Le Pen puts cutting fuel taxes and suppressing winds at the heart of its energy plan

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(Bloomberg) — As Europe suffers its worst energy crisis in a generation, French presidential candidate Marine Le Pen is proposing to subsidize consumption while further reducing supply.

The 53-year-old nationalist is narrowly ahead of President Emmanuel Macron in the polls ahead of the second round of elections on April 24. She campaigned for months on a promise to boost voters’ purchasing power by cutting taxes on gasoline, fuel oil, natural gas and electricity. This consumer aid comes with a crackdown on wind turbines, a windfall tax on some of the country’s biggest energy companies and an exit from the European electricity market.

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As energy costs began to rise last year, Russia’s invasion of Ukraine propelled them to the top of the political agenda as prices hit record highs. These increases account for more than half of inflation in Europe, costing households on the continent some 230 billion euros ($251 billion) this year.

Le Pen has cast herself as the protector of the poor, and her policies could prove effective in tackling the pain of rising prices felt by households and motorists. Their concerns were a powerful force in French politics, including the “yellow vests” movement that disrupted the early years of Macron’s presidency.

Yet his plans would leave the country increasingly exposed to energy shortages over time, according to Marc-Antoine Eyl-Mazzega, director of the Center for Energy and Climate at the French Institute for International Relations.

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“It may appeal to those who don’t like the sight of wind turbines,” Eyl-Mazzega said. “The electricity supply situation will deteriorate and investors will turn away from France.”

The heart of Le Pen’s speech to voters is a 12 billion euro cut in value added tax on energy. She also promised to scrap 9 billion euros in taxes on diesel and gasoline when she takes office if the price of oil rises above $100 a barrel. These gifts would come on top of the 25 billion euros in aid to contain the energy bills already put in place by Macron.

The tax cuts would be partly funded by ending wind and solar power subsidies, Le Pen said. Regardless of legal issues, she also promised to halt onshore and offshore wind farms under construction, jeopardizing projects currently under development by companies such as Electricité de France SA, Engie SA, Iberdrola SA, Neoen SA and Voltalia. HER. The wind turbines would be gradually dismantled when they reached “the end of their life”, according to its manifesto.

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Wind and solar together accounted for 10% of France’s electricity production last year, and that proportion is likely to rise further this year, with EDF’s nuclear output set to fall to its lowest level since 1990 due to maintenance problems and technical problems on its aging fleet of nuclear reactors. . Yet wind turbines are unpopular in parts of France, where homeowners claim they are unsightly and reduce the value of their properties.

Macron has taken steps to address opposition to wind power, pushing back the goal of doubling onshore capacity by 20 years to 2050. But the idea of ​​completely blocking the development of domestic renewable energy sources, which have become increasingly competitive as the cost of imported fossil fuels and other sources of electricity have soared, has been heavily criticized.

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“Economic and energy policy proposals are disconnected from reality,” said Michel Gioria, general delegate of France Energie Eolienne, the national wind energy federation. “It will plunge France into a difficult situation in terms of energy supply, which will keep prices high.”

Le Pen plans to solve the supply side of the energy equation by launching the construction of 20 large nuclear power plants, which would be gradually commissioned from 2031. She would also seek to reopen the two Fessenheim reactors that Macron closed there. two years, extend the life of EDF’s 56 operational nuclear power plants to 60 years and build a few small modular nuclear generators.

It is a difficult timetable given the recent results of the French nuclear industry. EDF has still not commissioned the only new reactor under construction in the country, in Flamanville, after 15 years of work. The project was hampered by technical problems and quadrupled its initial budget to 12.7 billion euros.

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Macron’s nuclear plan is to build up to 14 new large nuclear reactors, with the first pair to be commissioned from 2035. Given supply chain constraints and modern safety standards, even this proposal more modest poses considerable challenges, said the French electricity grid operator. year.

Fossil addiction

The president also wants France to build 50 offshore wind farms by 2050, and has called for increasing solar power tenfold and doubling onshore wind power. Both candidates support the widespread use in the coming decades of hydrogen, a fuel whose commercial viability has yet to be proven.

Le Pen called Macron’s plan “the biggest waste of public money” that will force France to rely on gas-fired power stations when the wind isn’t blowing or the sun isn’t shining. Her goal of reducing France’s energy consumption by 40% by mid-century is “unattainable”, she said.

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President Vladimir Putin’s invasion of Ukraine highlighted the geopolitical vulnerability caused by Europe’s heavy reliance on imported Russian fossil fuels. Le Pen’s policy would reinforce that position, said Nicolas Goldberg, an energy consultant at the progressive think tank Terra Nova.

“If we can’t meet our electricity demand because of a moratorium on renewables or outlandish assumptions about nuclear power, we’ll have to keep using fossil fuels,” Goldberg said in a note. . “Not only would the climate suffer, but also purchasing power, because this fossil fuel crisis would only get worse during his tenure.”

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