Macron VS Le Pen : what to expect for the French GO Market?
Green Power Analyst
Climate change enthusiast and former OECD Economics Consultant on Renewables within the IPAC. Holds a Master in Economics and Public Policy from Sciences Po Paris.
Climate and Environment matters haven't been at the center of this campaign but we clearly see two different visions of what to do to tackle climate change.
Emmanuel Macron and Marine Le Pen share almost pure opposite views on environmental and climate related matters, both in their political programs and speeches.
Last Saturday, during one of his very few meetings in this campaign he joined quite late, Emmanuel Macron attacked Marine Le Pen on her environmental program and called her and the far-right "climate skeptic". Facts don't lie, and it is a fact that Marine Le Pen's program states:
"For wind power, we will start the progressive dismantling of sites, starting with those that are end of life. All subsidies to promote these processes will be suspended, and the energy produced will be bought at market price." (1)
Their broad vision on what to do
Despite the pessimist trend that is constant in France when it comes to meeting long-term objectives on tackling climate change, RTE (Réseau de Transport d'Électricité), the electricity transmission system operator in France, published in October 2021 a controversial report (in French) on the different scenarios that could make France reach carbon neutrality by 2050. One of the scenarios plan on a 100% of the electricity coming from renewable sources. Others do include the development of new nuclear plants, a topic of high controversy in France as in many other countries.
Nonetheless, the nuclear subject seems to be the only one on which Macron and Le Pen share approximately the same view. Macron wants to build at least six new reactors (EPR, European Pressurized Reactors) - the first one of the the six being installed by 2035 -, while conducting studies for a further eight to be built. This is on top of "extending the lifespan of currently operating reactors by 50 years" (2). Marine Le Pen intends on reopening Fessenheim nuclear plant, as well as constructing five new EPR pairs to be delivered starting from 2031.
Subsidies to renewable energies
On this point, the Institute for Climate Economics (I4CE), a French think-tank specialized on climate matters assessed every candidate's program on climate and pointed out that on the subsidies ending part, Marine Le Pen "does not specify how she intends to renegotiate existing contracts with project developers"(3), which is of high importance.
As a reminder, the Ministry for Ecological Transition calculated that public subsidies in France in 2019 accounted for 5 704 million EUR, 53% going to solar ("photovoltaic"), 28% to wind ("éolien").
Emmanuel Macron wants to increase the allocated budget to the ecological transition by 10 billion EUR every year, but most of it would go to the transport sector (5.4 billion). Nonetheless, he "does not provide information on the financing of renewable energy investments, in particular on the amount paid by consumers via the contribution to the public electricity service (CSPE)", wrote the I4CE.
Impact on the GO Market
In 2021, more than 77 million GOs were issued in France (see our French GO Market Analysis), 24% of it being from Wind energy.
At the moment we're writing this article, last polls are giving Macron 56% and 44% for Le Pen.
Should Emmanuel Macron win on Sunday, there will be, without a doubt, a continuum in the climate transition policies that were implemented both at the EU and national level. Therefore, we expect that the share of renewables in the French energy mix will increase, as well as its production volumes.
Also, as Macron intends on meeting France objectives in terms of carbon neutrality, new legislation to reinforce renewables' share will have to be passed, experts and market players said. Overall, we expect the Offshore Wind and Solar PV production levels to substantially increase, so will the GOs issued, in line with the current trend. Since demand will also increase, prices' movements are quite uncertain. What is for sure is that a Macron win will not sign the end of GOs, on the contrary.
As for Marine Le Pen, she wants France to get rid of all wind turbines. One of her spokespersons recently confirmed to National Geographic:
"They are intermittent energies, which are falsely renewable. They are polluting, they are linked to coal-fired and gas-fired power stations. Proposing more wind turbines means more pollution." (4)
This would gradually lead to the extinction of electricity produced through wind, and less and less GOs issued through Wind. Thus, what to expect for GO prices ? In her program as well in speeches, Marine Le Pen didn't give much information about the GO scheme itself, so we assume she will not end it. But since there will be no more Wind GOs issued, we can expect, all things being equal on the regulatory side, the Hydro and Solar GO prices to substantially increase, should Marine Le Pen find a majority at the Parliament in June to be able to pass her laws.
(1) Marine Le Pen's proposals on energy transition and climate can be found here (in French).
(2) Emmanuel Macron's proposals on energy transition can be found here (p. 8, in French).
(3) I4CE assessment of Marine Le Pen energy program can be found here (in French).
(4) National Geographic article on ecology and French presidency can be found here (in French).