Russias war has exposed France and Germanys energy policy differences. Can it also bring them together? – Energy Post

France and Germany combined account for 45% of EU GDP and 40% of energy consumption. No wonder they are the most influential EU members. But the Russia-induced energy crisis has forced both Paris and Berlin to expose and admit the differences in their national energy strategies, and that has made a search for a unified voice for Europes ambitious climate targets much harder to achieve, explain Camille Lafrance and Benjamin Wehrmann at CLEW. Though the destination is clear decarbonisation and energy security the pathway is not. So the current energy crisis and the disputes it has created should be taken as an opportunity to grapple with and resolve the big issues now. The authors take a thorough look at the differences between France and Germany, interviewing experts on the way, and cover key issues such as nuclear, renewables, fossil fuels, hydrogen, cooperation and coordination, power interconnections, reforming the EU power market, jobs, increased competition from the U.S., and more. And the authors note that a basic EU principle that energy policy exclusively rests within the competence of national governments may be out of date, and should make way for EU-level solutions.

When Emmanuel Macron makes the first official state visit of a French president to Germany in almost 25 years (originally scheduled for 3 July but now postponed), a long list of unsorted energy and climate challenges casts a shadow that reaches back to the European Unions origins as a project based ona common line on energy policy and industrial stabilityafter the Second World War. Sixty years after signing their seminal Elyse Treaty, which formally ended decades of rivalry and opened an unparalleled political partnership between the neighbours, France and Germany find themselves at the forefront of a dual crisis that affects these core tenets of the EU: safeguarding energy supply after Russias invasion of Ukraine while also getting ahead with the unremittingly urgent task of decarbonising its economy – which is supposed to have reached net-zero by 2050, about the time the next state visit is due at the current rhythm.

France + Germany: 45% of EU GDP, 40% of energy consumption

Macron has been visiting Germany on numerous working visits during his tenure and meets with German chancellor Olaf Scholz regularly to talk politics between the blocs two most populous countries, who together account for roughly 45 percent of its GDP and nearly 40 percent of energy consumption.

The official state visit one year ahead of the 2024 European elections is meant to send a message that the Franco-German engine of European integration that is based on conflict resolution and sharing competences is still intact – after a calamitous year dominated by Russias war but also by glaring gaps in the two core member states energy strategies. The French presidents visit also includes a meeting with young people from France, Germany and Ukraine who work on sustainability concepts, a nod the future challenges lying ahead and which both countries want to approach by looking out at the world together, as Germanys presidential office put it.

A lack of common vision between Paris in the preceding months has come with serious implications for the EUs climate ambitions. At the height of Europes energy crisis, the engine showed clear signs of malfunction, as Paris and Berlin allowed themselves toengage in a noisy quarreloveruse for nuclear power, therole of gasin the energy transition or thefuture of combustion engines.

All these differences point at crucial decisions the EU has to take with respect to the funding of its energy plans, supply security aspects as well as wider trade and industrial policy frameworks. The dispute thus exposed deeper risks in the blocs coherence regarding the aim to achieve climate neutrality, said Sven Rsner, head of the Franco-German Office for the Energy Transition. Theres a risk that the gulf on these mattersweakens the pairs ability to actas the progressive force in European climate actionthat it has been in the past, the head of the bilateral government platform for energy policy coordination said.

National control of energy policy no longer offers viable solutions

Encouragingly, the crisis also showed European solidarity to work in practice: French help was instrumental ingetting Germany out of its self-dug Russian gas trap. And electricity imports from Germancoal plants and renewables helped to keep the lights on in Francewhen half of its nuclear reactor fleet was taken offline for maintenance or due to a lack of cooling water that also cuthydropoweroutput. Unfortunately, this encouraging sign has been buried by disagreements, often centred around national energy sovereignty, Rsner said.

Indeed, a basic principle for the EU so far has been that energy policy exclusively rests within thecompetence of national governments. Asked about the effects of the spat on climate policy progress during the crisis, the EU Commission made clear it will not comment on the bilateral relationship between two of our member states. But applying national perspectives no longer offers a viable solution, French-German policy mediator Rsner said. Sovereignty today is only achievable at the European level and there will be no sovereignty without solidarity.

