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Summary of our market study
The global electricity market has experienced structural growth in volume and value since 2020, driven by global demand for electricity, population growth, a dynamic construction sector and the development of emerging countries.
Electricity capacity, generation and consumption have all increased over this period, with power generation revenues reaching $1,614 billion in 2021.
The market is expected to reach $2,462 billion in 2026, with a compound annual growth rate (CAGR) of 8.8%.
The Asia-Pacific region holds l42% of the market, compared with 23% for Western Europe.
Dynamics of the French electricity market: Trends and outlook
The French electricity market is in a state of flux, driven by competitive forces, regulatory changes and evolving consumer preferences.
The opening up to competition in 2007 has enabled alternative suppliers to challenge incumbents like EDF, making the market more dynamic.
With demand continuing to grow, the French electricity market has maintained a stable volume with over 500 billion kilowatt-hours produced by 2021, consumption being slightly lower at around 450 billion kilowatt-hours.
The French electricity market has not only prospered in volume, but also in value, estimated at between 100 and 110 billion euros in 2021.
The residential sector is responsible for almost 40% of electricity consumption, mainly for heating, air conditioning and home electronics.
Cost remains a dominant factor influencing consumers' willingness to adopt energy-saving measures.
Businesses and professionals, including SMEs and the tertiary sector, account for a larger share of electricity demand than large-scale industry.
Certain industrial activities, such as metallurgy, the food industry and the chemical industry, are among the biggest consumers in their segment.
Despite market liberalization, incumbent suppliers retain a large market share, although the number of households supplied by alternative suppliers is increasing.
In terms of distribution and transmission, the networks are managed by monopolistic entities, with RTE handling transmission and Enedis distribution.
The transition to renewable energies continues to reshape the French electricity landscape.
French electricity market players
- EDF (Électricité de France) is a colossus of the French electricity market, holding a virtual monopoly before market deregulation. From generation to distribution, EDF remains a dominant force, operating a fleet of nuclear, hydroelectric and renewable energy plants, and continues to meet the needs of a large customer base with regulated tariffs.
- EDF subsidiaries RTE and Enedis manage the country's transmission and distribution networks respectively.
- Entreprises Locales de Distribution (ELD) Operating alongside giants like EDF, ELDs maintain a local presence, serving specific territories in France.
- Engie, one of the world's leading energy suppliers, has established itself on the French market as a producer and supplier of electricity. With a global presence, Engie has diversified its offerings in France to include a mix of nuclear, renewable and fossil energy sources. With its market offerings, Engie offers an alternative to the traditionally regulated tariffs.
- Total Direct Energie, the leading alternative supplier, is a challenger in the market, focusing on the residential and professional sectors with competitive market offers.
- Alpiq and Uniper These suppliers may not have the same historical roots or market power as EDF or Engie, but they are carving out a place for themselves by offering specialized services and market offers tailored to the needs of large and medium-sized consumers.
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Summary and extracts
1 Market overview
1.1 Definitions
Electricity is a form of energy that can be produced in a variety of ways, and is used to power electrical appliances and devices. The electricity market is organized around four main areas: generation, supply, transmission and distribution.
On July 1, 2007, the French electricity and natural gas markets were fully opened up to competition. This enabled new players to enter the market and compete with incumbent leaders such as EDF, which held a virtual monopoly on its own (some local public companies were nevertheless authorized to continue operating as Entreprises Locales de Distribution (ELD)).
To enable free competition, it was necessary to separate the activities. As EDF was involved from generation to supply of electricity, it was necessary to separate the different activities in order to open up certain parts to competition. From this, 4 activities emerged:
- generation: the power plants that produce electricity
- transmission : the transport of the electricity produced, high voltage
- distribution: the second part of transport, from low voltage to the distribution of this electricity to the various points of use
- sale or supply : the wholesale purchase of electricity, followed by resale at the various points of consumption
In France, electricity transmission still operates as a monopoly and is handled by RTE (Commission de Régulation de l'Energie), an EDF subsidiary. Electricity distribution is also close to a monopoly, as it is mainly handled by Enedis, another EDF subsidiary, but also by other local distribution companies.
