FRANCE PUSHES RENEWABLE ENERGIES DESPITE COUNTERCURRENTS

UNCLAS SECTION 01 OF 02 PARIS 002222

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KGHG SENV ENRG TRGY EU FR
SUBJECT: FRANCE PUSHES RENEWABLE ENERGIES DESPITE COUNTERCURRENTS


1. Summary. France has unveiled an ambitious national plan to
double the share of renewables in total energy consumption to 23
percent by 2020. At present, hydropower accounts for 12 percent.
Apart from biofuels for transportation, the new renewable
electricity plan will target photovoltaic (PV) installations and
wind farms. However, industry fears the GOF may retreat on wind
power in the face of local and national opposition, a potential
problem for solar energy as well. France already has a low carbon
footprint for electricity generation, a result of its reliance on
nuclear power. End summary.

On the Renewable Cusp for 2020
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2. Minister of Ecology, Environment, Sustainable Development and
Regional Planning (MEEDDAT) Jean-Louis Borloo recently announced a
package of 50 measures to boost renewables in France's general
energy consumption mix to 23 percent. The initiative will accelerate
research and promote projects in bioenergy, hydraulic, wind,
geothermal, solar, and marine energies and develop industrial
capacity, especially for solar power. According to ADEME (the
French Agency for Environment and Energy Management) the renewables
and energy efficiency market in France should rise from 33 billion
Euros in 2008 to approximately 70 billion Euros in 2012. By 2012,
renewable energy-related job creation is expected to rise from
54,000 jobs in 2007 to 120,000, and energy efficiency-related jobs
from 168,000 to 320,000.

Solar to Spearhead Renewables Initiative
--------------

3. "Solar is the big one," stated Borloo. Though it has 18
megawatts (MW) of PV in 2008, France plans to reach 5,400 MW by

2020. (In the EU EU France ranks fourth for installed solar
capacity after Germany, Spain and Italy.) As a start, by 2011 the
GOF intends to build at least one solar farm in each region for a
combined total capacity of 300 MW. Besides existing residential
rooftop PV incentive programs, France will create a new
feed-in-tariff electricity production incentive (Euro 0.46/kWh) for
buildings with large roofs such as factories, supermarkets, schools,
or barns.

Avoiding "Sterile Debate" on Wind Energy
--------------

4. The French plan to increase installed wind capacity from 2,500
MW in 2007 to 25,000 MW in 2020, of which 6000 MW will be from
offshore wind farms. Preferential feed-in tariffs will be maintained
until 2012. MEEDDAT also announced its intention to draft laws "to
improve the regulatory framework" of siting land and offshore
facilities. However, the law's contents remains to be defined.
This ambiguity is worrying to the French turbine industry in the
face of NGO opposition to installation of wind farms. Beyond
concern for animal welfare, noise and "visual pollution," wind
energy opponents denounce inflated electricity bills resulting from
the feed-in tariffs and misuse of subsidies. Former President
Valery Giscard d'Estaing described the sector as a "questionable
business and a silent fraud." A recent study by the Institute
Montaigne, a conservative think tank, concluded that additional
costs for wind turbine power over lower cost alternatives "will be
around 1 billion Euros a year up to 2020, rising to 2.5 billion
Euros per year if the program proposed by the GOF is realized."
ADEME rejects these estimates.

Bio, Geo and Hydro Energy - a Supporting Role
--------------

5. Though less ambitious than solar and wind power, the plan will
install heat pumps in two million households and increase biomass
production significantly by 2020. To fund biogas, thermal and
geothermal collectors a "Renewable Heat Fund" will be launched next
year providing approximately 1 billion Euros over three years.
According to the media, in December the GOF plans to tender for
several biomass-fueled power plants generating a total of 250 MW.
Currently hydro electricity is the main source of renewable
electricity in France with an annual production of 70 Terawatts
(TW)/hr/yr and installed capacity of 25,000 MW.

Biofuels Postponed
--------------


6. Biofuels are expected to represent 15 percent of the renewable
energy objective for 2020. However, the MEEDDAT document issued on
November 17 merely states that a program for biofuels, especially
second generation biofuels, will be presented later. (In mid-2009
ADEME's biofuels study is scheduled for release.)

Energy Efficiency Remains Key
--------------

7. In addition to increasing the numerator of renewable energy
output, our ADEME and MEEDAT contacts stress the need to reduce the
denominator of total energy consumption through energy conservation
and efficiency if France is to reach its target of 23 percent
renewable energy by 2020. Recently, the ADEME President lamented

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that the 20 percent target on increased energy efficiency in the EU
Climate/Energy Package is not legally binding.
Comment - NIMBY is Alive in France
--------------

8. While the French broadly support an increase in renewables,
where to site the facilities is a problem. Rapidly increasing wind
power is an important key to reaching the government's renewable
energy target. As noted above, with unease growing among
politicians and local communities, the GOF is proposing planning
controls and local community consultation procedures as a means to
improve acceptability. However, the French Renewable Energies Union
representing industry has warned the GOF against discouraging
potential wind energy investors. Similarly, apart from roof-top
facilities, solar farms' use of open land may also arouse local
opposition. Finally, the well-established nuclear industry, which
no longer faces these problems, advocates its "low carbon footprint"
solution to reducing greenhouse gas emissions. The GOF will need to
demonstrate strong political will to move forward with broad-scale
wind and solar power projects.

STAPLETON