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Jacques Lesourne
welcomed the participants by reminding that the debate
is based on a recent study published by Ifri’s Energy
Program (“Les relations franco-allemandes dans le
secteur de l’énergie” by Jan Horst Keppler, Sophie
Méritet and Kristina Notz, available on our website,
English translation to be published soon). He then
highlighted that Franco-German energy relations are
often dominated by debates on nuclear power. For many
observers, the two countries seem far apart on this
question. Indeed, very different political decisions
have been made by either country on the issue.
Surprisingly, opinion polls have shown that public
opinion on nuclear energy is quite similar in both
countries (see Jacques Lesourne (ed.) Nuclear Power and
European Public Opinions. Ifri 2008). Furthermore, the
cooperation between Areva and Siemens in the nuclear
field is one of the best examples of Franco-German
industrial cooperation. In more general terms, France
and Germany have a quite different energy mix and hence
both countries have divergent positions concerning some
aspects of European energy policy.
Hinrich Thölken
took up this last point and underlined that different
political choices in France and Germany do not
necessarily mean that both countries have divergent
interests. Both countries decided to develop nuclear
energy after the first oil shock, but to a different
extent: France chose nuclear energy as a way to secure
her energy independence, while nuclear development in
Germany was overshadowed by the impact of the Cold War,
as a significant number of nuclear arms were stationed
in Germany. Public resistance against nuclear weapons
for many included a dislike of nuclear in all aspects;
hence a strong movement against nuclear energy emerged
in Germany in the 1970s. In the 1980s, Germans were
deeply shocked by the Chernobyl accident, whereas French
political leaders tried to minimize the accident’s
impact. Due to public resistance after Chernobyl, only
four nuclear power plants have been built in Germany
since then. German politicians have instead taken a
different turn and done a lot in order to improve energy
efficiency. According to Mr. Thölken, Germany has indeed
made a lot of progress in this field – and this cannot
be said about France.
He then stressed that Germany’s decisions on the
choice of energy resources do not harm her energy
development. The decision to phase-out nuclear energy
and to develop renewable energy instead, which has
always been supported by a majority of the German
population, is far from being an “economic suicide”, as
it has been dubbed by some observers. On the other hand,
Germany does not pretend to convince others to follow
suit and phase-out nuclear as well. One should rather
acknowledge that there is not one single solution to the
issue of energy. Still, German decision-makers are aware
that the large share of coal for German electricity
production poses a problem that needs to be addressed.
CCS could be a good solution in this context and Germany
is indeed very interested in developing this technology.
Hinrich Thölken underlined that for this reason, he
thinks that coal has a future and will be a modern form
of energy, especially when coal plants are updated and
equipped with cogeneration (combined heat and
power).
As she is developing renewable energy resources,
Germany also needs to upgrade her electricity grid.
Electricity production from renewables generates larger
capacity fluctuations than electricity production from
conventional sources, so quick investments in the German
grid and in interconnectors with other countries are
needed in order to cope with the new requirements.
In the end, shared goals and common interests are
however the most important aspect in Franco-German
energy relations. Both countries have a joint vision and
responsibility for the energy future, especially when it
comes to climate change and reducing CO2 emissions. The
differences on nuclear do not hinder cooperation and
both countries have more credibility when they cooperate
in the European context. Therefore, it is very important
that the French presidency of the EU has been able to
set Europe on the track for meeting the future
challenges in the field of energy.
Jan Horst Keppler also
underlined that the adoption of the “Energy and Climate”
package has rightly been hailed as a success, as the EU,
quite stunningly, now has a de facto energy policy
looking forward to 2020. Mr. Keppler then presented the
main points of the recent Ifri paper on Franco-German
energy relations, focusing on the ability of the
French-German couple to shape the energy and climate
debate in the EU and the new contours of the energy
sector in both countries.
Commenting on a comparative table on Germany and
France’s overall energy situation (see PowerPoint
presentation on our website), Jan Horst Keppler
underlined that France is the world’s largest
electricity exporter, with her electricity production
being nearly as big as Germany’s. Both countries’
electricity markets are already highly integrated today
and the coupling of their power exchanges (Powernext and
European Energy Exchange) will be another important step
in this context. Currently, France exports nuclear
baseload and Germany exports peakload based on coal, gas
or wind.
On the delicate question of nuclear power, France and
Germany are separated by obvious differences, but they
also have common interests according to Mr. Keppler.
