Lion Hirth and colleague: France’s nuclear crisis and Europe’s gas crisis are mutually exacerbating. Policy must promote energy savings.

Europe is already feeling the effects of the gas crisis triggered by Russia, but a lesser-known problem is threatening to exacerbate crisis: a sharply reduced capacity in France’s nuclear power plants.

France’s 56 nuclear power plants usually supply about 75% of the nation’s electricity, but due to pandemic-related maintenance delays and the discovery of widespread corrosion damage, these plants are currently only producing about half of their usual output.

In an op-ed in Tagesspiegel Background, Hertie School’s Lion Hirth and Ingmar Schlecht of ZHAW School of Management and Law warn that the gas crisis and the French electricity and nuclear power crisis are mutually exacerbating. Electricity that would otherwise be supplied by France’s nuclear plants will have to be replaced with energy from gas-fired plants, which will lead to increased stress on Europe’s already strained gas supply.

This strain is already noticeable. Other nations, including Germany, are supplying significantly more energy to France than in past years. Because of this, in May 2022, Germany burned more gas to produce electricity than ever before, despite record high gas prices.

The co-authors outline a few policy recommendations to help lessen the severity of the crisis, with saving natural gas and electricity being the crucial goal. High energy prices, they argue, must be allowed to reach households and industry in order to incentivise energy savings. Rather than energy consumption subsidies, other support instruments (e.g. direct income transfers to households, direct financial support for industry) can help cushion the effects of these high prices. Clear, consistent communication from politicians and gas providers, including transparent information about impending high prices and actionable tips for saving energy at home, is an essential tool for navigating the crisis.

Read the full op-ed here (in German)

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