T

HEMATIC

P

UBLIC

R

EPORT

Paris, 25 July 2013

Renewable energy

development policy

France benefits from a lower carbon content energy and cheaper electricity than most other major

industrial powers, thanks in large part to its hydropower and nuclear fleets. As such, it

has set more

ambitious goals than many other European countries

in terms of renewable energy, with a target of

23% gross final consumption of energy from all energy sources combined by 2020, versus 10.3% in

2005.

In its report, the Court analyses the conditions for reaching these goals in the heating and electricity

sectors, which represent 59.4% and 40.6% respectively of the use of renewable energies (excluding

biofuel).

1)

Increasing effort to be made

Less promoted for a long time at the European and French levels, heat generation has risen since

2005 and constitutes the leading use of renewable resources, ahead of electricity. Renewable electricity

generation has also picked up since 2005. Hydro power is still predominant, although wind and PV power

are steadily increasing.

In 2011, France very nearly met the target it had set for itself. The proportion of renewable energies

(13.1%) was higher than the average for other European Union countries.

The 23% target set for 2020 will be harder to achieve, however, because more effort will have to be

undertaken between 2012 and 2020 compared to the 2005-2011 period. Additional renewable heat and

electricity generation will have to be six to seven times higher than that already achieved.

2)

An array of challenges

Production costs for most renewable energies

, which vary significantly between sectors and even

within sectors,

are still much too high for their deployment without public support

:

-

on the whole, solar energy is exceedingly more expensive than other energy sources and also

entails a wide range of production costs;

-

land-based wind energy is in an intermediate position, often very close to generating a profit,

and is therefore on the verge of becoming competitive;

-

production costs for energy generated from biomass, geothermal heat or hydropower are the

lowest overall.

The State has implemented multiple

and often complex financial aid mechanisms

: investment aid,

production purchasing at guaranteed prices, tax measures and funding for research programmes.

It is

inadequately organised

, spreading its efforts too thinly and failing to sufficiently evaluate the socio-

economic impacts of its decisions, particularly in terms of jobs and the trade balance. The

legal

framework

does not facilitate the involvement of local authorities.

In addition, the

social acceptability

of renewable energies, their physical constraints and even

conflicts of use (particularly regarding bodies of water and use of biomass) create problems that are

difficult to overcome.

3)

Long-term sustainable choices are needed

Achievement of the targets set for 2020 and beyond will come at a high cost to the country

,

and raises questions as to their sustainability.

Total public costs of the renewable energy development policy can be estim

ated at €14.3

bn for

2005-

2011, including €3.3

bn for the CSPE (contribution to public electric utilities).

Without undermining the development policy implemented up to now, and taking into account the

CSPE alone, the cost could reach €40.5

bn for 2012-2020, supported directly by electricity consumers

(individuals and professionals alike). Added to this are tax expenditures, other fiscal aid mechanisms to

encourage investment and public funding for research. At the same time, the cost of adapting the

netwo

rks has been estimated at €5.5

bn by ERDF and RTE on a 2020 horizon.

The question of sustainability is all the more significant in that expected benefits of the financial aid

granted to the renewable energy sector are simply not there, either in terms of industrial development or

job creation.

In order to maintain France's assets in the energy field while supporting the development of

renewable energies,

choices must be made, to begin with between the sectors to be supported

,

particularly in terms of the cost of their support relative to their contribution to the energy mix.

The

efficiency of aid mechanisms

(purchase prices, calls for tenders, investment aid) must also be a key

criterion.

Furthermore, the long-term sustainability of the policy also requires a realistic valuation of the cost of

CO

2

emissions, either by market mechanisms or taxation.

4)

Recommendations

The Court has issued eight recommendations:

establish a centralised set-up for statistical monitoring in order to gain the necessary transparency

to inform decision-making, particularly regarding knowledge of production costs by sector, jobs and

markets;

simplify the legal framework applicable to the production of renewable energies (geothermal

energy, land-based wind power);

set up a timetable and map out renewable energies, taking into account the constraints associated

with connection to the electricity networks;

give the priority to calls for tenders for technologies that have fallen the furthest behind in achieving

their capacity and installation targets, which do not have purchase prices set by decree, in order to

avoid windfall effects;

organise an efficient control system for installations receiving government aid, particularly in the

solar and biomass sectors;

favor financial support for the most efficient installations (given their cost, their share in energy

production and their job content);

reallocate funds in the

“

heat fund

”

to more efficient energy sectors;

revise the principle according to which only electricity consumers are responsible for paying the

cost of supporting renewable energy sources, offset by the CSPE (recommendation already issued

by the Court in 2011).

Read the report

Press contact:

Ted MARX - Head of Communication - Tel: +33 (0)1 42 98 55 62-

tmarx@ccomptes.fr

Denis GETTLIFFE - Head of Press Relations - Tel +33 (0)1 42 98 55 77 -

dgettliffe@ccomptes.fr

Follow the Court of Accounts at @Courdescomptes