy lobby reckons the sector could generate 225,000 jobs by 2020 with investments totaling 80 billion euros, provided production targets are met.

In 2011, renewable energy revenues in France reached 10 billion euros ($12.89 billion), puny when compared to the $257 billion worldwide.

The conference is a follow-up to a series of political debates under former President Nicolas Sarkozy in 2007 - dubbed the Grenelle de l'environnement - that set ambitious goals to raise the share of green sources in France's energy mix and cut CO2 emissions.

But the economic crisis, a speculative bubble in the solar sector that led to dwindling feed-in tariffs, and increasing red tape in the wind power industry, have slowed down growth in renewable energies over the past two years.

IMPORTANT MEASURES

Renewable energy makes up 13 percent of the energy mix, well below the 23-percent target set by Sarkozy for 2020. Nuclear power still represents 78 percent of the electricity mix, wind power stands at 2 percent and solar power less than 0.5 percent.

While President Francois Hollande has pledged to cut France's reliance on nuclear power to 50 percent by 2025, Industry Minister Arnaud Montebourg has described it as a "promising sector." Low electricity bills have become essential to France's strategy to regain lost competitiveness.

One key measure that could be announced this weekend is a second tender to build offshore wind farms, a sector where France massively lags neighbors such as Britain, an industry source told Reuters this week.

Another keenly awaited move is whether the government will temper a slowdown in the drop of feed-in tariff for solar power. The tariffs are paid by state-controlled utility EDF and consumers to subsidize renewable energy sources.

The struggling sector hopes the government will agree to limit the drop to 10 percent per year instead of per quarter.

Also a thorny issue for the wind power sector is the urgent need to cut red tape, which the industry says has led to 1,000 job losses. The gap between submitting a request to build a wind farm and its commissioning could be as many as 7 years.

The government could also decide to tax kerosene for internal flights to generate income and to set a more ecological taxation system, sources taking part in the debate told Reuters.

($1 = 0.7759 euros)

(Additional reporting by Marion Douet; editing by Caroline Jacobs and James Jukwey)

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