Article originally published on La Tribune
Winter 2021-2022 saw strong tensions on the electricity network in France which revived fears of blackouts in the event of a major cold spell during the winter (RTE reference). Over the period from 21 to 23 December 2021, France thus imported record quantities of electricity from its European neighbours, even if, over the year, it remains largely an exporter.
Among the factors explaining this tension: a fairly strong unavailability of the nuclear fleet (10 reactors shut down on January 19, 2022) due to a maintenance schedule upset by Covid and unexpected shutdowns, maintenance periods longer than expected, a lack of controllable capacities (nearly 10 GW were closed these Last 10 years). But also a factor that is less often mentioned: a marked delay of the evolution of electrical production capacities compared to multi-annual energy programming (PPE), particularly in terms of the deployment of renewable energies.
A tense energy situation
The start of the Flamanville EPR (now scheduled for mid-2023) and the Landivisiau gas power plant should provide some margin in the coming years, but the respite could be short lived. Indeed, as part of its climate goals, France is committed to using less final energy, but more electricity. RTE, the French electricity network operator, recently published its prospective report “Energy Futures 2050", a comprehensive study of 6 energy scenarios compatible with the achievement of carbon neutrality for France in 2050. This report predicts a sharp increase in electricity consumption of at least 35% over the next 30 years.
But the tensions on electricity supply, as well as, more generally, the current energy crisis linked in part to a necessary (even if too slow) structural decline in investments in fossil fuels and to insufficient investments in low-carbon alternatives, above all, recall the need for a clear vision and its implementation in an orderly and proactive manner.
If France has the advantage of having a carbon intensity of electricity Among the lowest in the world, giving it, in principle, a competitive advantage for any production dependent on electricity, RTE studies show that very significant investments are necessary in the next 30 years for the decarbonization of France. Between the construction of new nuclear reactors to maintain the nuclear share at 50% (as planned by the PPE), and the deployment of renewable capacities at unprecedented rates, the challenge is considerable.
Translating strategic choices into electricity production needs
The sizing of production capacities will strongly depend on planned consumption in the future, which will itself depend on societal choices that will be made, in particular in terms of sobriety, but also of industrial policy. The reindustrialization of France is in fact a strong potential lever for action for reduction in carbon footprint, but it is relatively energy-intensive. RTE thus estimates that a so-called 'profound' reindustrialization scenario will involve an increase in electricity consumption by 60 TWh/year, to which must be added the need for carbon-free fuels such as hydrogen (whose production is energy-intensive). This estimate is also relatively low if we compare it to that of our European neighbors (the Netherlands expects electricity demand to double, Germany an 80% increase) and deserves to be studied carefully.
The current government's reindustrialization strategy is based on various aspects: relocating certain so-called strategic activities and the establishment on the territory of foreign companies (Choose France), the strengthening of the existing productive fabric with in particular support for the modernization of production units and the development of tomorrow's industries (France 2030 investment plan). Even though France is one of the most de-industrialized countries in the eurozone, it still has assets and know-how that make reindustrialization possible. However, after 40 years of deindustrialization, synonymous with under-investment in production units and innovation, the road to the reconstruction of a solid industrial base will inevitably be long, difficult and expensive. It means defining a clear vision and designing an industrial strategy that goes beyond factory walls.
Indeed, reindustrialization raises questions about training, innovation, energy, infrastructure, and even digital technology, at a time when data is becoming a strategic asset for industrial companies. A reindustrialization strategy that does not incorporate a transversal vision of all these issues would certainly be weakened over the long term.
The challenge of decarbonizing productions and uses
Reindustrialization seems to be a lever for the fight against global warming provided that production and uses are decarbonized. This issue seems to be being taken care of by the government through the support granted to decarbonization. via the recovery plan and the development of a hydrogen sector through the France 2030 program.
In the speeches, decarbonization therefore seems to be based mainly on electricity and low-carbon hydrogen. Both are seen as ways to decarbonize productions and uses. However, the use of both implies that we are in a position to produce them in sufficient quantity, to store them and to distribute them as close as possible to uses and needs. The history of electric vehicle charging stations suggests that what some consider to be details may be barriers to the spread and adoption of technology.
95% of the hydrogen consumed in France is now of fossil origin, and 40% of consumption is destined for oil refining. Hydrogen production is therefore currently mainly used by an industry considered partially responsible for global warming. Hydrogen is a lever for decarbonizing heavy industries such as the steel industry, but on the condition that low-carbon hydrogen is used and produced from carbon-free energy. One of the solutions is to produce it by electrolysis of water from electricity, which therefore requires France to ensure that it is in a position to generate the electricity necessary for the production of low-carbon hydrogen. However, the time scales for the construction of nuclear power plants or the deployment of renewable energies at scale are long. The commissioning of future EPR2 is not expected before 2035-2037 if the decision to build them is made in 2022—23. However, despite the president's announcements at the end of 2021, these decisions are long overdue.
Therefore, the industrial strategy around hydrogen must address the question of uses to decarbonize as a priority, in particular industry and heavy mobility. It cannot be exempted from a reflection on the effort to achieve sobriety and therefore from a reduction in certain uses. Nor can the reindustrialization strategy be exempt from a reflection on the choice of materials in order to reduce dependencies, on the construction of new recycling channels and on the construction of a renewed vision of what autonomy is. The scope of competition also arises.
The industries that emit the most carbon are also very competitive industries, so the effort to modernise industrial sites will have to be combined with rebalancing mechanisms at national or European borders. It is impossible to commit significant public and private resources to achieve carbon neutrality if French industries are in competition with companies that are not subject to the same constraints. We need to think about these mechanisms now if we want to avoid phenomena of market saturation and a new wave of deindustrialization.
Choosing in an uncertain geopolitical context
France is not the only nation that wants to take this path of reindustrialization. Some powers, such as China, Korea or Germany, aim to strengthen their industrial base, others, such as the United States, to reindustrialize by putting substantial public and private resources on the table.
The French reindustrialization strategy must therefore also integrate the behavior of other nations in terms of specialization. These strategies will have an effect on demand, in particular on critical raw materials, and could induce geopolitical tensions that are too often minimized in French and European strategies.
Industry and energy are closely linked. They require taking the time for a democratic debate that is peaceful and free of Manichean approaches. There are no magic solutions, but today's choices will have consequences on our future developments that are often difficult to measure. They will also have consequences in terms of cost and, until we admit that carbon neutrality will lead to additional costs, some temporary, others not, then we will struggle to trigger profound change.
Anais Voy-Gillis and Greg from Temmerman (*)