French nuclear shift to have global impact


December 1, 2014

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Illegal drone flights over French nuclear sites have raised fresh concerns about the sector.

Over the last couple of months there have been sightings of more than a dozen drones at the country’s 19 nuclear sites. French authorities haven’t yet been able to establish if they are the work of civilians or something more sinister. Either way, they have raised a security concern about a sector already facing reduced demand after the 2011 Fukushima disaster.

These difficulties are further pushing France’s large energy firms away from nuclear and towards renewables, including wind farms.

This move to renewables is being underpinned by legislation, which includes new laws being put in place by energy minister Segolene Royal. It is an important shift that will have a big impact on wind outside of France’s borders.

In October, a majority of the lower house of the French parliament adopted a version of an energy transition bill that will cut bureaucracy for renewable energy schemes. It plans to cut renewable energy red tape, while putting a cap on nuclear power.

The government is also seeking change in French developers’ approaches. It has proposed Areva should appoint former Peugeot chief Philippe Varin as chairman; and has ousted Henri Proglio as EDF chief executive, replacing him with Thales boss Jean-Bernard Levy. These are big changes at the top of two of the world’s most influential nuclear companies.

And we need hardly mention the government fight earlier this year to avoid all of Alstom’s wind energy assets falling into GE’s hands. So where does leave French energy?

Inside France, this shift towards wind rather than nuclear looks like good news. The nation is famous for taking significant steps to protect its industry — even at the expense of its economic health —and it is good that the government is looking to pin its hopes on wind. In turn, we would expect strong policies that enable France to grow its supply chain.

The shift towards wind, rather than nuclear, should also force the likes of Areva and EDF to increase their global wind influence, especially in key emerging markets.

We’ve seen Spanish firms like Gamesa and Iberdrola pushed to expand overseas due to the problems in their home market. To
date, French firms have not shared that same international drive.

And there’s another thing. If French manufacturers are pushed to expand their global influence then it will increase pressure on the likes of GE, Siemens and Vestas – three global heavyweights. The increased competition may also force these giants to become more specialised – whether that is by market or technology type.

GE is only just starting to move beyond its very successful strategy of focusing on a niche product portfolio. Siemens has been heavily focused offshore and is now seeking to redress the balance. And Vestas has relied heavily on the strength of its market legacy and technological prowess, to lead the global market.

As French energy policy shifts and wind really takes flight, there will be significant impacts domestically. However, the ripples in the global market are set to be more significant still.

That much – like a drone over a nuclear site – is plain to see.

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