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Renewable energy development
July 2013
Executive Summary
the Public Thematic Report
his summary is intended to facilitate the under-
standing and use of the Court of Accounts’ report;
Only the report implicates the liability of the Court of
The responses of administrations and organisations
concerned are appended to the report.
of the Public thematic report by the
Court of Accounts
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Renewable energies are gaining ground but not reaching the
established targets
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A combination of challenges . . . . . . . . . . . . . . . . . . . . . . .
A need for long-term sustainable choices
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Executive summary
of the Public thematic report by the
Court of Accounts
rench energy policy is undergoing a major transition. Historically benefiting
from a lower carbon content energy and cheaper electricity than most other
major industrial powers, thanks in large part to its nuclear fleet, France has never-
theless set more ambitious targets in terms of renewable energy generation than the
majority of European countries.
This policy is carried out by a large number of public- and private-sector players.
The DGEC (Directorate General for Energy and Climate), in charge of general over-
sight, the ADEME (Agency for the Environment and Energy Management), the
CGDD (Department of the Commissioner-General for Sustainable Development)
and market regulator CRE (Energy Regulation Commission) are the core stakehold-
ers. The landscape of private-sector players is much more fragmented, highly diversi-
fied and not always structured. Major industrial groups and energy suppliers, includ-
ing market leaders EDF and GDF-Suez, work alongside a multitude of SMEs/VSEs
and often even individuals.
The implementation of this policy comes during a period of extensive changes and
uncertainties in the energy markets, in the wake of the Fukushima disaster and the
resulting reactions, and the development of unconventional hydrocarbons, particular-
ly in North America.
Under the terms of the European Directive of 2009, renewable energies are gen-
erated from renewable, non-fossil energy sources. They can be used to generate elec-
tricity and/or heat (biomass, biogas, aerothermal and geothermal heating pumps,
solar and geothermal power) or simply to generate electricity (wind power, hydropow-
er, tidal/wave power, solar PV power, etc.). Having already published a thematic pub-
lic report on biofuels, the Court excluded them from the scope of review. This report
therefore only covers renewable energies used to generate heat and electricity.
Executive summary
of the Public thematic report by the
Court of Accounts
Court of Accounts
Renewable energies are
gaining ground but not
reaching the established
for thirty years, the European
Union has undertaken to promote
renewable energies in a bid to reduce the
impacts of its energy consumption on
the environment, increase its energy
independence and also open up new
prospects for economic growth and
employment. With the adoption of the
energy-climate” package in 2009, EU
member states set even higher and more
binding targets. france has also made
the same commitment, but with highly
distinctive features compared to its
Benefits of the French
energy mix
french electricity output generates
low CO
emissions due to the predomi-
nance of nuclear and hydropower pro-
duction (86.8% of national electricity
output in 2011). france therefore
accounts for just 1.1% of greenhouse
gas (GHG) emissions, while contribut-
ing 5.5% to global GDP.
france also ranks 9
out of the 28
European Union member states in
terms of electricity prices, and 1
pared to its neighbours (Spain, Italy,
Germany, Belgium).
Renewable energies
are used more to gen-
erate heat than elec-
In 2011, the proportion of renew-
able energies in france used to generate
heat was 59.4% versus 40.6% used to
generate electricity.
for a long time, heat generation was
less encouraged at the European and
french levels, but has been climbing
since 2005 and has now become the
main use of renewable energies ahead
of electricity. This progress is mainly
attributable to the use of biomass, the
leading source of renewable heat
Renewable electricity generation has
also risen since 2005, but is still domi-
nated by hydropower, although wind
power has been growing steadily. PV
power has shot up since 2009, but has
yet to reach a significant level in the
french renewable energy mix.
Executive summary
of the Public thematic report by the
Court of Accounts
Targets still out of
reach despite real
france made a commitment to the
European Commission that it would
reach 23 % of gross final energy con-
sumption based on renewable energy
sources by 2020. This puts it behind
Ireland, Denmark and the United
Kingdom, as one of the top four of the
28 EU countries that will have the most
effort to make.
Its targets are already on the way to
being achieved, with greater progress in
electricity than in heat.
