BE 2023 Synthese - ENGLISH

Overview

The year 2022 was marked by three independent and simultaneous energy crises that, combined, placed the French power system under strain: threats to gas supply following Russia's invasion of Ukraine, leading to a surge in prices; a crisis in French nuclear power generation (at its lowest since 1988); and a hydropower generation crisis due to low rainfall (at its lowest since 1976). Despite this very unfavourable context, the French power system showed resilience and managed to avert supply disruption. This can be attributed to the decrease in electricity consumption within France and neighbouring countries, well-functioning exchanges with neighbouring countries in accordance with the rules of operation of the European common market, and the securement of gas supplies.

During 2023, the determinants of security of supply returned to a more favourable situation:

• electricity generation from all low-carbon sources has increased significantly (nuclear power, hydropower, wind power, solar power);
• consumption decreased compared to the previous year, facilitating the coverage of demand, in line with the trend observed in the autumn of 2022;
• price levels decreased both on the spot market and the futures markets, with a reduction of the risk premiums held by market players;
• the electricity exchange balance once again became significantly export-oriented, reaching 50.1 TWh, and France reclaimed its traditional position as the leading electricity exporter in Europe (in volume);
• emissions related to electricity generation reached their lowest level since the early 1950s.

Thus, the power system returned to a situation of equilibrium, in which concerns about security of supply have been largely mitigated. This "new balance" does not, however, constitute a return to the pre-crisis situation, given the substantial evolution in the production of various sources and the consumption structure since the late 2010s.

Detailed analysis

The clear downward trend of French consumption, which began in the autumn of 2022 amid the worsening energy crisis, continued throughout the year 2023. As a result, the volume of consumption (adjusted due to weather variations) for the year decreased by 3.2% compared to that of the previous year, reaching 445.7 TWh.

The total volume of electricity generation increased by 11% between 2022 and 2023 to 494.7 TWh, while remaining below pre-2020 levels.

• The availability of the nuclear fleet recovered during the year, compared to the historically low levels reached in 2022, but it remained significantly lower compared to that of the pre-crisis years. The volume of nuclear power generation rose to 320.4 TWh (compared to 279.0 TWh in 2022 and 394.7 TWh on average between 2014 and 2019);
• The year 2023 was characterised by power generation records for both wind power (50.8 TWh) and solar power (21.6 TWh), which together accounted for nearly 15% of electricity generation, thereby contributing to security of supply and the increase in the supply of low-carbon electricity in France and in neighbouring countries through exchanges. In 2023, France saw record new generation capacity additions for solar power and offshore wind;
• Hydropower generation (58.8 TWh) maintained its position as the second-largest electricity source. Notably, there was a significant recovery compared to 2022, primarily attributed to more abundant rainfall that enabled reservoir levels to remain high throughout the year;
• The simultaneous reduction in demand and the increase in low-carbon production collectively diminished the reliance on fossil fuels, particularly gas (with gas generation decreasing from 44.0 TWh in 2022 to 30.0 TWh in 2023);
• The generation of electricity from coal has reached an unprecedented low and currently holds an insignificant position in the French energy mix (0.17% of French electricity generation in 2023).

Overall, low-carbon sources continued to largely dominate the electricity mix: for nearly twenty years, French electricity generation has been among those with the lowest emissions in terms of greenhouse gases in Europe. This was confirmed in 2023 with nearly 92% low-carbon production. These factors have strengthened the national power system's role as a key contributor to the decarbonisation of Europe’s electricity mix, through the export of a significant share of its low-carbon production.

The increase in electricity generation has led to reduced dependence on imports and increased export volumes: after an exceptional year in 2022, marked by a net import balance (16.5 TWh net yearly imports) for the first time since 1980, France returned to its traditional role as a net electricity exporter in 2023, with a balance of 50.1 TWh.

The easing of pressure on electricity supply had a positive impact on market prices, bringing them back to levels comparable to those seen in 2021. The sharp mismatch between forward prices and market fundamentals observed in 2022, reflecting a risk premium specific to France due to market players' fears about the security of supply (which were disproportionate to reality), gradually diminished in 2023, leading to a convergence between France and neighbouring countries¹ 

In 2023, electricity consumption in France, adjusted for weather and calendar effects²,

represented 445.7 TWh, a decrease of 3.2% compared to the previous year, when consumption had already reached a low of 460.2 TWh due to the energy crisis. In 2023, it was 6.8% lower than pre-crisis consumption (average 2014–2019), below the level reached in 2020 (458.7 TWh), a year marked by the Covid pandemic from spring onwards, and a fortiori below that of 2021, when consumption slightly recovered (465.4 TWh). One has to go back to the early 2000s to find consumption levels comparable to those of 2023.

