Graph 1: France's world share (%)

Graph 2: Final energy intensity trend (index base 100 in 1990)

Energy intensity measures the energy consumption of the final sectors for the production of a unit of GDP, and may be used to evaluate the effort made by the French with regard to energy control. Between 1982 and 2005, the annual improvement was – 1.1%.

Graph 3: Nuclear electricity generation by country in 2004

Graph 4: Production of renewable energies in the EU countries (2004)
Renewable energy consumption dominated by wood energy and hydro power

Graph 5: Breakdown of consumption of renewable energies in France (2005)

Graph 6: Energy independence trends by energy source

The ratio for energy independance is the primary production divided the primary consumption, by energy or total

Compared with the OECD countries, in 2004, France is in 7th place for CO₂ emissions per inhabitant and occupies 4th place for CO₂ emissions per unit of GDP (emissions from fuel combustion).

Graph 7: Comparison of CO₂ emissions expressed
in tons of carbon per inhabitant (2004).

Graph 8: Comparison of CO₂ emissions per unit of GDP expressed
in tons of carbon per thousand US dollars (2004).

France's energy situation

France is poor in energy resources, in contrast to several European countries which benefit from raw materials (coal in Germany and Spain, oil, gas and coal in the United Kingdom, gas in the Netherlands, hydro in Switzerland, etc.).

Since the end of the 1970s, French coal production has fallen from 40 million tons per year to less than 3 million tons in 2003, mining ending in April 2004 with the closure of the last pit at Creutzwald, in Lorraine.

Up to the end of the 1970s, the natural gas field at Lacq supplied between 6 and 7 million toe of gas per year, contributing up to 15% of France's primary energy production, but this has now fallen to 2%.

Oil production has barely exceeded 3 million toe per year, depending on how interested operators were in investing in exploration-production on French territory, and now stands at less than 1.5 million tons per year, or slightly more than 1% of TPES.

In order to ensure the security of its energy supplies, France's energy policy has given priority to the development of a national energy supply: nuclear energy and renewable energies.

In the 1950s a major dam construction programme was put in place, and a nuclear programme, now comprising 58 reactors, was launched in the 1970s.

France is the world's 7 th largest consumer of energy, with 275 Mtoe in 2004 (source: IEA), behind Germany and Japan. With 4.4 toe consumed per inhabitant, it occupies 18 th place among the OECD countries.

Graph 9: France's energy mix in 1973 and 2004

Until recent years, France's economic growth, rising population, growth in road transport of passengers and goods, and domestic electricity use, together with the requirements of major industrial consumers of energy (steel, chemicals, paper, cement, etc.) have all contributed to a sustained increase in energy consumption. However, this trend is unacceptable for economic and environmental reasons (energy costs, security of supplies, climate change), and the government has therefore been implementing corrective measures.

Graph 10: Final energy consumption trends by sector (161 Mtoe in 2005)

The major principles of energy policy

Faced with an energy context which has undergone profound changes over the last thirty years (substantial technical progress, fluctuation in energy prices, reorganisation of energy markets, emergence of environmental issues), France derives great benefit from the consistency of its energy policy, still organised around four major concerns. At present, French energy policy is defined by the Energy Act of 13 th July 2005 defining energy policy priorities. It is expressed in the form of four major objectives:

1) To contribute to national energy independence and guarantee security of supply

France has very limited energy reserves. In this context, meeting France's energy needs involves a risk that should be managed. In macroeconomic terms, the aim is to limit the exposure of our economy to fluctuations in energy prices, in particular by developing domestic production. In terms of physical supplies, the aim is to ensure the availability of sufficient capacity to cope with the problems of shortages of electricity (capacity and availability of generation plants, transmission quality and interconnection level), gas (management of stocks) and oil (management of security stocks).

2) To ensure competitive energy prices

The price, quality and availability of energy are determining factors in France's attractiveness and thus in the development of employment, particularly in sectors with high energy consumption. French energy policy is therefore designed to guarantee a competitive energy price to our businesses, particularly those facing strong international competition.

3) To protect human health and the environment, in particular by fighting against climate change

Energy production and consumption can have major impacts on the environment, the most important of which are emissions of greenhouse gases, but also the emission of pollutants contributing to the degradation of air quality and the production of radioactive waste. Energy policy should therefore contribute to the control of the dangers of climate change and ensure that the risks of the nuclear sector are properly managed.

4) To guarantee social and territorial cohesion by ensuring access to energy for all

Energy is one of the major necessities of life. It is therefore important that the energy policy provides everyone, and in particular the most deprived, with access to a high quality energy source at a competitive price.

