00:00And Macron bets big on electrification, unveiling major new investment plans to power French industry and future growth.
00:12Jonathan Bruegel is a power sector analyst at the Institute for Energy Economics and Financial Analysis.
00:20Great to have you on the programme, Jonathan.
00:23So look, France has long relied on cheap nuclear power.
00:28So is this a green strategy or an economic rescue plan for French industry?
00:36Well, it's more than a green strategy.
00:39It's a historical pattern in France to use electricity as a way to provide heating and lots of demand in
00:49the energy sector.
00:50It has started in the 70s with a nuclear programme and France benefits from cheap electricity and decarbonised electricity.
01:01So cheap electricity thanks to nuclear and decarbonised.
01:03So on one hand, it's an energy transition support, but also it's an economic edge for France.
01:13France could be using much more in terms of electricity in industry attractiveness, steel or aluminium and bring bring more
01:26industries to France.
01:27And that's, I believe, what President Macron is trying to achieve, besides the energy transition.
01:32I mean, he says electrification, it was going to boost competitiveness.
01:36But who's going to pay for this?
01:38Is it going to be taxpayers?
01:39Is it going to be consumers?
01:40Is it going to be business?
01:44Is it going to be a massive increase in cost because the fleet is already very much decarbonised and the
01:55FC we have in France is cheap.
01:57For instance, it's two times cheaper than the German price for retail consumers.
02:03So I would say this huge development plan of like increasing nuclear but also renewable will be paid by, let's
02:17say, the advantage France will be taking from it.
02:22France will be having more consumer, electric consumers using XC for industrial purposes.
02:33So I don't see the, to answer your question, I don't see the consumer or the taxpayers putting the bill.
02:41So let's look at Europe's strategy because Europe spent years focused on cutting energy demand.
02:47Is France, do you think, now breaking away from that model by betting big on power-hungry industries, let's face
02:54it, like AI, like EVs?
02:58Well, I would correct you say cutting energy demand.
03:01Yes, cutting energy demand, but shifting the share of energy demand from fossil fuel to electricity.
03:09And it's not only France which is looking for electrification as a way to shift the energy demand.
03:14So more and more countries, not only France are looking at electrification as a solution.
03:27So, yeah, it's a strategy used by France, but it's a strategy mostly used by the EU.
03:31So let's look at how France is going to do it.
03:34Can France scale up on its own or is it going to need to have that deeper cooperation with places
03:40like China on EVs, on batteries and clean tech?
03:46Well, you cannot deny that in order to develop such growth in generation, let's assume France would want to generate
03:54maybe 85 to 100 teratars a year more of power,
04:00mostly thanks to renewable energy.
04:02It will require more PV, more wind turbines.
04:06And, yes, we will need more mineral and rare earths from countries like China.
04:11So it's kind of shifting the dependency we had or have on fossil fuel to more rare material we import
04:19from China and other countries.
04:20But in the short term, it's shifting the dependency.
04:24And I would say it will be mostly focused on the capex, so building the infrastructure.
04:31Once the infrastructure is built, the cost will be some cost because once you operate a windmill or once you
04:38operate solar, the cost doesn't run.
04:40While if you run a gas plant, the gas will cost will be needed to supply the plant forever.
04:46So on the short term, it's shifting the dependency to other countries.
04:50And on the long term, it's reducing to a large extent the dependency on fossil fuel.
04:56Jonathan Prugel, thank you very much indeed.
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