Electricity generation and supply, on the other hand, are open to competition. Several companies are involved in both activities, including EDF, Direct Energie and Engie.
Sales in the French electricity market are on the rise, even though electricity consumption is stagnating. Electricity production reached 531 billion kilowatt-hours in 2021. This situation is mainly due to rising electricity prices. While opening up to competition was supposed to bring prices down, rising costs and limited access to raw materials have led to higher tariffs.
This rise in prices has been reinforced by the development of green energies and more efficient, environmentally-friendly offerings. Indeed, the energy transition has become the central issue for the sector, and represents a potential for future growth.
List of charts presented in this market study
- Global electricity capacity, production and consumption
- Global power generation market
- World electricity demand by region
- Top 10 largest utilities based on 2021 revenues
- French electricity generation by energy source
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Latest news
Engie New Ventures bets on Upstream Tech, a start-up specializing in water management - 16/12/2023
- Creation of ENGIE New Ventures (ENV): 2014
- Total amount invested by ENV: Over 250 million euros
- ENV investment areas from 2020: Biogas, hydrogen, renewable energies and decarbonization
- Upstream Tech creation date: 2016
- Upstream Tech headquarters: Massachusetts, USA
- Number of Upstream Tech employees: Around 30
- Power of ENGIE's hydroelectric fleet worldwide: 18 gigawatts, equivalent to 18 nuclear reactors.
Install 11,000 charging stations in France in two years - 18/06/2023
- Engie Vianeo electric mobility brand
- 12,000 electric charging points planned in France by 2025
- 1,000 charging points already deployed
- 800 fast and ultra-fast charging points on APRR, SANEF, Vinci Autoroutes and ESSO motorway networks (Certas Energy France)
- Presence in 35 Indigo parking lots in 20 cities, Eurométropole de Strasbourg, Communauté d'Agglomération d'Epinal, Métropole Aix-Marseille-Provence, B & B Hotels parking lots and Norauto sites
- 4,500 fast and ultra-fast charging points (less than 20 minutes charging time).
- electricity from renewable sources (hydro, wind and solar)
- French national target of 400,000 charging points by 2030
Solar panels: Enel builds a gigafactory to break away from China - 07/02/2023
- Investment of €600 million
- 15-fold increase in annual production capacity at its photovoltaic panel plant in Catania, Sicily
- The Italian plant will then overtake that of the Swiss Meyer Burger group in Freiberg, eastern Germany, with an annual capacity of 400 megawatts - eventually to be increased to 1 gigawatt
- Its subsidiary Enel Green Power has increased its worldwide renewable energy capacity to 59 gigawatts by 2022
Arkema signs major biomethane purchase agreement with Engie - 20/01/2023
- Purchase of 300 gigawatt-hours of energy per year over 10 years
- This contract, billed as one of the largest private biomethane contracts in Europe to date, is a major step forward for the energy giant
- This low-carbon gas comes from 17 methanization sites, notably on farms, across France, whose production the energy giant buys for resale
- France has 500 biogas plants connected to the gas distribution network
- This sector accounts for 2% of national gas consumption, and is growing fast
Energy, debt and Enel are the new Rome. - 23/11/2022
- The Group to sell part of its geographic expansion for 21 billion euros
Engie boosts its offshore wind portfolio by winning two projects in Scotland | Engie adds two new offshore wind projects to its portfolio by winning them in Scotland. - 23/08/2022
- Ocean Winds, the joint venture between Engie and its Portuguese partner EDPR, has won a tender to build and operate two Scottish offshore wind projects
- At a depth of 100 meters, they will require floating wind technology
- The larger project, which will generate 1.8 GW, will be sufficient to supply 2 million homes with electricity.
- The investment would be around 1.4 billion euros
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