Heat pumps and electricity price control in the limelight of the French Government’s recent plans to accelerate the green transition • News from FEDENE’s Energy Transition Meeting – district heating a victim of its own success? • The call for tenders for the mega contract to heat the City of Paris has been announced
In his speech to the Elysée and the Ecological Planning Council September 25, President Macron announced the intention to triple the domestic production of heat pumps in France before 2027. President Macron also vowed to present a strategy to control electricity prices in October this year, along with a strategy to renovate social housing buildings to achieve more climate-neutral houses.
President Macron indicated that the heat pump will be particularly promoted as a step to replace gas boilers in specifically rural areas. Nevertheless, it is not unlikely that the new strategic focus on heat pumps will impact the energy market in general. President Macron notably indicated that the strategy would require reshoring of component manufacturing currently taking place in Asia as well as the training of up to 30 000 heat pump installers in the coming years.
While it is yet unclear exactly what regulation or subsidies will be mobilized to promote heat pumps, La Tribune hints at several instruments that could benefit manufacturers of heat pumps in the French market, such as tax credits, eco-conditionality of financial support, and access to land for R&D.
The speech also outlined several other key areas that will be subject to scrutiny in coming years, including the last French coal power plants. The plants Cordemais (Loire-Atlantique) and Saint-Avold (Moselle) will be transformed biomass-powered plants as part of the coming development. Furthermore, the French domestic electric vehicle market will be an increasing focus in coming years, and the French Government has expressed the ambition to manufacture one million domestically produced electric cars by 2027.
Read more in news article from Mes Infos
On September 14, the Paris City Hall launched the call for tenders for the contract to operate the concession of the production and distribution of heat to the City of Paris for the next twenty-five years. The concession is among the biggest in Europe, with heat distribution to approximately six thousand customers, including all hospitals in Paris. The contract has been described as a mega deal, considering that it is anticipated to bring in an estimated 15 billion in turnover over the duration of the concession.
Representing 20% of the total district heating market in France, the contract is expected to attract the interest of the largest actors in the French energy sector. However, Les Echos outline that many market players will likely be cautious considering what has been described as unclear tender specifications with no designated locations for future plants.
Engie, in charge of the concession today and having already won the 20-year-long contract for the district cooling network in the City of Paris in 2021, is among the hot candidates for the call for tenders. Les Echos outline that other actors are likely to put up competition, notably highlighting a consortium consisting of Dalkia, Eiffage, and RATP.
Read more in news article from Les Echos
On September 20, 300+ energy sector players gathered for the French industry association FEDENE’s 27th Energy Transition Meeting, to debate actions needed to meet the challenge of heat decarbonization of the energy sector, which for some time has been at the heart of France’s energy policy. While not the only subject of the meeting, the attendees touched upon district heating networks’ role in the decarbonization strategy, and notably recent financing challenges in the sector.
French district heating networks are facing challenges with insufficient access to the available funding. Despite the 800 million euros promised by the Government to promote sustainable district heating projects, the Ecological Transition Agency (ADEME) are struggling with bottlenecks in administering its heat fund. France’s decarbonization strategy has increased the number of projects in the sector, and some 38 projects awaiting investigation by ADEME since mid-2023 is testament to the increased workload faced by ADEME. In an article in Les Echos, Frank Lacroix, Executive Vice President of the Engie Group, outlines that Engie has “four times more requests for connections to district heating networks than the previous year”. With reference to the increase in sustainable district heating projects and difficulties with accessing funding, both Les Echos and Le Moniteur are posing the question if French district heating networks have become victims of their own success.
Read more in news article from Le Moniteur
Read more in news article from Les Echos
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