Earlier this summer, continental Europe experienced a serious, prolonged heat dome that drove temperatures to record highs and disrupted daily life for millions. In France alone, major metro areas were pushed to their breaking point, and excess deaths from the event are estimated to have reached more than 5000. These severe weather patterns, which have become more common in recent years, have renewed discussion of Europe’s relative lack of air-conditioning (A/C) penetration, particularly compared to the United States. Calls for a serious national project in France to install air conditioning have also been growing louder in recent years. Such a plan could conflict with the country’s climate commitments, however, with some officials rejecting calls for cooling due to climate and environmental concerns. There are also important questions surrounding what massive A/C adoption would mean for the country’s energy grid.
Concerns over air conditioning’s implications for energy systems and grid stability are worth taking seriously. Temperatures are the most significant drivers of daily electricity load, and in the heavily air-conditioned United States, summer-peaking grids are often pushed to their limits during the hottest days of the year. Yet in France, summer peak load does not approach the highs of the winter due to a heavy reliance on electric heating and relatively little air conditioning. This is in stark contrast to U.S. grid regions like CAISO in California, which sees broadly similar temperature distribution throughout the year but has more air conditioning and less electric heating than France. This implies significant headroom for France’s summer load to grow, especially during heatwaves, when air conditioning could save lives.
One important caveat, however, is that available power generation capacity on the French grid changes significantly during different seasonal peaks. During the winter, cold temperatures increase the efficiency of thermal generation plants, which burn coal, gas, or nuclear fuel, and are correlated with both high wind speeds and lower solar output. By contrast, thermal efficiency decreases during summer heat waves, especially for nuclear plants reliant on cold river water to cool their reactors. This, combined with average forced outage rates seen for other fuel types, yields lower available capacity in the summers than in the winters. Yet the headline number of nearly 90 GW of available capacity during hot summer evenings yields 28 GW of excess capacity, providing more than enough headroom to enable mass air-conditioning adoption across France.
However, while current capacity numbers may imply a relatively straightforward path towards A/C adoption and heat adaptation across France, the future trajectory of the country’s grid is concerning. As discussed in a recent Insight, France’s nuclear fleet, the backbone of its grid and a source of price stability for decades, is rapidly aging into retirement, with the earliest new nuclear capacity only expected online by 2040. Forecasted load is expected to surpass net generation from renewable energy and nuclear energy starting in 2030, which will likely push grid operators to rely more heavily on fossil generation to meet reliability needs. Large-scale A/C adoption may accelerate this trend and make fossil generation the marginal source of France’s electric supply. French policymakers are thus confronted with two potentially competing mandates: drive large-scale A/C adoption to adapt to increasingly frequent heat events, and meet the country’s stated climate mitigation commitments. Similar dilemmas face grid operators and policymakers around the world, and it remains unclear how they will resolve them.
Be sure to check back in for more Energy Market Insights as we continue to cover the ever-evolving energy landscape.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.