In 2011, france was in the average
of EU member states in terms of
renewable energies in gross final energy
consumption and was globally on track
in each of its sectors.
Renewable energies are gaining
ground but not reaching the
established targets
Chart No. 1: proportion of renewable energies by sector in france and targets for 2020
Source: Court of Accounts
of the Public thematic report by the
Court of Accounts
Renewable energies are gaining
ground but not reaching the
established targets
Even so, the efforts still to be
accomplished in the renewable electrici-
ty and heating sectors between 2011 and
2020 are respectively six and seven times
higher than those made between 2005
and 2011. Against this backdrop, with
renewable electricity generation initially
falling behind in 2011, the prospect of
achieving the 2020 targets has become
less likely.
Table No. 1: proportion of renewable energies in 2011
Share of renewable energies
by sector
2011 targets
2011 achievements
Heating and cooling
16.5 %
16 %
16.3 %
6.9 %
6.7 %
13.5 %
13.1 %
Source: CGDD/SoeS
Executive summary
of the Public thematic report by the
Court of Accounts
Court of Accounts
A combination of
Renewable energy production costs
are still higher than the cost of other
energy sources. They also vary widely
between sectors, but also within a given
sector, due to the wide diversity of
parameters at play (level of risk, techni-
cal characteristics of facilities, geo-
graphic location, etc.).
Some sectors are still a far cry from
the current production costs of nuclear
power (
49.5/MWh in 2011), particu-
larly solar PV and thermal power,
despite a constant decline in component
for electricity generation, and
according to figures published by
ADEME, hydropower is the least
expensive (
43/MWh -
while land-based wind power lies in the
middle with costs ranging from
62/MWh to
for heat generation, production
costs in the biomass and geothermal
sectors are relatively low under certain
conditions (respectively
56/MWh -
223/MWh and
50/MWh -
A combination of
of the Public thematic report by the
Court of Accounts
Source: Court of Accounts - ADEME data
Complex and unstable
support mechanisms
of variable effective-
The State implelents multiple forms
of often complex support mechanisms,
including in particular:
- purchasing by EDf and local dis-
tribution companies of output at guar-
anteed above-market prices. The excess
cost is covered by the CSPE (contribu-
tion to public electric utilities), or in
other words electricity consumers;
- tax aid for investment, mainly via
the sustainable development tax credit
and the reduced-rate VAT for renova-
tion works in homes more than two
years old;
- subsidies for renewable thermal-
biomass generation facilities and heating
grids, with the exception of individuals,
through the heating fund managed by
- co-funding of research and deve-
Energy sector
Production costs in
(discount rate: 8%)
Solar thermal
Solar PV
Solar thermodynamic
Offshore wind power
Land-based wind power
Anaerobic digestion
Table No. 2: discounted production costs by sector (ranges)
A combination of
Executive summary
of the Public thematic report by the
Court of Accounts
All of these mechanisms have expe-
rienced in different ways difficulties in
their application, due primarily to exces-
sive instability and sometimes to a lack
of consistency in the legal framework.
Organisation of public authorities
The State is inadequately organised
to ensure the implementation of the
renewable energy development policy.
Its expertise in the related industrial sec-
tors, jobs and production costs is insuf-
ficient. It does not evaluate the socio-
economic impact of its decisions, to the
point where the purchase prices of
renewable electricity are not always well
adjusted. Its control capabilities are
notably insufficient, with cases of fraud
already on record.
Legal framework
The State has not sufficiently adapt-
ed the legal framework of the policy,
which would allow to involve local
authorities more closely in the achieve-
ment of its targets. Existing instru-
ments, such as SRCAEs (regional cli-
mate, air and energy schemes) and
PCETs (regional energy-climate plans),
have not produced the expected results.
added to this are the large number and
complexity of regulatory texts. for
example, in the wind power sector,
despite recent simplifications, it takes
twice as long to set up a wind farm in
france than it does in Germany.
Technical problems
There are several types of technical
- the power grid, currently based on
a small number of production centres,
ultimately needs to be adapted to much
more decentralised production sources;
- the intermittency of wind and
solar power output needs to be man-
aged, even if this problem has been
overcome for now;
- lack of inexpensive electricity stor-
age methods.