France, which produces 80% of her electricity from
nuclear, is currently building a new EPR reactor. This
is in accordance with public opinion, as there is a
generally good acceptance of nuclear. On the contrary,
Germany has taken the political decision to phase out
nuclear power by 2021; the 2009 parliamentary elections
are the last window of opportunity to reverse or modify
this phase-out. One should take into account that the
acceptance of nuclear is growing in Germany, with a
majority of citizens now favoring lifetime extensions.
This change of mind is linked to the economic crisis,
efforts to reduce CO2 emissions and high energy prices.
Coalition politics might however constitute a hurdle for
a change of position (only if a CDU/CSU-FDP government
emerges from the 2009 elections, there will be a good
chance for the phase-out being reversed). Overall, the
situation in Germany is less clear-cut than in France.
Despite these differences, France and Germany are
working together in the nuclear field, as Siemens holds
30% in Areva NP. An all-French buy-out of Areva NP is
regularly mooted, but the German government is strongly
interested in a continuation of this cooperation.
When it comes to power market liberalization, the
current situation in France is quite complex, as three
types of pricing coexist (regulated tariffs, liberalized
prices and special tariffs allowing the return from
liberalized prices to regulated tariffs). What is more,
wholesale prices are above regulated tariffs and rising,
while tariffs are declining. As the tariff is above the
marginal cost of nuclear but below its average cost, the
sustainability of the current system is in question. The
situation in Germany is different, as prices are
theoretically free. Historical relationships between big
companies are however limiting switching rates, and
there is growing popular discontent with high prices and
rents of power producers. As a result, legal procedures
against “price fixing” have been undertaken. Concerning
electricity networks, the situation in France and
Germany is similar, as networks are regulated in both
countries. The two governments are also sharing the same
position on unbundling, as they are engaged in a fierce
battle with the European Commission over ownership
unbundling. According to Jan Horst Keppler, this battle
is mainly symbolic and a test of wills. A last point on
energy networks concerns interconnections between both
countries: these are still imperfect, as they are
sometimes overloaded. Here, market-coupling will equate
prices and probably solve the problem.
Mr. Keppler then commented on both countries’ efforts
in the field of climate policy. He underlined that both
countries fully subscribe to the 20-20-20 framework of
the EU and pursue relatively ambitious policies. Due to
the large part of nuclear, the share of French emissions
under the EU ETS is smaller. France hence pays greater
attention to domestic projects. On the contrary, Germany
has voiced concerns about competitiveness issues in the
recent negotiations and insisted on more lenient
conditions for German industry (according to the adopted
compromise, 100% auctioning of emission permits will
only start by 2027 and export-oriented-sectors are
completely exempt). However, German carbon-based power
production did not receive additional concessions.
Addressing natural gas supplies, one should note the
differences in the overall situation: France’s share of
natural gas in her primary energy supply is 15% (with
27% of her imports coming from Russia), whereas this
share is 23% in Germany (with 36% of imports coming from
Russia). These numbers should be compared to those of
the whole EU, where the share of natural gas in the
primary energy supply is 26% (with 45% of imports coming
from Russia). So the often discussed question of
Europe’s energy relationship with Russia, the world’s
largest gas exporter, has different implications for
Germany and France. Both countries however, should
continue their cooperation on issues like investment and
availability of long term supplies, the Russian internal
demand, Russian exports to Asia and alternative
producers (in the Caspian Sea region, Iran, Iraq,
Qatar). According to Mr. Keppler, Germany and France
seem to have rather similar views on three key pipeline
projects: Nord Stream, Nabucco and South Stream.
Another important issue in Franco-German energy
relations concerns the debate on the reciprocal market
entry of new actors. In this context, the establishment
of a European energy oligopoly is in full swing, with
both German and French companies being active players.
There are however some signs that the great game of
mergers is finally coming to an end. In the
Franco-German case, EDF is today a key player in Germany
through EnBW, and the company also begins its
development in the gas sector. E.ON is now present in
the French market through ex-Snet/Endesa, whereas E.ON
Ruhrgas and GDF Suez have a good history of cooperation
in gas projects. RWE is currently the weakest of the
large players, due to its heavy reliance on coal. Some
questions should be asked about state intervention, as a
French law guarantees the French state at least 70% of
voting rights in EDF and the German government
implicitly protects RWE from foreign takeovers (with EDF
being a potential bidder).
In conclusion, French-German energy relations are
more “normal” today, but also less simple than in the
past. While energy remains at the intersection of
commercial, environmental and political interests,
France and Germany share a similar vision about the
interdependence of the political and economic spheres.
