French Energy Minister to Pursue Green Push Despite Budget Woes

(Bloomberg) - France's new energy, environment and climate minister Agnes Pannier-Runacher pledged to pursue the transition away from fossil fuels, even as the government grapples with a growing budget deficit.

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The four pillars of the nation's transition strategy remain energy efficiency and savings, nuclear power and renewables, and will be implemented by junior energy minister Olga Givernet. Supporting the adoption of cleaner cars and facilitating home renovations are key to reducing both pollution and energy bills, Pannier-Runacher said in a speech in Paris on Monday, as she took over from her predecessor.

The new French government must curb a ballooning budget deficit, while driving an increasingly costly transition away from fossil fuels. Billions of euros of state subsidies will be required to help fund everything from nuclear power stations and offshore wind farms to synthetic fuel plants and initiatives to cut industrial emissions.

Pannier-Runacher, who was the minister in charge of the energy transition from mid-2022 until last January, has pushed laws to cut red tape in the planning and permitting of wind, solar and nuclear projects. However, the outgoing government fell short of publishing the decrees needed to enshrine the country's new 10-year energy roadmap and its long-term National Low Carbon Strategy.

Snap legislative elections have produced a hung Parliament, leaving Pannier-Runacher to navigate between large ranks of anti-nuclear and anti-renewable lawmakers at either end of the political spectrum.

That's raised alarm bells among renewable energy lobbies, which are urging the new prime minister to take measures to underpin green investment in transport, manufacturing, energy storage, power grids and renewables.

Pannier-Runacher said she will meet lawmakers and local representatives from all sides to establish the main lines of the country's energy and climate strategy, and its adaptation plan to global warming. She also pledged to keep pushing for nuclear power among willing members of the European Union, as France prepares "its biggest industrial program in half a century."

In July, Electricite de France SA Chief Executive Officer Luc Remont urged the government to complete talks with the state-owned utility over the financing of six new atomic reactors before the end of the year. That would allow a final investment decision for the estimated at €67.4 billion of projects toward the end of 2025.

The French atomic industry, which has launched a plan to hire 100,000 employees over 10 years, is also seeking confirmation that it will get government backing for more investment in nuclear-fuel facilities. And about a dozen startups working on small innovative reactors are waiting for President Emmanuel Macron to pick the recipients of state subsidies.

Large-scale projects to produce clean hydrogen and synthetic fuels to decarbonize everything from steelmaking and refining to maritime transport also await a clear regulatory framework, France Hydrogene said in July. The construction of electrolyzers to produce hydrogen without emitting carbon dioxide also requires the confirmation of government financial support, the business lobby said.

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