Physical limits and usage conflicts
finally, the sustainable development
of renewable energies is confronted
with physical limits (e.g. hydraulic poten-
tial, wind distribution) as well as usage
conflicts for certain energy sources :
creation of new hydropower plants or
preservation of biodiversity for exam-
ple, or competition for the use of forest
Executive summary
of the Public thematic report by the
Court of Accounts
Court of Accounts
A need for long-term
sustainable choices
The achievement of the targets set
for 2020 and beyond are expected to
have a high cost to the country. The sus-
tainability of the long-term policy there-
fore calls for making renewable energy
dynamics in order to reduce the amount
of public aid involved. To this end, the
cost of carbon must be assessed at a fair
Resources should be directed to the
most effective energy sectors and sup-
port mechanisms.
Support for renewable
energies comes at a
high cost
Expenditures incurred by the com-
munity for the development of renew-
able energy sectors in the generation of
electricity and heat totalled
14.3  bn
between 2005 and 2011.
The CSPE (contribution to public
electric utilities), CIDD (sustainable
development tax credit) and reduced-
rate VAT for the renovation of existing
homes are the most expensive measures
for the community.
Their costs have increased signifi-
cantly since 2005, due in large part to
the rise in the CSPE renewable energies
component; however, this increase is
still limited compared to what it could
end up being for 2013. for this year
alone, the CRE (Energy Regulation
Commission) has estimated that the
CSPE will amount to
3 bn, including
2.1 bn for the solar PV sector.
Between 2012 and 2020 (9 years),
without any major changes to the policy
implemented up to now, the total vol-
ume of the CSPE renewable energies
component could reach approximately
40.5 bn, incurred directly by individual
and professional electricity consumers,
versus a total of
3.3 bn between 2005
and 2011 (7years).
A need for long-term
sustainable choices
Executive summary
of the Public thematic report by the
Court of Accounts
Reduced-rate VAT
for renovation of
existing homes*
Heating fund
Research and devel-
Source: Court of Accounts
* Estimate of average annual value out of a total of
1,800 M.
** Excluding research on storage and cross-disciplinary programmes.
Table No. 3: total cost of renewable energy support policy for the 2005-2011 period
The policy’s
economic impacts
remain inadequate
The socio-economic impacts of the
measures undertaken have yet to match
the costs incurred. france’s insufficient-
ly structured industrial sectors have not
yet gained a significant position in the
global market. for example, the solar
PV sector, already substantially under-
mined by Chinese competition, has also
been destabilised by the up-and-down
of the support policy. The offshore
wind power sector is massively depend-
ent on the the North Sea market
prospect, which remains uncertain for
the time being.
Despite uncertain estimates regard-
ing methodology (the number of jobs
generated is not included, for example),
the gross number of direct jobs created
rose from 58,460 overall in 2006 to
A need for long-term
sustainable choices
Executive summary
of the Public thematic report by the
Court of Accounts
83,260 in 2012 following a peak of
98,580 in 2010. The solar PV sector
recorded the biggest drop, due to the
decline in support for the policy starting
in 2010. However, these estimates
remain far behind the ambitious targets
established in france’s 2009 national
action plan for renewable energies,
which pointed to the creation of “sever-
al hundred thousand jobs.”
furthermore, some impacts of the
policy were not anticipated, including in
particular the disorganisation of the
energy market. The rapid development
of renewable energies, benefiting from
guaranteed purchasing regardless of the
supply-demand balance on the market,
has ramped up price volatility and low-
ered the profitability of gas-fired ther-
mal power plants, which are neverthe-
less necessary to manage consumption
Parameters insuffi-
ciently taken into
account up to now
The effects of the renewable energy
development policy cannot be measured
exclusively on a 2020 horizon. Starting
in 2005, france, like the European
Union, began considering its commit-
ment from a longer-term perspective,
with the notable aim of dividing its
GHG emissions by four by 2050.
In addition, the goal of reducing the
proportion of nuclear power in the
by 2025, announced by the
President of the Republic after the envi-
ronmental conference of September
2012, calls for france to undertake a
commitment over several decades. To
this end, the energy policy must there-
fore remain sustainable.
