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  • Writer's pictureRomain Duchet-Suchaux

The French nuclear industry rebirth - Part1

As part of our activity, we have supported companies working to develop renewable energies in France. Aware of their key role in the decarbonisation of our energy mix, we also observed that this transition will also be based on an ambitious revival of our nuclear industry. It seems that low-carbon objectives will be reached even more swiftly if all sectors succeed in rapidly increasing their capacity.

We are offering a series of publications, this post being the first, with the aim of shedding light on the interest of the nuclear industry, both in terms of its prospects, its capacity for value creation and its diversity of activities.

On the long run, a significant increase in electricity demand

Despite a recent stabilisation, the demand for electricity in France is expected to rise again in the coming years, driven by reindustrialisation (see also our recently published post on this subject) and the electrification of uses, such as electric mobility, heat pumps and hydrogen solutions.

Thus, RTE (Réseau de Transport d'Electricité) anticipates in its projections an electricity demand increa from 480 TWh in 2019 to 550 (low scenario) - 750 (high scenario) TWh in 2050, i.e. a growth of 15% to 56% in 30 years.

In addition to these scenarios, the graph below shows that the electrification of uses will require the replacement or reduction of about 1,000 TWh of fossil energy in France, which mainly generate mobility, heat and electricity.

The need for electricity production therefore remains significant in the long term, and the total decarbonisation of our country may require going even further than the scenarios forecast by RTE, whether in developing electricity production capacities or changing our lifestyles in order to reduce our energy consumption.

An imbalance between supply and demand on the electricity market that is tending to increase

However, this increase in demand has not yet been fully met by the European response. Indeed, the supply of electricity is currently slowed down for two main reasons

  • A reduction in guaranteed production capacity in Europe: while wind and photovoltaic production capacities were developed strongly to reach more than 30% of installed capacity, hydroelectricity generation development has not been sufficient to compensate for the reduction in fossil and nuclear capacities

  • A rise in fossil fuel prices: after years of stability, oil and gas prices have seen their first spectacular rise in 2021, amplified in 2022 by the Russian-Ukrainian conflict. This increase has a direct impact on the price of electricity on the European market.

This imbalance between supply and demand could result in a structural increase in the price of electricity in the medium term. This is a direct consequence that will be detrimental to households, but which could nonetheless contribute to financing the reinforcement of production capacities.

Nuclear power is part of the solution

In order to respond efficiently and responsibly to the future increase in European electricity demand, three main electricity generation technologies have been identified by RTE, excluding fossil fuels: wind, solar and nuclear.

Not only will existing generation capacity have to be maintained (for plants with a lifetime of 20 to 60 years depending on the technology), but 55 to 225 GW of additional capacity will have to be developed according to our analyses based on the RTE scenarios:

  • 10 to 45 GW of nuclear capacity (for 60 GW existing)

  • 45 to 180 GW of solar and wind capacity (for 25 GW existing)

These development challenges are considerable: RTE currently mentions 8 to 14 second generation EPR nuclear reactors in 2050, with an individual capacity of 1.8 GW, an additional capacity of 14.4 to 25.2 GW. As a reminder, the first reactor of this type in France is still under construction and should be commissioned in 2023 after more than 15 years of work.

Similarly, the French territory will have to deploy between 2 and 7 times the wind and photovoltaic capacity that has been deployed so far by 2050. RTE is currently forecasting a 10-fold increase in solar capacity and a 5-fold increase in wind capacity, an additional capacity of 180 GW.

These ambitious objectives can only be achieved with the support of the State and a strong investment by the industry's private players:

  • A French nuclear fund has been allocated for total of €200 million by the State and EDF for 2022

  • A call for projects "Innovative nuclear reactors" has been deployed via BPI France, with €500 million to support the development of new concepts (Small Modular Reactor, fast-generation, thorium, fusion, etc.)

  • Through the France relance scheme, €366 million of investment had been made by 2021 by private players with €110 million of State support

With growing electricity consumption, soaring prices and increasing support from public authorities, the signs are green for the revival of an industry whose skills have weakened in recent years due to a lack of projects. However, it should be remembered that this industry has been able to increase its skills in a dazzling manner in the past. You will find more details on these elements in the next blog.

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