The public sector will play an important but secondary role in financing the French energy transition, according to a new study by CDC Climat. The state-funded think tank believes an additional investment of 20 billion euro per year is needed to complete the energy transition. EurActiv France reports.
The study gives a broad overview of France’s fight against climate change.
CDC Climat closely examined all of France’s renewable energy and energy efficiency investments from 2011, the country’s renewable energy investment high point.
Over 22.2 billion euros were invested in low carbon equipment and infrastructure, according to CDC Climat, a subsidiary of the Caisse des Dépôts group, dedicated to the energy transition.
But France still has a long way to go to meet its targets on the reduction of greenhouse gas emissions, it said.
France’s total private sector investment in renewable energy for 2011 was €9 billion, bolstered by 1 billion euros in state subsidies. Energy efficiency was the next most important area, attracting 8.3 billion in investment.
During the national debates, the total annual investment required to accomplish the energy transition was estimated at 50 billion euros.
The President Director General of CDC Climat, Pierre Ducret, said that “the debates greatly dramatised the need for extra financing. We need to roughly double investment, which is well within our capability. The step up is not so high”. According to the CDC Climat study, France needs to invest an extra €20 billion per year.
Private sector leading the way
More than half of France’s investment in renewable energies and energy efficiency in 2011 came from private businesses, which contributed 11.1 billion euros to the energy transition.
The next largest investors were French households, with a contribution of €5.9 billion, mainly in the construction sector, followed by the government, who invested 5.2 billion euros, of which 4.8 billion were allocated to the transport sector.
Comparisons with Germany
In 2010, Germany invested 1.5% of its GDP, or 37 billion euros, in the fight against climate change, while France’s investment represented 1% of GDP. The study concluded that France would need to increase its investments to 30 billion euros in order to compete with Germany, blaming France’s slow uptake of new renewable energy sources for the difference.
The energy transition was a central part of François Hollande's presidential campaign in 2012, and has been long-awaited.
On 14 October, the French Parliament approved the energy transition bill, which aims to halve the country's reliance on fossil fuels and reduce the role of nuclear energy by investing in renewable energy.
Energy consumption should be reduced by 30%, and greenhouse gas emissions by 40% by 2030, and 75% by 2050, according to the bill.
- Panorama on climate financing in France (in French)