Tax credits and low-interest loans will be used to generate about €10 billion ($13.4 billion) for a new energy plan in France. About half the money will be loaned by Caisse des Depots et Consignations, a government-owned lender, and some will also come from non-state banks.
French President Francois Hollande wants France to reduce its reliance on atomic power from 75% to 50% by 2025. Such an investment is necessary to help with this transition. France is one of the most nuclear-dependent countries in the world. This situation is surely reasonable, because at one point several decades ago, France was overly reliant upon oil for the generation of electricity. When the oil crisis of the early 1970s hit, spiking petroleum prices put France (and other nations) in a financial headlock. Unlike many other countries, France doesn’t have large supplies of coal so couldn’t fall back on that energy source. Thus, it pursued nuclear power.
Demonstrating a note of optimism about the new energy plan, Environment Minister Segolene Royal, said, “What is important is to use our imagination. What we have done is financial engineering.”
While some say such government programs are typically not very effective, this one seeks to save energy through home renovation and insulation. Such practical measures aren’t as ‘sexy’ as a new solar power plant, but they can be beneficial. The installation of 7 million electric vehicle charging stations will also occur as a result of the program and electric car purchasing will be encouraged.
The public will also be incentivized to turn in old, diesel-powered vehicles in a bid that is reminiscent of the Cash for Clunkers effort that was made a number of years ago in the United States. The energy financing will also be used to create new jobs.
Another reason to invest in alternative energy is that many of France’s nuclear power plants are getting old. “We have a nuclear fleet which was built in the 1960s, 70s, 80s. So we arrive at a time when these plants get close to 30 years of age. The ageing of these facilities is a new factor, even if a foreseeable one. Can we go over 40 years? We have no answer on that yet. We are expecting a full report from EDF which will bring us to take a decision in 2015,” explained President of the French Nuclear Safety Authority, Pierre-Franck Chevet.