In turn, CO
emissions have to be
assessed at their fair value, either
through market dynamics or taxation,
which is not the case at present. Without
an effective carbon market, the valua-
tion of CO
is not included in the calcu-
lation of production costs for the vari-
European Union Emissions Trading
Scheme (EU ETS), established in 2005,
carbon is currently valued at around
per tonne. However, at this price, the
production of renewable energies can-
not be made economically profitable.
To avoid the destabilising effects of
the generation of renewable electricity
on the market (prices unrelated to costs,
disturbance in the order in which plants
are called up by the grid, drop in prof-
itability of peak capacities, negative
price situations), france needs to align
its support mechanisms with price fluc-
tuations on the energy market. Two
instruments - green certificates and
already used elsewhere in Europe, might
be considered provided that an accurate
assessment of their impacts is per-
The expansion of renewable ener-
gies also calls for the adaptation of con-
sumption methods in order to encour-
age consumers to adopt more energy-
A need for long-term
sustainable choices
Executive summary
of the Public thematic report by the
Court of Accounts
efficient practices. A new consumption
model needs to be defined. Self-con-
sumption is a possible option for indi-
vidual installations but, without efficient
storage mechanism, it would have to be
accompanied by voluntary consumption
control during peak periods and by the
shutdown or limitation of production
during periods of low consumption.
finally, given the cost of grid adap-
tations, estimated by ERDf and RTE at
5.5  bn on a 2020 horizon, thought
needs to be given to grid developments
alongside the development of renew-
able energies.
Choices must be made
firstly, to play a role in the industri-
al and commercial management of
future renewable energies, france can-
not sacrifice research (particularly on
storage mechanisms or grids) for budg-
et savings.
Secondly, in order to maintain
france’s assets in the energy sector
while promoting the development of
renewable energies, redistribution of
resources is critical between support
measures as well as between energy sec-
france must also adapt its support
to energy sectors based on their contri-
bution to energy production.
Support mechanisms could also be
adapted to ensure their efficiency.
Purchase prices would thus be reserved
for mature sectors such as land-based
wind power, while calls for tenders
would be used for sectors that are
behind in terms of achieving their
capacity targets. A buying obligation
would be established in exchange for the
regular revision of prices in order to
incorporate changes in the markets spe-
cific to each energy sector. Even though
support for geothermal, biogas and
solar thermal energies needs to be re-
assessed, the capacities of the heating
fund must not be limited by budgetary
adjustments. Tax mechanisms must go
hand-in-hand with evaluations and con-
trol mechanisms.
Other support mechanisms of ques-
tionable effiency could be ruled out.
The overlapping of support mecha-
nisms (purchase price and calls for ten-
ders) for a given category of installa-
tions is is to be prohibited. Calls for ten-
ders launched for major biomass-based
heating/electricity cogeneration, just
one-third of which ends up being com-
missioned and which destabilises local
resources already under pressure, must
be stopped.
The question of using the CIDD
(sustainable development tax credit) to
boost the acquisition by individual con-
sumers of equipment for their comfort
or commitment to renewable energies,
needs to be raised.
finally, france must decide between
the development of renewable energies
and the protection of landscapes and
A need for long-term
sustainable choices
Executive summary
of the Public thematic report by the
Court of Accounts
Source: Court of Accounts
Chart No. 2: proportion of renewable energies in public spending and
energy generation
Executive summary
of the Public thematic report by the
Court of Accounts
establish a centralised set-up for
statistical monitoring to gain the nec-
essary transparency to inform deci-
sion-making, particularly regarding
knowledge of production costs by sec-
tor, jobs and markets;
simplify the legal framework
applicable to the production of renew-
able energies (geothermal energy, land-
based wind power);
set up a timetable and map out
renewable energies, taking into account
the constraints associated with connec-
tion to the electricity networks;
give the priority to calls for ten-
ders 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
organise an efficient control sys-
tem for installations receiving govern-
ment 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 sup-
porting renewable energy sources, off-
set by the CSPE (recommendation
already issued by the Court in 2011).