This conclusion resonates with many French and German citizens: in a bi-nationalsurveyby the German Heinrich-Bll-Foundation and the French Ecologic Policy Foundation released in early 2023, more than 80 percent of respondents in both countries said a functioning Franco-German engine remains essential. And cooperation on energy overwhelmingly was named the most important job for the two governments, followed by security policy, trade and climate action.

Yet, as of mid-2023, energy cooperation appears to be a far cry from these popular wishes, as Francetook the lead in a nuclear allianceof countries aiming to ingrain non-renewable nuclear energy in the blocs renewable energy plans, an outcome Germany vehemently opposed. Adeal on intermediate renewable power goalsthat included nuclear power provisions allowed EU states to move on also this time. The irritation it left became visible when Paris was temporarilyshunned by a Friends of Renewables groupmeeting ahead of the EU energy council where it was agreed.

While France eventually did join the pro-renewables meeting, the way it projected its interests into EU policies was emblematic of a certain bluntness it shared with Berlin throughout the energy crisis that did little to solidify European cohesion, said Kenny Kremer, who oversees Franco-German relations at the German Council on Foreign Relations (DGAP). Last-minute interventions based on national interests have been perceived as egoistic and self-centred by many other EU states, Kremer argued.

As France snubbed at others with its insistence on nuclear energy, Germanys national solo effort became visible in itsscarcely coordinated200 billion-euro energy crisis response. More broadly, Germanys position on energy often came across as particularly selfish, with Berlin claiming the moral high ground on environmental policies while burning a lot of coal andrefusing to let go of combustion engines, Kremer said.

Germany and France together account for about 40 percent of the EU’s energy consumption. / SOURCE: Eurostat

Finger-pointing misses the point: agreeing on Europes future energy system

The fact that France in 2022 had a higher share of renewables in its energy consumption than Germanyfits this narrative. However, a closer inspection reveals thatwindandsolarpower, widely agreed to be the workhorses for decarbonising the global power supply, are developed much faster in Germany than in France, whose renewable energy credentials rests on a sizeable capacity ofbioenergyandhydropowerthat cannot easily be expanded further. And while France incidentally boasts the largest land area and abundant production potential for solar and wind power, itwas the only country in the EUto miss its 2020 renewables target, only catching up withtwo years of delay.

However, pointing fingers and measuring annual expansion levels or current shares in the energy mix misses the point of coming to a deeper agreement about the path France and Germany want to see Europe take towards its goal of achieving climate neutrality and also greaterenergy sovereignty, as both Macron and Scholz repeatedly vowed. The common objectives outlined in the European Green Deal compel all member states to improve coordination and France and Germany are positioned to spearhead this effort by showing that seemingly irreconcilable approaches can be brought into alignment. The EU policy think tank Jacques Delors Centre Berlin, for example, cites theneed to step up coordinationonavoiding excess fossil infrastructureinvestments in theREPowerEUcrisis response,reforming the EU power marketandpush interconnectionsas key steps for the Green Deal to succeed.

Crucially, the think tank also cited the need for greater joint efforts to make Europe a production location for clean technology a task that Germaneconomy minister Robert Habeck and his French colleague Bruno LeMaire addressed in aFranco-German responseto the industrial policy challenge posed by the green subsidy programme Inflation Reduction Act (IRA) in the U.S.widely hailed successful.

The coordinated reaction to the IRA was preceded by ajoint declarationin which both ministers acknowledged that their countries have a key role to play in this unprecedented context to break up Europes spiral of high energy prices, rising inflation and falling competitiveness. The declaration marked the first step of a new Franco-German commitment line, they promised. However, it was only achieved aftera vexed debateabout a new hydrogen-ready gas pipeline connection from Spain to northern Europe, which France deemed unnecessary because it plans to use its own LNG import infrastructure and wants toproduce hydrogen with nuclear power. While climate neutrality gives the Franco-German engine a destination where to take the EU, it appears there are two steering wheels installed that complicate this task.

EU-wide growth of renewables drives growing interconnection

National reservations dominate headlines about Franco-German energy relations despite the fact that there is wideagreement among them on the vast majority of tasksahead and despite the fact that the concept of national electricity systems is gradually fading in Europe, as more and more electrons cross borders. Since the liberalisation of power markets in the 1990s, interconnections between national energy markets have intensified greatly across Europe and today put Germany and France at the centre of the worlds largest integrated electricity system, the Continental European Synchronous Area (CESA), in which the pair also boast thelargest generation capacities.

