The Future of Hydroelectricity in France: What does the New Energy Transition Law Mean for the Long-Delayed Renewal of Concessions?

16 November 2015
By Jeanne Lubek and Stéphane Wakeford

Hydroelectricity plants account for 19.7% of installed capacity in France, a percentage that is second only to nuclear power. But the share of hydroelectricity doesn’t fully capture its importance in the French electricity mix—as a flexible and cheap energy storage mechanism, hydroelectricity is critical in balancing a grid that incorporates more and more intermittent renewable energies.

Despite hydro’s growing importance and government objectives to increase peak hydro capacity, installed capacity has levelled off due to a conjunction of economic factors, mostly as a result of the uncertainty regarding the renewal of hydroelectricity concessions. Of the 400 hydroelectricity installations under the concession regime, many should already have been renewed or will see their concession expire in the coming years. The renewal of these concessions through a competitive bidding process was first begun in 2010, but was never completed.

This article explores the development of hydropower in the context of France’s 2015 energy transition law, which created a new regulatory framework that clarifies the rules of the game, but might also translate into fewer hydropower concessions being renewed in the short term as a result of concession extensions.