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OPINION: France cannot afford to keep shielding consumers from energy price rises

John Lichfield
John Lichfield - [email protected]
OPINION: France cannot afford to keep shielding consumers from energy price rises
France's President Emmanuel Macron addresses media following a conference with Germany's Chancellor Olaf Scholz on the energy crisis. Photo by Ludovic MARIN / POOL / AFP

The Ukraine war has combined with Covid delays and long-term problems with France's ageing nuclear power plants to create a perfect storm for French energy supplies this winter, writes John Lichfield.

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The lights will stay on in France this winter. Probably.

President Emmanuel Macron’s message to the French people on Monday was as much a warning as it was a guarantee.

“We are at war”, he said. Russia is halting its gas supplies to Europe as a “weapon of war” to try to undermine European solidarity with Ukraine.

As a result, he said, there will be huge problems with French, and European, energy supplies this winter but there is no reason (yet) to panic.

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We can avoid power cuts and electricity and gas rationing if the nation reduces its power consumption by 10 percent, he said. A government plan for energy “sobriety” will be announced in the next few days.

READ ALSO Will there be energy rationing in France this winter?

All state buildings will be ordered to take part, he said. Households will be urged – but not yet forced – to make savings, such as turning the heating down to 19C.

Macron also warned, without quite saying so, that state-subsidised French electricity and gas bills – currently the envy of Europe – will explode next year. How big that explosion will be is unclear.

The finance ministry is still doing its sums for 2023, trying to balance real threats to public finances with - France being France – possible threats to public order.

Placing a 4 percent cap on electricity bills has already cost the state almost €20bn since February, if you include the enforced losses of the largely state-owned electricity company EDF. The total bill to the state so far, including the freeze on gas prices and subsidies on petrol and diesel, is over €32bn – around 1.3 percent of the country’s annual earnings or GDP.

READ ALSO How to cut your household energy use by 10%

The “real” increase in wholesale electricity prices in France this year is more like 50 to 70 percent.  Such subsidies cannot continue indefinitely, Macron warned (just as it appears that the new UK Prime Minister, Liz Truss, is considering standing on her head and copying the French).

I listened to Macron’s one hour press conference with conflicting thoughts.

The President’s grasp of detail was extraordinary, as ever. But it seemed to me that he was both taking the French people into his confidence and misleading them; warning them of the problems to come while softening the harsh realities.

Just how bad is the energy crisis which France faces this winter? Can it really be solved by turning the central heating dial down to 19C?

Is the crisis all Vladimir Putin’s fault, as Macron implied? Why should the closing of the Nordstream One gas pipeline from Russia to Germany and other EU countries threaten a shortage of electricity as well as gas?

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To answer the last question first…. France’s electricity shortage is only partly caused by the Ukraine war. The shortage of gas does affect the production and above all the wholesale price of electricity in what is a fiendishly complicated (and according to Macron dysfunctional) European electricity market.

But France is normally a net exporter of electricity. It could have benefited from the huge jump in wholesale electricity prices this year. It has in fact been importing electricity from neighbouring countries, including Britain.

More than 80 percent of France’s electricity comes from nuclear power stations and more than half of France’s nuclear reactors –  25 out of 56 – are currently closed down. Partly, this is because of routine maintenance; partly, it is because of delayed maintenance because of the Covid lockdowns.

 But there is also another, more disturbing problem. No less than 13 French reactors have suffered emergency closures since January after inspectors discovered corrosion and tiny cracks in their cooling pipes.

In theory, all should be operating again by February. Until then, France’s electricity supplies are fragile.

After speaking to the German Chancellor Olaf Scholz in a video summit yesterday, President Macron announced that France and Germany would be “swapping” surplus energy this winter.

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France would sell some of its gas stocks to Germany (which is much more dependant than France on Russian gas). Germany would sell more of its electricity to France (including the energy from the polluting, coal-powered stations which French politicians have until recently liked to mock).

Macron angrily rejected suggestions that the failings in France’s much-vaunted fleet of nuclear power  stations were, somehow, his fault. He blamed bad luck and poor maintenance by EDF.

Right wing politicians blame Macron’s predecessor François Hollande for backing away from nuclear power in 2007-12 and Macron for being too slow to decide to resume a nuclear-building programme.

In truth, no new power stations ordered by Macron at the beginning of his first term could have been operational this summer. A new generation pressurised-water reactor under construction at Flamanville in Normandy has been serially delayed by design faults. It was supposed to open in 2012 but will finally open next year.

In sum, the Covid pandemic and an ageing nuclear power fleet have combined with the Ukraine war to create a serious energy problem in France. The situation has been worsened by the heat and drought this summer which has limited the river water available to cool power stations.

Thus far, French families and most French businesses have been shielded from these difficulties by the 4 percent ceiling on electricity bills. As Macron warned on Monday, that protection will be weakened next year. State subsidies would continue, he said, but would mostly take the form of help to the lower paid. In other words, bills for many households and businesses will increase hugely.

The Ukraine war has worsened this problem; it has also served to disguise some of the causes. President Macron was right to say yesterday that France and Europe are “at war”. He is right to call – as he did last month - for French people to be ready to make “sacrifices” to continue their support for Ukraine.

But French power cuts this winter, if they happen, will not be wholly, or even largely, the fault of Vladimir Putin.

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Anonymous 2022/09/06 17:15
Very informative summary of the problem and its causes.
Anonymous 2022/09/06 14:41
Great article. Another added problem is the low HE production caused by low water levels in rivers. I hope the coming winter won't be too cold but windy so that wind turbines keep producing electricity.

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