We need each other, said Ines Bouacida, energy researcher at the French think tank Institute for Sustainable Development and International Relations (IDDRI). To balance the networks, to ensure security of supply, we are interconnected with our neighbours, she explained.The fast-growing share of renewable energy sourcesprojected by the EUwill only increase this mutual reliance, driven by shifting weather conditions in Europe that let national power generation fluctuate. But it also generally provides that high outputs are generated somewhere in the region. Interconnections ensure that everyone gets the electricity they need, she stressed, even though the current level of integration is far from optimisingfast intercontinental transfersoravoid curtailmentbecause local grids have nowhere to redirect excess power.

France and Germany sit at the heart of continental Europe’s interconnected grid, the world’s largest integrated power system. / SOURCE: Entso-E

Improving the joint exploitation of electricity sources across Europe wouldunequivocally benefit France, Macron said in late 2022. Increasing the number of interconnectors would also lead to a more equal and lower price level for power between both states, Germanys economy ministryunderlinedafter the winter 2022/2023. The more connections are available, the better supply and demand can be balanced across the border and bridge relative generation costs – including those for fossil-based power generation and CO2 emissions allowances. Conversely, underdeveloped coordination means EU countries compete for foreign supplies, rather than maximising domestic ones.

Todays differences stem from the response to the 1970s energy crisis

Upholding the conundrum exposed by the current crisis would not be the first time that a shock to the energy architecture leads France and Germany astray from their shared wisdom that cooperation tops national supremacy. Todays differences in energy architecture on both sides of the Rhine river that forms the border between the two countries in fact aresteeped in diverging responsesto another energy crisis, the oil price shock of the 1970s.

Nuclear energy initially had been a core tenet of European integration and both countries banked equally on the technology in the post-war economic miracle decades. However, faced with the oil crisis, Germany embraced its domestic coal riches and relied on its bigger spending power to outbid other European buyers on oil markets much to the chagrin of France, whichlacked a substantial coal industryand had pleaded for joint oil price controls. As a result, Paris went out on a reactor-building spree, theMessmer Plan, which saw the fleetincrease considerablythroughout the 1980s.

With its national nuclear arms program already fully developed at the time, France therefore sought to extend use from the military to the civilian realm. At the same time in Germany, which lacked nuclear arms, anti-nuclear protests (that also helped birth the countrysGreen Party) pushed society further away from the technology and a few industrious citizen cooperatives embarked on first renewable power projects. The Germans tend to believe that there is no separation between the civilian and military sectors, and this is what scares them, said energy historian Alain Beltran from the Sorbonne University in Paris. By contrast, in France, there is no immediate link between civil and military realm. This is a fundamental difference.

Nuclear plant Civaux in western France: unwavering support of the technology marks a fundamental difference to Germany that started in the 1970s. / PHOTO: EU/Laurent Chamussy

Unfettered by the Chernobyl disaster, nuclear power firmly established itself as the mainstay of the French electricity system which fittedits desire for relative control over supply and chimed with intensifying concernsabout fossil fuel emissions in the 1990s. “France has had an energy policy based on greater independence, with an electro-nuclear policy as a major axis, Beltran said. Germany, on the other hand, went on to push for a full exit from nuclear power and started to phase-in renewables in earnest, while at the same time betting on concepts like clean coal plants or gas as bridge technology towardsdecarbonisationwhich it could freely buy on the market or through preferential agreements as with Russia, which German reunification helped greatly reinforce.

France and Germany share most energy challenges despite decades of diverging strategies

Fast-forward to 2022, excluding greater sovereignty from its energy strategy turned out to be a major miscalculation by Germany. Scholzs Zeitenwende policy which included the 200-billion euro shield in response to Russias war kicked offa turbulent periodin which the country paid dearly for its previous reliance on cheap Russian gas. Simultaneously, it saw years of warnings from its EU partners,particularly in the east, overthe hapless Nord Stream 2 pipelinecome true in what had been widely received as a massive geopolitical own-goal.

