France will need to add 43GW of renewables capacity by 2035 if it is to limit nuclear generation to a target of 50%, according to analysis on the French power market and policy by Aurora Energy Research.
Meeting a 50% nuclear generation goal by 2035 will require a 70% – equivalent to 43GW – increase in wind and solar capacit, to keep emissions in check, Aurora said.
Government subsidies for renewables will help to unlock €45bn in investment, according to the research.
Aurora lead associate Weijie Mak said: “The French government’s ambitions to maintain current levels of carbon emissions and energy prices while reducing reliance on nuclear power will provide significant investment opportunities for companies investing in renewables.
“Direct government subsidies will unlock a €45bn renewables investment opportunity that will also see entry of subsidy-free solar and onshore wind assets by 2030.”
Rising gas and carbon prices are expected to drive up wholesale power prices, while higher penetration of renewables will result in increasingly volatile prices, due to the variability of wind and solar output, according to the analysis.
The study also points out that these conditions improve the economics of energy storage and suggests that at least 5GW of batteries will enter the French market by early 2030s.
Security of supply concerns from the closure of nuclear and coal plants will be alleviated by the increase in interconnectors to neighbouring power markets, as well as storage projects. These will be more cost competitive than thermal technologies when the need for new-build generation capacity arises.
But as France has lots of interconnectors the energy market is exposed to energy policy changes in neighbouring countries.
Mak said: “France is currently at the forefront of decarbonisation efforts relative to its neighbours, boasting one of the lowest emission levels and prices in the power sector in the EU.
“This is set to change in the next decade as neighbouring countries continue to place greater emphasis on their climate change objectives.
“Aggressive decarbonisation efforts by GB, Spain and Germany in particular, could lower the market value for French domestic power by €5bn (or 15%) in 2030, through a combination of lower exports and wholesale prices.”