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The continued development of resilient renewable energies in the face of Covid-19

The renewable energy sector has, on the whole, proved resilient following the Covid-19 crisis. This sector usually benefits from feed-in tariffs or secure long-term contracts.

Energies renouvelables
David Balussou

In 2020, electricity production capacity grew by 640 MW (+0.5%) compared with 2019. It reached 135.9 GW in 2020. The growth of production capacity was based mainly on the development of renewable energy (+3 GW), which largely offset the decline in thermal fossil fuel production (-0.6 GW).

A sector moderately impacted by the Covid-19 crisis

In 2019, electricity production stood at 538 TWh (2% below the level recorded in 2018). Renewable production in particular fell by 0.9% from its level in 2018, to 115.6 TWh. France's electricity trade balance stood at 55.7 TWh in 2019 (7.5% below its level in 2018); however, the country maintained its position as the leading exporter of electricity in Europe.

The French energy transition well underway in 2021

The recovery plan approved in 2020 will allocate €200m to the ecological transition and energy renovation of microbusinesses and SMEs starting in 2021. €105m will be dedicated to establishing a tax credit for investments in the renovation of buildings by microbusinesses and SMEs in the tertiary sector. €15m will be allocated to accelerating the ecological transition among 45,000 artisans, merchants, and independents. €35m will be devoted to providing lump-sum aid for actions and investments in the eco-design of products and services developed by SMEs. Finally, €45m will be used to carry out actions to support companies committed to the ecological transition. €7.2bn, including €2bn as part of the €100bn global recovery plan, will be dedicated to the green hydrogen sector by 2030, with three main objectives: boosting decarbonated hydrogen production capacity by electrolysis to 6.5 GW by 2030, developing mobilities, and building a job-creating industrial sector, with between 50,000 and 150,000 direct and indirect jobs being added in France. France will receive an exceptional financial grant of €1.5bn to implement a green hydrogen project of European common interest starting in 2021.

Renewable energy to see strong development in Europe over the medium term

According to the International Energy Agency, Europe’s renewable energy capacity should increase by 248 GW between 2019 and 2025, primarily driven by the development of wind and solar energy. Specifically, the installed solar capacity should grow by 134 GW, wind capacity by 95 GW, hydroelectricity by 11 GW and bioenergy by 7 GW. From 2020 to 2040, approximately $1487bn will be invested in the production of renewable energy in Europe.

The European green recovery plan: an accelerator for the energy transition

In the context of the future relocation of the economy, the Covid-19 crisis represents an opportunity to boost the energy transition and the development of renewable energies on a regional scale in Europe and in the medium term within the framework of green recovery plans. This acceleration is expected to be primarily driven by photovoltaic solar and wind power projects (onshore, and offshore subsequently) and by green hydrogen production projects.

In Brief

The French energy transition should continue its development in 2021 and beyond, driven by its wind and solar energy sectors as well as by the emergence of green hydrogen production projects.

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David Balussou, Senior Energy Advisor – Group Economic Studies

 

» Article from the ECO Tour 2021 publication. Click here to read it.

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