French PM Borne warns of energy rationing risk this winter

French government is drawing up contingency plans to manage national energy supply shortage

French Prime Minister Elisabeth Borne delivers her speech to business group Medef in Paris on Monday. AP
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French Prime Minister Elisabeth Borne on Monday urged company bosses to find ways to reduce their energy consumption as she warned of the risk of rationing this winter.

"If we act collectively then we can overcome the risk of shortages," Ms Borne told the Medef business group.

"But unless everyone takes part and if all the bad-case scenarios come together then we could be forced to impose reductions on consumers.

"If we end up with rationing, companies will be the most affected and unfortunately we need to be prepared for it."

Ms Borne said the government was already drawing up contingency plans, including a "quota-trading system" that would enable companies to buy and sell shares of power.

The government was also preparing measures to support companies that would be "too severely affected" by rationing.

The clear warning about the risk of shortages further underlines efforts by the government to prepare public opinion and businesses for looming difficulties caused by the war in Ukraine.

Last week at the first Cabinet meeting since the August summer holidays, President Emmanuel Macron warned that France might need to make "sacrifices" as a result of what he called the "end of abundance".

"Every company needs to mobilise and act," Ms Borne said, "I call on everyone to establish their own energy-saving plans in September.

She said that the crisis would help with the transition from fossil fuels

"The months ahead are just a step in the bigger transition that we need to make," Ms Borne said.

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France is more sheltered than many European countries from the surge in gas prices caused by Russia's decision to reduce its exports to Europe after its invasion of Ukraine in February.

France generates about 70 per cent of its electricity from a fleet of 56 nuclear reactors, but 32 are offline for routine maintenance or to evaluate corrosion risks.

"The restarting of reactors that have been shut is essential to avoid blackouts," Ms Borne said.

Mr Macron struck a more upbeat tone during a visit to Algeria last week, where extra supplies from the North African producer were discussed.

"We are not going to have any problems because we depend very little on gas," he said in Algiers on Friday.

"We have one pipeline with Norway. We increased the volume and we've diversified things."

Mr Macron spoke of a new terminal able to process liquefied natural gas in the northern port of Le Havre, and efforts to fill French gas storage centres, which were 90 per cent full.

"So from a purely French perspective, things will be OK this winter," he said. "The issue is a European one."

Mr Macron said "solidarity" might be needed to help fellow EU partners who are more dependent on Russian gas.

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Gas accounts for about 20 per cent of France's overall energy consumption, but is used as a power source for less than 10 per cent of its electricity, the International Energy Agency says.

French Energy Transition Minister Agnes Pannier-Runacher told Medef that the weather was "the most crucial factor of the months ahead".

Claire Waysand, deputy chief executive of energy supplier Engie, said: "To be sure that we get through winter with enough electricity and gas, we have an interest in it not being too cold.

"If so, then there might be days when there are real tensions."

Updated: August 29, 2022, 11:57 PM