Energy Sector in France - Case Study Example

Energy in France Introduction The following discussion will focus on the energy sector in France. Initially the production of energy in France will be outlined with the emphasis on the nuclear production of electricity, the dominant segment of the French energy market. Then patterns of consumption will be outlined. The cost of energy in France will also be examined briefly. Then the advantages and disadvantages of Frances unique energy mix will be analyzed. A brief concluding section will draw together the diverse threads of the discussion. Production The present emphasis on nuclear energy is a result of a French government policy decision in 1974. In the wake of the first oil crisis, the French government decided to focus on rapidly increasing the countrys nuclear power capacity. At the time France had significant engineering expertise and industries, but few indigenous energy resources. Électricité de France (EDF) is the world’s largest utility company with €66.34 billion in revenues in 2009, headquartered in the 8th arrondissement of Paris. Operating a diverse portfolio of 120,000+ megawatts of generation capacity in Europe, Latin America, Asia, the Middle-East and Africa. EDF was founded on April 8, 1946. It is presently the largest energy company in the world. (“French Nuclear Power Program”, 2010) Until November 19, 2004, it was a government corporation, but it is now a limited-liability corporation under private law (société anonyme). The French government partially floated shares of the company on the Paris Stock Exchange in November 2005, although it retained 85% ownership. EDF held a monopoly in the distribution, but not the production, of electricity in France until 1999, when the first European Commission directive to harmonize regulation of electricity markets was implemented. (Bennhold, 2005) France has 59 nuclear reactors operated by Electricite de France (EdF), with total capacity of over 63 GWe, supplying over 430 billion kWh per year of electricity (net), 54% of the total generated there. Total generating capacity is 116 GWe, including 25 GWe hydro (22%) and 26 Gwe (24%) fossil fuel. Since 2000 France has exported 60-80 billion kWh net each year and EdF expects exports to continue at 65-70 TWh/yr, to Belgium, Germany, Italy, Spain, Switzerland and UK in 2010. Imports of electricity are virtually non-existent.(“French Nuclear Power Program”, 2010) Precise details of French nuclear energy production, the overwhelmingly most important segment of the French energy sector, are detailed in the chart on the following page. In 2009 oil production is estimated to have been 70,820 barrels per day for a total of approximately 26 million barrels. Those figures ranked France 57th in the world as an oil producer. France is the worlds eighth largest oil importer in the world with imports of 871 million barrels (35 times its production). It s proven reserves of oil are minimal and rank it 67th in the world. (“France”) In 2009 Frances natural gas production is estimated at 877 million cubic meters and its imports are estimated to be 45.85 billion cubic meters. It imports more than 50 times its production of natural gas. It is the worlds fifth largest importer and only 64th ranked as a global producer. Its estimated reserves are only 7.079 billion cubic meters, ranked 83rd in the world. (“France”) These figures explain Frances massive reliance on nuclear generation of electricity. Figure 1: French nuclear power reactors Class Reactor MWe net, each Commercial operation  900 MWe Blayais 1-4 910 12/81, 2/83, 11/83, 10/83   Bugey 2-3 910 3/79, 3/79   Bugey 4-5 880 7/79-1/80   Chinon B 1-4 905 2/84, 8/84, 3/87, 4/88   Cruas 1-4 915 4/84, 4/85, 9/84, 2/85   Dampierre 1-4 890 9/80, 2/81, 5/81, 11/81   Fessenheim 1-2 880 12/77, 3/78   Gravelines B 1-4 910 11/80, 12/80, 6/81, 10/81   Gravelines C 5-6 910 1/85, 10/85   Saint-Laurent B 1-2 915 8/83, 8/83   Tricastin 1-4 915 12/80, 12/80, 5/81, 11/81  1300 MWe Belleville 1 & 2 1310 6/88, 1/89   Cattenom 1-4 1300 4/87, 2/88, 2/91, 1/92   Flamanville 1-2 1330 12/86, 3/87   Golfech 1-2 1310 2/91, 3/94   Nogent s/Seine 1-2 1310 2/88, 5/89   Paluel 1-4 1330 12/85, 12/85, 2/86, 6/86   Penly 1-2 1330 12/90, 11/92   Saint-Alban 1-2 1335 5/86, 3/87  N4 - 1450 MWe Chooz B 1-2 1500 12/96, 1999   Civaux 1-2 1495 1999, 2000   Total (58) 63,130     Differences in net power among almost identical reactors is usually due to differences in cold sources for cooling Source: World Nuclear Association. “French Nuclear Power Program”. With its massive nuclear generating capacity France was a late entrant into the renewable energy field. However, noteworthy advances have been made recently. In 2005 only 5.3% of electricity production was derived from renewables. (European Union, 2008) Consumption France is a massive energy consumer. Its annual electricity consumption was estimated to be 447.2 billion kWh, ranking it ninth in the world. Its oil consumption