In order to reach these objectives, four principal areas of actions were identified in the energy programme law mentioned above:

• To control energy demand , through a series of incentives and programmes, including an energy saving certificate scheme, standards and regulations, together with tax incentives;
• To diversify sources of energy , by increasing the use of renewable energies, keeping the nuclear option open and, in general, by developing a high-performance energy production infrastructure;
• To increase research into energy, because this is essential in order to meet long-term challenges, for example for bio-energies, fuel cells, clean vehicles, energy-efficient buildings, solar energy, capture and underground storage of CO₂ , 4th-generation nuclear energy;
• To provide methods of transporting and storing energy , adapted to requirements, in particular in order to guarantee the quality of the electricity supply, reinforce the security of the gas and electricity grids and, in general, improve the safety of France's energy supply.

To provide a framework for these decisions, quantitative objectives were laid down by the Energy Act of 13 th July 2005 defining energy policy guidelines:

• A quartering of CO₂ emissions by 2050,
• average reduction of final energy intensity of at least 2% per year from 2015 and of 2.5% from 2015 to 2030,
• production of 10% of energy needs from renewable energy sources by 2010,
• incorporation of bio-fuels and other fuels of renewable origin to a level of 2% in 2006, 5.75% by the end of 2008 and 7% in 2010.

The challenges of French energy policy

• A context of rising prices

These objectives are laid down within a context of energy prices which are constantly rising at high rates. World demand for oil, gas and coal is growing continuously, above all in the emerging and developing countries, whilst reserves are limited and will inevitably be exhausted at some time in the future. Moreover, the present strong demand, particularly in Asia, exerts tension on energy prices which, rising continuously, may endanger the economic development of the importing countries.

• Within an international and European framework

Taking into account the international, and in particular European, dimension creates a new situation to which both economic agents and public authorities must adapt.

The plan of action on climate change, clean energy and sustainable development adopted by the G8 heads of State and Government at the Gleneagles Summit (6-8 July 2005) shows the same concerns, in fact widely shared around the world, according to which it is necessary to save energy and promote “clean” technologies such as renewable energies, nuclear energy and CO₂ capture/storage. This shows clearly the synergy between control of climate change and control of excessively high prices.

For its part, in January 2006 France published a memorandum to “ relaunch European energy policy in a perspective of sustainable development ”. This includes discussion of the need for integrated energy policies (in particular through reinforcement of the predictive analysis of energy supply and demand), for better production and better consumption of energy, for reinforcement of research and development and for strengthening international actions, on both energy and climate.

Mémorandum for revitalising european energy policy Summary of the main proposals

The government takes measures to ensure the long-term security of energy supplies.

With regard to the electricity and gas sector, the public authorities have put in place various instruments to regulate the market so as to ensure the security of electricity supply :

- multiannual objective contracts signed with the operator of the public distribution system (RTE) and with the companies that fulfil public service missions, i.e. Électricité de France (EDF), Gaz de France (GDF) and the other distributors;
- “multiannual programming of investment in production” (PPI) which defines the objectives in terms of breakdown of production capacities by primary energy sources and, if need be, by production technique and geographical area. It should be noted that, in application of the law of 13 th July 2005, mechanisms similar to those of the electricity PPI are being considered for gas and heating.

At European level , a proposal for a directive on the security of electricity supply and investment in infrastructure is under discussion. France backs the approach of developing interconnections and, through its electricity exports, contributes to the overall balance of the European system.

With regard to petroleum products, France meets European Union and International Energy Agency (IEA) obligations on strategic stocks.

To reduce France's energy dependence, it has been decided to promote energy saving and invest in nuclear electricity generation and renewable energies. These energies provide a reliable long-term supply without greenhouse gas emissions, and nuclear energy ensures stable electricity prices.

Construction of an EPR

In 2004 it was decided to commence construction of a demonstration model EPR ( European Pressurized Water Reactor ), not only in order to have the option of eventually using this technology to replace the present generating facilities, but also to support these facilities and maintain industrial capacity whilst leveraging exports. Furthermore, transparency in nuclear matters is of vital importance in ensuring the continuity of nuclear energy. The law of 13 th June 2006 on nuclear transparency and security defines these guidelines, and in particular entrusts the monitoring of nuclear safety and radiation protection to an independent administrative authority. In addition, the law on the management of radioactive materials and waste was published on 29 th June 2006. It defines the framework, steps and means for the management of radioactive materials and waste.

Draft planning act concerning the sustainable management of radioactive materials and waste Press release of 22 March 2006 : French Minister for Industry presents a bill setting the framework, the phasing and the resources for management of radioactive materials and waste.