In addition, the decrease in consumption between 2022 and 2023 is one of the largest ever observed: it is more significant than those observed between 2021 and 2022 (-1.1%), and between 2008 and 2009 following the global economic crisis (-1.5%), and very close to the decrease in consumption between 2019 and 2020 (-3.7%).

The downward trend observed in 2022, which intensified from autumn onwards at the height of the crisis, continued throughout 2023. This affected all sectors (residential, industrial, tertiary). The results of the survey carried out by RTE in partnership with the IPSOS institute on a large panel of French people (13,000 people) suggest that this reduction is not only the result of voluntary sobriety measures, but also stems from a reaction by the population and economic players to the rise in prices in the economy as a whole.

This prolonged fall in consumption is due, on the one hand, to ongoing efforts to promote energy savings in public administrations, in businesses and in households, with the launch of a second government plan in October 2023.

On the other hand, consumer surveys and the sharp fall in industrial consumption seem to indicate that the worsening macroeconomic situation was an even more decisive factor in the fall in electricity consumption in France and Europe, driven by persistent inflation (4.9% in 2023 compared with 5.2% in 2022, according to INSEE). In particular, 27% of the structural decline in consumption is attributable to large industrial consumers, even though this category account for only about 14% of total electricity consumption over the period 2014–2019. Companies are also more exposed to changes in energy prices than individuals: INSEE estimated at the beginning of 2023 that professional consumers would experience an 84% increase in electricity prices over the whole of 2023³. For individuals who have opted for the regulated tariff, the price shield implemented in 2022 helped to smooth out and limit the impact of price hikes for households, even though its ceiling was raised twice in 2023 (first by an average of 15% on 1 February, then by an average of 10% in August).

The high temperatures in 2023, the second warmest year on record in France, have pushed "gross" consumption (without adjustment for climate effects) further down. It reached 438.7 TWh, its lowest level since 2002.

Due to the consequences of the energy and geopolitical crises, consumption has remained for several years at much lower levels than the figures observed until 2019. This trend is set to continue in the short term, against a backdrop of macro-economic constraints and the continuation of energy-saving measures, which for households have largely been based on simple gestures (lowering the temperature, switching off unnecessary lights and appliances on standby, adopting energy-saving cooking methods, etc.).

However, the effects of the current economic situation are part of a wider dynamic of changes in consumption patterns: development of energy efficiency, electrification of end-use consumption, changes in the production structure, energy saving. These changes are having contrasting effects, and should result in an upward trend over the next few years, which is necessary if France is to achieve its objectives of reindustrialising the economy and moving away from fossil fuels, although it is difficult to estimate when this upward trend will materialise given the uncertainties that characterise the current economic climate.

The total volume of electricity produced in France in 2023 reached 494.7 TWh, an 11% increase compared to 2022, a year which was characterised by an all-time low in production since 1992 (445.5 TWh).

However, French electricity generation in 2023 remains relatively low compared to recent history, and in particular lower than in 2020 (499.8 TWh).

Nuclear and hydropower generation volumes rose, after a particularly bad year in 2022, when they were hit hard, mainly by the crisis caused by stress corrosion cracking, but also partly by low rainfall. Nuclear power generation amounted to 320.4 TWh, an increase of 41.5 TWh compared to the previous year, thanks to better availability (corresponding to about four additional reactors on average over the year). However, this volume remains lower than those of previous years (394.7 TWh on average over the period 2014–2019). Hydropower generation amounted to 58.8 TWh, an increase of 9.2 TWh compared to the previous year, close to usual levels (61.7 TWh on average over the period 2014–2019), despite a period of marked drought at the beginning of the year.

Wind and solar power generation reached record volumes. Wind power generation (onshore and offshore) has firmly gained the third place in the French generation mix, with 50.8 TWh produced (compared to 38.6 TWh in 2022), far surpassing the previous record of 2020 (39.7 TWh). This was made possible by an increase in installed capacity and a good load factor resulting from favourable weather conditions. Solar power generation amounted to 21.6 TWh, compared to 18.5 TWh in 2022, the previous record, thanks to the development of installed capacity. These energies sources are becoming a permanent part of the electricity mix, accounting for almost 15% of the generation mix in 2023.

The increase in low-carbon production (nuclear, hydro, wind and solar) made it possible to limit the use of fossil fuels for electricity generation: fossil-fuel thermal production reached its lowest level since 2014 (32.6 TWh), a decrease mainly driven by the reduction in gas-fired generation, from 44.0 TWh in 2022 to 30.0 TWh in 2023. Indeed, gas-fired generation was particularly in demand in 2022 to compensate for the low nuclear and hydropower generation. Generation from coal-fired power plants accounted for just 0.8 TWh in 2023, corresponding to 1.7 thousandths of the total production volume (less than 0.17% of the mix) and is now insignificant in the French electricity mix.

