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France’s energy bill to exceed €100 billion this year

France’s fossil fuel import bill is expected double from 2021, reaching €100 billion as energy bills skyrocket across Europe, the French Nuclear Energy Society (SFEN) told a Parliamentary hearing on Wednesday.

The French Treasury revealed in April that the French energy bill had reached a record high, rising from €27 billion in the second half of 2021 to €48 billion in the first half of 2022. In light of current price data, “we will end the year with an energy bill of over €100 billion,” SFEN Director General Valérie Faudon told the hearing Committee.

The bill was at €44.3 billion in 2021, over double the €19.1 billion in 2020, according to the latest figures from the ecological transition ministry.

The rise in costs can be explained by the difference between energy supply and demand following the COVID-19 crisis, which has led to rising fossil fuel prices and import volumes.

More specifically, import bills for oil, refined products, and biofuels have risen sharply. The bill for natural gas has almost tripled, from €5.2 billion in 2020 to €13.3 billion in 2021.

At the same time, coal imports increased only slightly, while a positive electricity export balance reduced the bill by €2.6 billion, compared to €1.2 billion in 2020.

France’s saving grace: nuclear energy

The situation is similar, if not worse, in other European countries. Germany’s energy mix is 78% fossil fuel, compared to France’s 46%. France is also less dependent on Russian gas than its European partners, accounting for only 20% of its energy imports, compared to 38% in the EU.

According to a restrictive approach based on the cross-sectional data acquired, the German bill is likely to exceed 120 billion euros by the end of this year.

That said, French and EU dependency on Russian gas has been steadily increasing over the past three years, with a 13% and 20% rise in 2019, respectively.

However, France can count on nuclear energy more than many of its neighbours. It remains affordable enough not to become a strategic concern and represents less than €1 billion for the year, Faudon explained.

According to the ecological transition ministry, nuclear energy accounted for 40% of all primary electricity consumption.

“We can see the effects of a good energy mix compared to a dependence on fossil fuels,” Faudon noted.

In spite of nuclear, France is a net importer of electricity

In 2022 however, France will remain a net electricity importer. The low availability of nuclear energy due to delayed maintenance on nuclear plants and the limited hydro-produced electricity due to summer droughts have pushed electricity costs extensively – alongside a hike in imported fossil fuels prices and volumes.

According to the French national statistics body INSEE, the €100 billion bill should represent between 4% and 4.5% of France’s 2022 gross domestic product.

This situation has consequently led to a sharp deterioration in the French trade balance, from a €51 billion deficit in the second half of 2021 to a €71 billion deficit for the second part of 2022.