Promotion of energy savings

A tax credit for energy saving and renewable energies was introduced on 1 st January 2005 and reinforced in 2006. The tax credit rate has been increased:

- from 40% to 50% for energy production equipment using a renewable energy source and certain types of heat pump;

- from 25% to 40% for condensing boilers and thermal insulation materials under certain conditions.

In particular, 2006 should see the introduction of the energy saving certificate scheme. The principle of energy saving certificates is based on an obligation imposed on energy sellers by the public authorities to generate energy savings over a given period (electricity, gas, heating, refrigeration and domestic fuel oil). A savings target of 54 TWh has been set for the period from 1 st July 2006 to 30 th June 2009.

Development of renewable energies

For renewable energies, several support programmes have been put in place:

• Systems of obligatory purchase by EDF and the other electricity distributors of electricity generated by renewable energies have given new impetus to interesting sources, such as electricity generated from wind energy.
• In parallel, calls for tenders have been issued by the public authorities within the framework of multi-annual investment programming (PPI).
• Renewable energies benefit from the tax credit since 2005. This procedure has been a great success, since the solar energy market for heating or hot water production has experienced spectacular growth (more than 100,000 sq. m of solar panels were installed in 2005). The more established wood-burning stove market also showed significant growth, sales reaching more than 400,000 units in 2005.
• Opening-up of energy markets to competition

Europe is becoming a unified energy market whilst respecting specific national features, such as compliance with public service requirements. The opening up of the French market, brought about by the European directives of 1996 for electricity and 1998 for gas, is a reality. Since 1 st July 2004 all professional customs, associations and institutions have been eligible in France. From 1 st July 2007 it will be the turn of individual consumers.

In addition, with the establishment of an independent regulator, the CRE (energy regulation committee), regulated access by third parties to the electricity and natural gas grids at regulated rates and access to natural gas stocks negotiated under transparent and non-discriminatory conditions, France has a system that provides transparency and competitive efficacy.

Within the context of an open European energy market, our public companies needed to be given the same weapons as their competitors and their industrial and social projects had to be promoted. The law of 9 th August 2004 on the status of the electricity and gas companies transformed EDF and Gaz de France into corporations, and a gradual opening of their capital is planned, whilst keeping them within the public sector.

In view of its substantial contribution to the control of climate change, the Kyoto protocol required France to undertake to stabilise its greenhouse gas emissions at their 1990 level by 2008-2012. Over the same period Germany must reduce its emissions by 21% compared with 1990 and the United Kingdom by 12.5%.

For France, this objective is nevertheless ambitious since, in contrast to the other European countries, France has very small margins of manoeuvre available in order to comply with this undertaking. To give themselves the means of reaching this objective, in 2000 the authorities adopted a national climate change control programme (PNLCC), which was extended in July 2004 by the climate plan. In order to maintain the competitiveness of industrial companies with the highest rates of energy consumption, voluntary emission reduction undertakings and the implementation of a market for tradable permits within a European framework (with the establishment of a national quota allocation programme) were considered preferable to taxing the energy intensive companies. An ambitious objective of reducing greenhouse gas emissions by a factor of four by 2050 was laid down by the President of the Republic and incorporated into the law of 13 th July 2005. A working group (“factor four”, chaired by M. Christian de Boissieu) was formed in 2005 to explore the various paths towards reaching this demanding objective. It submitted a final report on 6 october  2006.

The recent establishment of the ANR (national research agency) and the AII (industrial innovation agency) ensures the implementation of appropriate research and innovation strategies.

The programmes implemented include CO₂ capture and storage, upgrading of agricultural resources using biotechnologies, and energy-efficient buildings.

The DGEMP (general directorate for energy and raw materials)

It lays down, develops and implements French energy policy.
It supervises public-sector companies in the energy sector.
It carries out economic analyses and prospective studies in the energy sector.
It plays an active role in international organisations (G8, IEA, International Energy Forums, World Energy Council, European Union, etc.).

Organisation of general directorate for energy and raw materials

The DGEMP is one of the directorates of the Ministry of the Economy, Finance and Industry, under the direct responsibility of the minister for industry.

Organisation chart of general directorate for energy and raw materials

The directorate is divided into three strategic departments:

• a directorate for energy and mineral resources (DIREM)
• a directorate for energy demand and energy markets (DIDEME)
• a department combining synthesis and international strategy, the energy monitoring unit responsible for editing energy economics and statistical data on energy and the general secretariat.

Address: DGEMP, 61, Boulevard Vincent Auriol, télédoc 151, 75703 Paris cedex 13 - France
Telephone: 01 44 97 02 25

In french www.industrie.gouv.fr/energie

In english

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© Ministère de l'Économie, des Finances et de l'Industrie, DGEMP, modifié le 20/11/2006