French Nuclear Capacity Will Depend On Electricity Reform, Says IEA
Written by NucNet
Wednesday, 28 July 2010
New nuclear energy capacity in France will depend on a revised tariff structure and electricity market reform ensuring more competition, according to an energy policy review released on 26 July 2010 in Paris by the OECD International Energy Agency (IEA).
The report, entitled ‘Energy Policies of IEA Countries 2009 France Review’, calls for a more competitive French electricity market, adding that new nuclear capacity in France “is dependent on electricity prices reflecting the full costs of nuclear power production, including its development cost”.
The report adds that the “significant competitive advantage” enjoyed by Electricité de France, which sells power to customers at regulated tariffs below market price offered by competitors, does not fall within a “sustainable” market structure, and says the way tariffs are currently organised is “questionable”.
The current tariff structure may pose a threat to organising the substantial medium-term investments needed for maintenance and life extensions of the nuclear park, and the substantial long-term investments needed for the renewal and expansion of France’s reactor fleet, the report says.
IEA executive-director Nobuo Tanaka said that while France’s generation and retail sectors are fully open to competition, in line with EU directives, competition is in reality still rather limited.
Mr Tanaka added that the proposed law on the new organisation of the electricity market, currently going through the upper house of the French parliament would allow all electricity suppliers in France to get access to EDF's “historic” nuclear power capacity at a regulated tariff. It is a “significant step in reforming the current market towards more competition,” he said.
The IEA review, which is released every five years for all agency member countries, praises France for its commitment to global energy and climate challenges under the policy framework of the national energy and environmental programme known as Grenelle de l’Environnement.
“The government’s goals to decrease CO2 emissions by 75% by 2050 and to reduce greenhouse gas (GHG) emissions in the transport sector to 1990 levels by 2020 are both ambitious and encouraging,” said Mr Tanaka.
The government’s policy goals for energy and environment were enshrined into law under Grenelle II, a legislative package adopted by the Senate on 28 June and National Assembly (l’Assemblée National) on 29 June 2010. The law foresees the implementation of policy across six ‘sectors’.
“It is particularly encouraging that it (the law) prioritises emission reductions and energy efficiency improvements in the buildings and transport sectors” said an IEA press release. “These two sectors account for the bulk of France’s GHG emissions, and reducing them is a daunting task.”
The report also praises the role of nuclear power in the energy mix in France, which is one of the least CO2-intensive industrialised economies.
Specifically referring to nuclear, Mr Tanaka also said that the French government nevertheless had “a huge responsibility to ensure that the nuclear waste management is addressed in a sustainable way”. Energy Policies of IEA Countries 2009 France Review Summary