In 2023, nuclear power generation rose to 320.4 TWh, an increase of 41.5 TWh compared to 2022, when the production volume reached an all-time low since 1988 (279.0 TWh), due in particular to the identification of stress corrosion cracking defects on certain reactors.

In 2023, nuclear generation remained by far the predominant source of electricity generation in France (65% of the mix); however, it remains at a low level, close to that of 1992⁴, and a fortiori below the levels of the period 2014–2019 (an average of 394.7 TWh), and even that of 2020, when production was strongly affected by lockdowns⁵ (335,4 TWh).

The significant improvement in nuclear power generation compared to last year reflects the higher availability of the fleet, particularly from the end of the spring and throughout the second half of the year. Indeed, the availability of the nuclear fleet in 2023 clearly improved compared to 2022, which was marked by inspections and repairs linked to the phenomenon of stress corrosion cracking, as well as to a lesser extent by the densification of stops due to decennial inspections and the disruption of maintenance schedules following the Covid pandemic. The average availability in 2023, all factors combined, amounted to 38.6 GW (63% of the fleet), compared to 33.2 GW in 2022 (54%). Availability improved especially during the last four months of the year, as winter approached, close to the minimums of the pre-Covid range⁶. Two episodes of marked decline nevertheless characterised this period: the first due to a combination of events, including the effects of Storm Ciarán⁷(around the turn of October and November) and the second at the end of December, linked to an optimisation of the fuel stock in a context of low demand and high renewable production. During the same period, the increase in availability compared to that observed in 2022 was marked: 41.4 GW on average over these four months in 2023 compared to 31.4 GW in 2022.

Although the risk to security of supply was lower in 2023 than in 2022, the nuclear fleet has not returned to nominal operation.

The nuclear fleet's production has indeed recorded a structural decline compared to the maximums reached in the early 2000s. The closure of the two Fessenheim reactors accounts for part of this reduction, but it is far from the majority of it: the drop in availability between 2000 and 2021–2022 represents the equivalent of the closure of fourteen 900 MW reactors.

The reduction in nuclear power generation is not due to the development of renewables: modulating the output of reactors is a technical skill for their operators, enabling them to optimise production according to market prices (i.e., producing less during periods of low prices to save fuel and maximising output during periods of higher prices). In fact, there are very few situations in which modulation is "forced" due to a lack of demand (in such cases, nuclear power is often not the only one to modulate, as the most recent renewable fleets are also phased out).

This downward trend in nuclear power generation is due to the scale of the industrial programme required to extend the operating life of the reactors and to take into account the feedback from Fukushima. The Covid pandemic, by disrupting maintenance schedules at a critical time in the ramp-up of the biggest projects, and then the identification at the end of 2021 of a generic stress corrosion cracking defect, have ended up constraining an already highly optimised schedule.

Over the next decade, the challenge is to return to higher levels of availability and production than in recent years, which is one of the essential levers for achieving industrial objectives and initiating the transition to a low-carbon economy. In drawing up the ten-year projections in the latest “Bilan prévisionnel” (Generation Adequacy Report), RTE assumed a rapid return to an average annual production volume of around 360 TWh, including the Flamanville EPR, and considered a level of around 400 TWh, as in the 2010 decade, as a higher scenario⁸.

With a total of 58.8 TWh in 2023, hydropower generation increased by 19% compared to 2022 (49.6 TWh), a year affected by very low rainfall, during which production had reached its minimum since 1976. The hydropower generation source thus retained the second place in the French electricity mix ( 12% of the electricity mix), remaining the main renewable source ahead of onshore wind power.

Hydropower generation in 2023 was nevertheless below the average over the period 2014–2019 (61.7 TWh). Indeed, it was particularly low during the months of February and March as a result of low rainfall during the winter of 2022-2023⁹ particularly in February, when a large proportion of annual production is usually concentrated. From October onwards, however, production volumes exceeded the highest levels observed during the period 2014–2019.

Water stocks reached very high levels compared with the previous year and the historical average from spring onwards, after a start to the year characterised by low rainfall, when they had remained close to average. These high stock levels were made possible by cautious management by operators at the start of the year due to low rainfall and by the improvement in rainfall from the spring onwards. The availability of good levels of hydropower stocks was a very favourable element for security of supply during the winter of 2023–2024.

Wind and solar power generation reached record levels in 2023: 50.8 TWh for wind power and 21.6 TWh for photovoltaic solar power. Together, these two sources surpassed hydropower generation for the second year in a row, while hydropower generation returned to usual levels in 2023: this shows that these variable renewable energies already occupy an important part of the French electricity mix, accounting for nearly 15% of total production, and also contributing to security of supply (see the Flexibilities section).