GERMANY AND FRANCE’S ENERGY MARKETS DO NOT COMPARE WELL. THIS IS BECAUSE GERMANY IS TAKING A COMPLETELY DIFFERENT DIRECTION THAN FRANCE IN ENERGY MATTERS.
GERMANY IS INCREASINGLY RELYING ON RENEWABLE ENERGIES. IN ELECTRICITY MARKETS, GERMANY WANTS TO USE NATURAL GAS FOR BASE-LOAD ELECTRICITY REQUIREMENTS. FUKUSHIMA PLAYED A MAJOR ROLE IN GERMANY’S DECISION TO PRIORITIZE NATURAL GAS. THIS DOES NOT MEAN THAT NATURAL GAS DOES NOT PLAY A ROLE IN THE FRENCH ENERGY MARKETS, BUT COMPARATIVELY, FRANCE RELIES MORE ON A STABLE POWER GRID FED BY RELIABLE ENERGY SOURCES. THIS IS ALSO EVIDENT AT EU LEVEL, WHERE GERMANY IS TRYING TO GIVE NATURAL GAS PREFERENCE OVER NUCLEAR ENERGY.
FRANCE IS MUCH MORE DEPENDENT ON NUCLEAR ENERGY. THIS MEANS THAT IT IS MUCH EASIER FOR FRANCE TO PRODUCE ELECTRICITY MORE CHEAPLY. LOWER ELECTRICITY PRICES FOR END CONSUMERS AND INDUSTRY PLAY A ROLE IN FRANCE’S DECISION TO EXTEND THE OPERATING LICENSES FOR SOME OLDER NUCLEAR POWER PLANTS.
1. IN A COMPARISON, FRANCE PERFORMS BETTER THAN GERMANY IN TERMS OF RELIABILITY OF ELECTRICITY SUPPLY. THIS IS BECAUSE FRANCE CAN COVER ITS BASE LOAD OF ELECTRICITY. IT IS ALSO EASIER FOR FRANCE TO PURCHASE ENERGY THROUGH THE MAJOR OIL COMPANIES. SIMPLY PUT, FRANCE HAS MORE GEOPOLITICAL INFLUENCE THAN GERMANY.
France has focused its energy policy on the demands and needs of the domestic economy. France has made efforts to protect the French energy market and achieve a degree of energy independence that does not exist in Germany. France also has easier access to the global midstream for oil and gas, in part because it is a major player in the upstream business. This certainly gives France more leverage over energy sources. At the same time, France has never exited nuclear energy. Even at the time when both countries, Germany and France, considered nuclear energy as a pillar of the energy industry, France used nuclear energy to a much greater extent than Germany to meet primary energy needs in France.
Germany has begun the transition to renewable energy, and that brings major obstacles that must be overcome. Among other things, this means that Germany must find a way to store electricity more effectively through BESS. Natural energy storage systems such as salt caverns, where energy can be stored in brine, are being explored. They are not yet mature. Natural gas storage is another important component and is far more promising. In addition, Germany relies heavily on natural gas. Germany generally obtains gas from pipelines, although it is open to LNG supplies.
All in all, France is able to supply its population with cheaper energy, and can obtain it almost anywhere and in any form required, be it liquid, gas or temporarily transmissive. Germany has taken a more environmentally conscious approach, one could argue. This means additional costs on top of the already high energy costs in the country. This could undermine industrial growth in the long run. Energy costs are particularly important for a country that relies so heavily on exports.
We have written about this particular issue before and would like to recommend the following link for more information if you are interested. We take a closer look at the energy policy consequences.
France is clearly in a better position to supply its population with energy.
The German energy model can only work if Germany commits to remaining a leading exporter of renewable energy technologies. This could lower the cost of producing renewable energy technologies and make the construction of such plants in Germany more attractive.