is estimated to have been 1.875 million barrels per day in 2009 ranking it thirteenth in the world. In terms of natural gas consumption it was ranked at 18th in the world in 2009. With the exception of electricity (which it exports in significant quantities) France consumes far more energy than it produces and has to make up the difference with imports. Energy Costs Historically, electricity prices in France have been capped by the government, maintaining artificially low rates (and discouraging conservation). However, with the European Union moving towards universal pricing electricity prices have been rising in France (sparking public anger and demonstrations). On November 25, 2010 Lars Paulsson reported that, “The difference in prices for next-day electricity in France, Germany, Belgium and the Netherlands converged at 51.21 euros a megawatt-hour after the markets were joined under the Central Western Europe coupling project on Nov. 9.” (Paulsson, 2010) Gasoline prices in France are tied closely to the entire European Union market. Consequently, they vary little from other European countries and increased by approximately 20% in the 13 months from March 2010 to March 2010 as the chart on below indicates. Source: U.S. Energy Information Administration. (2010). “Weekly Retail Premium Motor Gasoline Prices Including Taxes in Europe” Advantages and Disadvantages of the French Energy Mix With the universalization of the European electricity market French consumers enjoy no significant price advantages over other European residents. However, the massive exports of electricity provide significant national revenue. Those benefits are, however, offset by the massive imports of oil and natural gas that are required to fuel the French economy. The principle advantage of the French energy mix is the fact that very little electricity is generated in coal fired generating stations and only 24% is generated in fossil fuel fired generating stations. This is an exceptionally small proportion compared to most other industrialized countries. That said France, like most nations on the globe, is a car culture and the consumption of fuel in vehicles, coupled with its high levels of industrialization, and its low proportion of energy delivered from renewable means that it continues to make a significant contribution to climate change and related problems. The massive reliance on nuclear energy is a double edged sword. Nuclear electricity generation does not contribute to global warming. However, the French nuclear industry produces huge quantities of dangerous, nuclear waste. On the plus side 17% of that waste is recycled and reused. Also, Frances newest Generation IV reactors produce far less waste than earlier reactors.(World Nuclear Association, 2010) However, disposal of nuclear waste remains the largest disadvantage of the French energy mix. On the other hand an environmental organization, Greenpeace, describes nuclear waste disposal in France as a crisis: The nuclear power and reprocessing industry have created large volumes of waste, of which many are stored in an unstable condition. They have also illegally dumped tens of thousands of cubic metres of waste in France, without an option to ever take them back.... As no solution has been found for a sound management of nuclear waste, problems are meanwhile transferred to future generations. This is the real crisis of nuclear waste. (Greenpeace, 2006) Conclusions France imports massive quantities of natural gas and oil. It produces and exports massive quantities of electricity generated, for the most part, in nuclear reactors. Energy costs in France approximate those in other European Union countries, reflecting the common market in energy that characterizes the European Union. The principle energy related problem confronting France is the massive quantities of nuclear waste that its reactors produce. References Bennhold, Katrin. (November 21, 2005). “EDF shares fail to light up market”. The New York Times. Web. 21 November 2010. Central Intelligence Agency. “France”. The World Factbook. https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html>. European Union. (2008). “France – Renewable Energy Fact Sheet”. http://www.energy.eu/renewables/factsheets/2008_res_sheet_france_en.pdf. Greenpeace. (May 30, 2006). “The Nuclear Waste Crisis in France”. http://www.greenpeace.org/raw/content/international/press/reports/nuclear-waste-crisis-france.pdf. Paulsson, Lars. (November 25, 2010). “Power Premium Falls as France, Germany Converge: Energy Markets”. Bloomberg. http://www.bloomberg.com/news/2010-11-25/power-premium-shrinking-as-france-converges-with-germany-energy-markets.html. U.S. Energy Information Administration. (2010). “Weekly Retail Premium Motor Gasoline Prices Including Taxes in Europe”. http://www.eia.doe.gov/emeu/international/gas1.jpg. World Nuclear Association. (November 22, 2010). “French Nuclear Power Program”. http://www.world-nuclear.org/info/inf40.html. Read More