France: stepping into offshore wind energy and strengthening its nuclear presence

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21 July 2011, Nuclear, Solar, Wind

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In June, France announced its intent to invest E1bn in nuclear asset safety and thereby strengthen its nuclear presence, just as other European countries such as Germany, Italy, and Switzerland are moving away from nuclear power. According to Datamonitor's upcoming 2011 Energy Market Landscapes report (EN00039), 75% of France's electricity output comes from nuclear power. This high nuclear reliance would make it extremely difficult for France to follow the German, Italian, and Swiss energy policies, even if it wanted to. Conversely, the E1bn investment to maintain and repair nuclear power plants will help France to further consolidate its nuclear footprint.

France has been slow in developing its renewable energy sources, especially when compared to its neighbor Germany. In order to maintain energy security, France has also announced a tender of E10bn for its long awaited offshore wind projects. The tender has attracted attention from a number of energy suppliers such as GDF SUEZ, EDF, Dong Energy, and Suzlon. Both EDF and GDF SUEZ are forming a consortium with other companies in an attempt to win the bid. The active participation of these big players is indicative of the enormous prospects for offshore wind power, especially in view of France's extensive 5,000km coastline. Ultimately, the success of this project will lay the foundations for future low carbon energy development in France.

The global offshore wind power market is still in a nascent stage, with just over 3GW of installed capacity as of 2010. More than 95% of this capacity is installed in Europe. The UK and Denmark currently lead the offshore wind market, together accounting for more than 2.1GW of cumulative installed capacity. Datamonitor believes that as a result of its wind power initiative France will gain dominance in this market, enhancing the country's renewable portfolio and diversifying its sources of electricity. In addition, this will help the country to achieve its 2020 target of 23% of total energy production from renewable sources.

Energy security has become an important issue for all countries. Maintaining its nuclear profile will allow France to meet its short- to medium-term energy demand, while entering into offshore wind energy could provide a longer-term solution to the country's energy needs.

Source: Datamonitor

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