Minister says France won't have to break up EDF, GDF: report

Paris (Platts)--12Mar2007

France brokered a good energy deal at last week's European summit and as
a result it won't be forced to break up state companies Electricite de France
and Gaz de France, economy minister Thierry Breton said in an interview
published Monday.
"The President (Chirac) has won a very important deal," Breton told
French business daily Les Echos. "On the delicate question of the separation
of power and gas producers on the one hand and the grid managers and
distribution on the other, we have got what we wanted: there will be no
obligation that these different operators have distinct shareholders," Breton
said.
Europe had "accepted" that EDF and GDF could remain intact but with a
separate management of production and distribution businesses under "strict"
regulatory control, Breton said. "We will not be obliged therefore to
dismantle either EDF or GDF by separating their network operations."
Breton said also that France had reached an "essential compromise" with
Europe over nuclear power, which in his view had to be "revived" across Europe
to meet the new greenhouse gas emission targets. The summit agreed to cut
greenhouse gas emissions 20% by 2020 from their 1990 level and to increase the
percentage of renewable energy in Europe's total energy consumption to 20% by
the same date.
"But this is an engagement made by Europe as a whole not each state. This
is the key element of the deal," Breton said. "Countries like France that,
thanks to nuclear, emit relatively small levels of greenhouse gas will have a
competitive advantage by being a little ahead."
France still had to make an effort to boost its renewable energy output,
Breton said. France's renewable energy output (6%) is below the European
average (6.4%).
The country had the potential to boost its hydro power output, which
today represents 15% of total French power output, by the equivalent of an
extra nuclear power plant by 2010-2012 and "perhaps" by a second by 2015-2020,
Breton said.
"Biomass is also very promising, with the equivalent of a nuclear power
plant by 2010 and two by 2015," Breton said.
The potential to develop wind power was the same but resistance to wind
mills among local groups of people in France was "stronger and stronger,"
according to the minister. Solar also had potential but the technology needed
to be improved, he said.