Industry: a chronicle of the declared crash (but rest assured, the government wants to reindustrialize France green and legal)
A worker inspects a soft drink can production line at the Ball Packaging factory in Bierne, northern France, in December 2022.
Atlantico: Don’t fall It is a cause for concern as electricity consumption by large industry accelerates to around 18% within the last 30 days. How can it be explained? Is the government’s strategy, if any, doomed to failure?
Thierry Bros: With current energy prices, producers can no longer afford to make a profit. If we are to re-industrialize Europe, we need abundant, cheap and carbon-free energy, but it is not there. The energy transition will be more of a transition to electric power, so if you change all thermal cars to electric cars tomorrow, we’ll need a nuclear fleet of ten additional reactors. We are asking the French to buy electric cars, but nothing is moving in terms of building reactors. Emmanuel Macron’s promise to build six nuclear reactors remains a promise, as it was made a year ago. By law, we still have to proceed with the dismantling of 14 reactors. Those with happy sobriety scenarios actually had a hidden agenda of decline that would logically follow.
Loic Le Floch-Prigent: It is difficult to interpret the figures covering confectioners’ downtime, which is often used for inventory and maintenance. But it is clear that calls for vigilance were often heard as encouragement to those who could afford to produce outside of France. There was no “strategy” there, just a willingness to open an umbrella to prepare for irresponsibility in the event of a shortage. All this is ridiculous, the industrialists are waiting for the announcement of the actions that will lead to the availability of abundant and cheap energy again, and the disturbances in the current prices of electricity scare them. At the end of January we will see production and therefore consumption pick up again, which would be good news!
Power failure: a chronicle of declared failure
Bruno Le Maire confirmed : “One of my priorities for 2023 is to accelerate the creation of industrial areas in France. This industry should be green. In the near future, I will propose a bill on this subject. How can this promise be understood in light of the current crisis?
Thierry Bros: It doesn’t make any sense. We have to make sure that the person who is here today can survive, it will not be bad. Since 2021, we have seen the energy crisis looming, but nothing has been done. The government only recognized this with the outbreak of war in Ukraine, but public and private investment in the energy sector is still expected.
Moreover, I don’t believe that the situation is getting worse because of market liberalization, because if we look at history, Thatcher ultimately liberalized the market by increasing supply to restore the purchasing power of the people. What are we doing today!
Loic Le Floch-Prigent: This is again a communication policy with the keyword “green”. But the atmosphere of the processing industry, “classic” if you like, is far from this optimism! Bureaucracies do not have the warm welcome the minister envisions, they delay industrialists’ decisions, doubt, then protest, while ubiquitous controls lead to official notices and disproportionate “green” investment demands. What is done in a few weeks in most countries takes months and years in France, as evidenced by the failure of Louis Le Duff with his Bridor factory at Liffre (near Rennes) who waited five years to strike the first rod. and now who knows we may have to wait another two years to keep our hopes up! The only decision made was to legislate to accelerate the construction of offshore wind turbines, which are completely useless in the coming years to provide national electricity! If this is the Minister’s aim, he will have to explain to us the actions he plans, but our present concern is more to succeed in preserving the remnants of the French industrial fabric, which has been damaged for years but is now facing dramatic energy. costs and the terrifying acceleration of so-called “green” control.
Loic Le Floch-Prigent: “As a former head of the GDF, I can tell you that the government’s plan to deal with the risk of blackouts is not a plan”
How does the current economic situation stack up against the structural French bureaucratic inertia that has traditionally plagued our industry?
Loic Le Floch-Prigent: If only inertia! There is also a lot of bureaucracy that wants to block “dirty” industrial development, i.e. manufacturing, with machines. The liberation of some from the idea that industry can be carried out without factories is still alive, this has caused difficulties in the recognition of professional bachelors, slowed down the organization of education, justified the deindustrialization of our country, the recovery process will take a long time. , challenging and cultured. The economic situation is not encouraging, so everyone must commit to the development of our industry if we are to succeed.
French industry continues to build factories, according to research published in September by Trendeo. Despite the war in Ukraine and rising prices, the country’s re-industrialization continues. In the first half of 2022, 90 factories were established and 35 were closed. Many companies are worried about their energy money, but only 300 applied for the public fund that was created. What do you think about this information? Conversely, aren’t industry failures a harbinger of multiple bankruptcies in 2023?
Thierry Bros: The industrial age is long. Manufacturers have already realized that it has become difficult to work in Europe.
Loic Le Floch-Prigent: “Whatever you need » bankruptcies are down, so we’re going to see some kind of catch-up and an increase in them. In case of management errors or lack of innovation, it is still necessary to distinguish between the inevitable destructions resulting from recent events. If you don’t look at the details, the numbers are misleading, and these details escape us today, provided that we observe the fatigue of many business leaders in the face of the existing difficulties and the accumulated bureaucracy in each of our regions. Business leaders who have established and become successful companies do not want their children to continue their operations, considering that it is too difficult, not profitable enough… More bankruptcies in 2023? Of course! Too many job sales, too many departures and the energy bill is an unfair accelerator of this phenomenon. This is why it is important for national businesses to urgently address the energy challenge, as it will or will not give hope to the thousands of business leaders who expect nothing from promises but action, aid and subsidies.
But what will be the fair price of electricity in France today?
What are the possible solutions to lower the price of electricity?
Thierry Bros: The energy transition will be costly. The fixed price of electricity is twice the price of gas plus 0.4 times the price of carbon. We have to find a way to lower the price permanently. Looking at the seemingly sensible Greek proposal, I tell myself that things can be changed. In electricity, there are two different types of electrons: those that have priority access to the grid and those that do not. Renewable sources have priority access to the grid and therefore do not contribute to the balance. It would be necessary to pay a part of the electricity at a fixed price according to the share of new market entrants (wind, solar), and the rest at the market price.
There is an Arenh part with the core, so a small part of the core can be paid at the market price. We would have 2/3 of that coming with quasi-priority access to the grid, a large fraction of nuclear power, costing around €46 per MWh. But if this is not done, it is because of pressure from renewable industries.