Despite its nuclear backbone and accent on sovereignty lowering exposure to Russia, France too faced massive repercussions in the crisis. France spent45 billion euros on support programmesand ended upfully nationalising its key energy companyand reactor operator, EDF, for nearly 10 billion euros. And while nuclear dominates the national electricity mix, only about a quarter of the total energy consumption in both countries is covered electrically. France imports most of its energy in the form of fossil fuels to run cars, fire up industry sites or heat homes and in 2022 even became theworlds largest importerof liquefied natural gas (LNG) from the U.S., some of which subsequently was sent on to Germany.

Faced with strikingly similar challenges despite decades of different decisions and far-right parties lurking in either country tocapitalise on fears of high energy pricesanddifficult emissions reduction policies solutions from either side of the Rhine so far have failed to provide a convincing picture of Europes energy and climate strategy moving forward. In both cases, the dominant sources of energy created economic and social linkages that are difficult to disentangle, which Germany has found in its heated but ultimately successful negotiations for acoal phase-outin 2038 – a date that economic realitiesmight ultimately ring in faster.Frances nuclear renaissance and German plans toincrease its capacity for gas-fired power production(built with the later use of green hydrogen in mind, although this aim is still beset withunresolved technical and logistical difficulties) both remain concepts anchored in national path dependencies.

Outliers: Germany leads in EU greenhouse gas emissions – France dominates on nuclear power. / SOURCE: Our World in Data

The debate on the way electricity is produced in our country is taking over the public space as soon as we talk about energy, said Phuc-Vinh Nguyen,energy researcher at the Paris-based branch of think tank Jacques Delors Institute. This leads to a focus that is on either renewable energies or nuclear power, and not really on how we want to move away from fossil fuels, he adds, advocating for more speed and cooperation in areas beyond electricity. This isparticularly true for transport, which is the biggest emitter in France and in Germany has not reduced its carbon footprint in a meaningful way since 1990. We will need proactive policies in the very short term.

Multitude of current Franco-German initiatives needs solid strategic footing

In acknowledgement of the need to break free from trodden paths, French president Macron reached out to Germany on multiple occasions since taking over office in 2017,appealing to a Franco-German momentumthat should put Europe ahead in the global race for clean technologies in transport, housing, industry or agriculture. But the proposals,including an EU carbon border tax(CBAM) and an internal carbon price and targeted efforts to ramp up harmonised infrastructure, did not bear fruit under Scholz predecessor, Angela Merkel. This was not least due to the German industrysreservations about effects on competitiveness, which persisted even when key parts of the proposals wereadopted some six years later.

Yet, also the French appetite for a momentum at times appears to have ebbed in the interim. Its approach tosecure EU funding for reactor constructionby all means nagged on the ability to make incremental progress on the energy policy fields with shared competences that are left for EU-wide approaches, mostly renewable power and efficiency. Despite it forging an alliance with other states interested in reviewing nuclear power options, France remains an outlier in that itoperates the largest fleet by faranddominates Europes capacity for reactor construction. Such vested interests in one technology may well hamper a common line on expanding renewables.

Truly zooming out from the national perspective and moving on to adopt a European one could change the calculus both in Paris and Berlin, said Murielle Gagnebin, France expert for theAgora Energiewendethink tank in Berlin. The cooperation between France and Germany on both energy and climate leaves a lot to be desired still, she said, despite a multitude of already existing initiatives aimed at pushing joint activities across the Rhine river. These should be upgraded to make sure that the spat triggered during the 2022 energy crisis marks the starting point of a more earnest approach to energy integration, Gagnebin said. Platforms such as theFranco-German Meseberg Climate Working Group could help to purposefully close the gap in concepts for Europes energy future, which grow bigger with each national advance. Its important to ensure that the continuity of these efforts does not depend on individual commitments or affected by short-term developments, such as changes in government.

Irrespective of the future course of nuclear power in France and Europe, agreeing on common investment and infrastructure priorities, state support rules,sourcing of raw materialsand on what generally constitutes a green economy will be the decisive field of Franco-German energy cooperation at the EU level, all experts agree. Irrespective of the route the Franco-German engine ultimately takes, the question of what it is powered with should no longer cause a stir once another French president takes a trip to Berlin in some 25 years.

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Camille Lafrance is a freelance journalist covering climate policy, agriculture and adaptation

Benjamin Wehrmannis a staff Correspondent forClean Energy Wire (CLEW)

Thisarticleis published under aCreative Commons Attribution 4.0 International Licence (CC BY 4.0)