The geothermal market - France

The global geothermal market has been on an upward trajectory, with forecasts predicting a significant rise in production capacity from 92 TWh to 282 TWh by 2030. The United States remains the leading producer with 18.8 TWh of geothermal energy in 2018, followed closely by Indonesia and the Philippines. In France, geothermal energy is a market with high potential yet remains largely underutilized. The Bouillante power plant in Guadeloupe is a notable producer, contributing 110 GWh, which is 6% of the island's energy production. The Soultz-sous-Forêts project in Alsace has a production capacity of 1.7 MW (12 GWh per year), and further potential exists in other regions such as the Massif Central and Languedoc-Roussillon. Despite a modest rise in recent years, geothermal energy's share in France’s heat and electricity production remains below 5% and 4%, respectively, with a production potential of over 3,000 MW for geothermal electricity.

Additionally, the French market demonstrates an increase of 7% in the geothermal heat pump market in 2022, suggesting a potential boost in the upcoming years amidst rising electricity and hydrocarbon prices. The regulatory framework is evolving, and with the government's 2023 action plan, there is strong support for geothermal developments, including increased financial incentives for geothermal installations, targeting a 40% increase in deep geothermal projects by 2030 and doubling the number of geothermal heat pump installations by 2025. However, the COVID-19 pandemic led to a temporary decline in the sector's sales due to the economic slowdown and reduced electricity consumption in the industrial and tertiary sectors.

Geothermal Energy in France: A Landscape of Untapped Potential and Growing Interest

The French geothermal market is characterized by significant yet underexploited potential. Despite this, there is a noticeable upward trend in both supply and demand. France's geothermal market is ripe with opportunity, converging around a few specialized companies and generating approximately between 10,000 and 20,000 jobs in the field. Geothermal energy makes up for less than 4% of France’s heat production but holds the keys to a significant portion of the country's electricity potential, estimated to be over 3,000 MW, which could cover around 90% of the nation. The residential sector, once booming in the 1970s, faced a sharp decline but has seen a resurgence in recent years, reflected by a 7% increase in the geothermal heat pump market between 2021 and 2022.

In terms of demand, geothermal installations provide heating, hot water, and cooling for over 1.2 million French residents, which is equivalent to around 1.8% of the total population. When it comes to household consumption, heating dominates electricity expenditure, making up over 60% of total electricity costs in 2022, down from previous years. Nevertheless, around 11.9% of households considered switching electricity providers, prioritizing factors such as price and service quality.

The heat pump market acts as a major driver for geothermal energy demand, exhibiting strong growth with a 30% increase in air-to-water heat pump sales and a 7% climb for geothermal heat pumps between 2021 and 2022. Indeed, the significance of the heat pump sector is underscored by its position in France’s renewable energy contribution, which stood at 12% in 2021 and is expected to shoot up to 34% by 2035, and nearly half by 2050.

When it comes to the supply side, two categories of geothermal energy are prominent: shallow geothermal on one hand and deep geothermal on the other, with the latter comprising both hydrothermal systems and advanced systems tapping into higher temperatures of between 200°C to 600°C. The installation costs naturally vary with the complexity of technology, and for a typical shallow geothermal installation, one might expect to spend approximately 19,600 euros. Regulation-wise, the French market is governed by an array of intricate laws, but the conditions are relatively supportive compared to other European countries.

Prominent Participants in the French Geothermal Energy Market Landscape

As France navigates its energy transition, the geothermal market exhibits a dynamic interplay of established and emerging participants, each contributing uniquely to the sector’s development.

Among the historical suppliers, Électricité de France (EDF) is a name synonymous with energy in France, with a legacy spanning decades and a dominant presence in the electricity production landscape.

Local distribution companies (ELDs) serve as regional entities within the market, catering to specific local energy needs and playing significant roles in their respective territories. While these companies may not boast international name recognition, their importance at the community level is considerable.

On the other side of the spectrum are alternative suppliers such as Engie and TotalEnergies, companies that have diversified into the renewable energy space, including geothermal, and are challenging the status quo with competitive offers and innovative technologies. Their agile approaches allow them to capture niche markets and add a robust competitive edge to the sector.

The Transmission System Operator (TSO), Réseau de Transport d'Électricité (RTE), ensures that electricity produced, including from geothermal sources, flows efficiently and reliably across the high-voltage transmission network. As a subsidiary of EDF, RTE plays a crucial part in balancing the national grid and facilitating the integration of renewable energies.

Functioning at the grassroots level is Enedis, the Distribution System Operator (DSO) that oversees the delivery of electricity to end-users through an extensive network of lines and substations. Their role is instrumental in ensuring that geothermal power, along with electricity from other sources, reaches homes and businesses across France.

Local distribution companies in various regions complement the efforts by managing more localized distribution networks tailored to the needs of their specific localities. These entities ensure that electricity, regardless of its source, remains accessible to even the most remote customers.

As France propels forward with ambitious targets for renewable energy, notably geothermal energy, these key players form the backbone of the country's energy market. Their collaborative and individual efforts underpin the overall success of France's sustained commitment to cleaner, sustainable, and more self-sufficient energy solutions.

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 27/04/2023

Summary and extracts

List of charts

• Geothermal energy production in the sustainable development scenario
• Main countries producing geothermal electricity
• Sales by renewable heat sector
• Primary production of geothermal energy
• Renewable energy consumption by sector
• Market shares of electricity supply types by consumption volume
• Breakdown of household consumption in the home
• What would be the main reason for you to change electricity supplier?
• Share of heat pumps in residential renewable energy consumption
• Heat pump trade balance
• Number of pumps sold by type of heat pump
• Number of geothermal heat pumps (2 to 50 kW) delivered for domestic use
• Breakdown of geothermal power plant development costs
• Average geothermal LCOE
• Prices of main energy sources
• Monthly index of revenues from electricity generation, transmission and distribution