After the successful conclusion of the 2nd package on
energy and climate, some important topics remain for the
future: the 3rd package on electricity and gas market
reform, permitting the completion of the internal
electricity and gas market, the creation of an European
regulator, the creation of a common European
interlocutor with third parties, the establishment of
common rules for accompanying technologies with high
fixed costs in liberalized electricity markets.
Christophe Schramm started by
commenting on prior remarks on electricity networks.
When analysing differences between France and Germany in
this field, one should be aware that they are organised
in a quite different way: there are regional oligopolies
in Germany, but a single national grid operator in
France. Despite this difference, both countries had a
solid and common approach to ownership unbundling, as
both were opposed to the European Commission’s
proposals. However, this does not mean that France and
Germany are opposed to a larger market opening. On the
contrary, the coupling of the power exchanges into EPEX
Spot, which takes effect on January 1, 2009, is a real
success in this context. As France and Germany have
quite different sport market electricity prices (due to
their different choices in terms of electricity
production), it will be interesting to see the effects
of this merger of power exchanges. What is more, one
should not forget that both countries cooperate in the
field of nuclear waste, even if the political choices on
nuclear energy are different: there has been a recent
agreement on transport of nuclear waste.
France and Germany are also cooperating on the
delicate issue of energy security. This cooperation does
not only concern relations with producer countries, but
also energy efficiency, interconnections inside the EU
and strategic stocks. Much can be done in this field,
and progress seems more feasible than in the field of
foreign energy policy. Germany seems indeed to be less
interested than France in further Europeanizing energy
relations with energy suppliers, especially Russia. The
reason therefore lies in the different underlying
philosophies: Germany sees a higher level of
interdependence with Russia as the best solution,
whereas France advocates a better diversification of
resources.
Finally, the recent European “Energy and Climate”
package was a real issue in German-French energy
relations, as it was much debated by the public, the
media and the industry. French and German interests
concerning the package were quite different on some
points. Germany, for example, wanted free permits for
her energy-intensive industries in order to avoid
“carbon leakage”, whereas France preferred a border
adjustment mechanism. The package hence was a real and
difficult test for bilateral relations, but both
countries managed to find compromises, permitting the
setting of reduction targets for every country. In the
end, this test was hence beneficial for Germany and
France according to Mr. Schramm, as both countries could
contribute to a European consensus. The negotiations
were also remarkable insofar as the French position came
out to be, for the first time, “greener” than the German
one, as the French government seemed less influenced by
national industry interests.
Still, one has to acknowledge that Germany has the
biggest experience on renewable energies. Germany
therefore had a very positive impact on the Renewables
directive. If one compares both countries, Germany also
seems a bit more ambitious on renewables, even if both
countries now roughly follow the same line. The French
government has recently decided to move forward on
renewables, with the “Grenelle de l’environnement” and
50 measures for the development of sustainable renewable
energies in the next years. For this reason, it seems
likely that Franco-German energy cooperation will be
strongest in the field on renewables in the next years,
with both countries also cooperating on issues like the
International Renewable Energy Agency (IRENA) and the
Mediterranean Solar Plan in the framework of the Union
for the Mediterranean.
The presentations were then followed by
open public discussion. Questions were
asked on the specific steps France will take in
order to achieve her goals concerning renewable
energies, the link between unbundling and investment
decisions for important infrastructure projects and the
energy relations with Russia. Other questions concerned
the German policy on coal: Will there still be subsidies
in the future and how large a part coal will play in
German electricity production?
Commenting on these questions, Jan Horst Keppler
estimated that much less than the currently planned 30
new coal power stations will be built in Germany. On
ownership unbundling and its consequences on
investments, he believed that one should not
overestimate these consequences. What is more, there are
important differences between electricity and gas, which
have not always been understood by lawmakers. Christophe
Schramm explained that France plans to meet her goal of
23% of renewables in final energy consumption by
increasing energy efficiency and developing all kinds of
renewables, notably biomass and wind energy. This will
not be easy, as policymakers are increasingly challenged
by local protests against the development of new wind
farms. Hinrich Thölken finally commented on prior
remarks concerning planned gas pipelines: the German
government equally supports Nord Stream, South Stream
and Nabucco, as Europe needs more gas in the future.
Despite her good relations with Russia, Germany wants
direct access to Caspian reserves and hence supports
Nabucco.
Conference report written by Christian Schülke,
Junior Research Fellow at Ifri’s Energy Program
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