Irreconcilable Aims Generate Uncertainty Over Nuclear
BMI View: Despite President Hollande vowing to reduce France's reliance on nuclear power during his 2012 election campaign, the level of political support for the scheme appears questionable; as does the feasibility of cutting nuclear without spiking electricity prices and damaging the competitiveness of French industry - another key election pledge.
President Francois Hollande and his Socialist party made the initial promise as part of an electoral pact with the anti-nuclear Greens and, as a consequence, it appears he has been left in a difficult position. While he has promised an energy transition that would see renewables grow at the expense of both nuclear and fossil fuels, the problems associated with phasing out nuclear - and the huge costs involved - are evident across the border in Germany. As such, it is clear that the cost of such a transition to France's already spluttering economy could be significant - something that is unlikely to be popular with the electorate and may strain France' already fragile financial position.
At the very least, the French government's muddled position on nuclear energy is creating a great deal of uncertainty. Hollande has yet to detail how he will cut electricity generation from nuclear from around 75% to 50% of the generation mix by 2025; a situation that, in our view, is indicative of the fact that his competing aims will be very difficult - if not impossible - to reconcile. To this end, we are not the only ones to question the government's ability to meet its ambitious nuclear targets. A government commission, the Parliamentary Office for Evaluation of Scientific and Technological Options (OPECST), published a report in September 2013 which found that France would be vulnerable to price shocks if the government persists with its nuclear phase out. OPECST called for a delay in the start of the nuclear phase-out programme to 2030, and reported that a 50% reduction in nuclear energy generating capacity is more realistic by 2050.
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