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A Strategic Challenge for France
Respecting Commitments to the Fight Against Climate Change
The Grenelle de l’Environnement Forum accords priority to energy savings and to the development of renewable energies. Fossil fuels shall continue to be needed, although their share is set to diminish. Natural gas, the least polluting of the fossil fuels and the one with abundant reserves, has an important role to play. Its low CO2 emission rate (50% less than that of coal and 25% less than that of fuel oil) makes it an indispensible fossil fuel in the transition to the post-petrol period. In the future, combined cycle gas turbines (CCGTs), which have high efficiency, will provide the essential complement to base-load nuclear production and to intermittent renewable energies such as wind and solar power. They will gradually replace the highly polluting coal and fuel oil power stations which currently provide the balance between production and consumption.
Energy Security of Supply
Projections of national consumption have been reviewed following measures resulting from the Grenelle de l’Environnement Forum. They reveal a slight increase or even a stabilisation in gas consumption. That being the case, European production (in particular in the Netherlands and Norway), which currently meets 50% of our consumption needs, will certainly drop in coming years (40% in the next ten years). Therefore it will be necessary to find more remote, diversified sources of supply, impossible to transport by gas pipeline and thus requiring the use of LNG. Thus, the first challenge is the diversification of sources of supply, hence a goal of national energy safety. LNG terminals also boost our protection against the commercial and political risks of transportation through gas pipelines as demonstrated by the recent crisis in the supply of Russian gas through Ukraine to Europe.
Controlling the Cost of Energy Supplies
In the new context of competition between gas suppliers, the LNG chain also offers benefits in terms of controlling supply costs. In effect, having regasification capacity allows for an increase in LNG imports when its price is more competitive than traditional supplies through gas pipelines.
Today, the load factor of LNG terminals in France is, at around 80%, among the highest in the world, thus leaving narrow margins of flexibility. Furthermore, long-term capacity reservations are saturated including at the new Fos Cavaou terminal.
