Gas in France – challenges for future growth

By Catriona Scott 23 March 2017
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Dunkirk LNG. (EDF) Dunkirk LNG. (EDF)

The French energy market has faced significant challenges in recent months. Major nuclear outages, insufficient LNG imports and high demand have hit the country’s gas and power markets – and have even affected energy markets elsewhere in Europe. Low nuclear output pushed up France’s need for gas-fired power and forced it to import more electricity. Regional gas market shortages within the country led system operators to issue supply warnings while southern prices spiked. As system operators recover from these events, the country’s energy strategy could be set for changes. However, the upside for gas looks likely to remain limited.

The French gas market is one of the largest in Europe. Demand was roughly 43 billion cubic metres in 2016, up by 10% from 2015. The rise was driven largely by weather-related demand and the increased need for gas-fired generation during the latter part of the year as a result of nuclear outages. Although the power sector accounted for only 2-6% of French gas demand between 2010 and 2015, the increase in gas-fired generation last year was strong enough to boost the country’s overall demand for the fuel. The power sector’s gas consumption more than doubled on an annual basis in 2016, to account for 10% of France’s overall gas demand. Heating-related demand caused by cold weather helped to drive up gas use in the residential/commercial sector by roughly 6% on an annual basis. In contrast, industrial gas consumption was virtually flat last year.

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