Fuel, electricity, gas... We explain why Engie, EDF and TotalEnergies are calling for an "immediate" reduction in consumption

Fuel, electricity, gas… We explain why Engie, EDF and TotalEnergies are calling for an “immediate” reduction in consumption

When three competitors roll up their sleeves together. In a joint op-ed published in the Sunday newspaperSunday, June 26, the leaders of TotalEnergies, EDF and Engie call on the French to reduce “immediately” their consumption of fuel, electricity and gas. According to the three energy access providers in France, the risks of shortages and soaring prices are such that they go so far as to threaten “social cohesion” next winter.

What are the fears raised by the three energy suppliers?

“For months now, the European energy system has been under severe strain and the French energy system has not been spared”, exhibit Catherine MacGregor, CEO of Engie, Jean-Bernard Lévy, Chairman and CEO of EDF, and Patrick Pouyanné, Chairman and CEO of TotalEnergies. According to them, “the soaring energy prices resulting from these difficulties threaten our social and political cohesion and have a too heavy impact on the purchasing power of families”.

According to the three leaders, the only way to avoid a shortage of gas, electricity and oil next winter is to reduce “immediately” energy consumption. They therefore call on the entire population as well as businesses to make a collective effort.

“Acting this summer will allow us to be better prepared to tackle next winter, and in particular to preserve our gas reserves.”

The leaders of Engie, EDF and TotalEnergie

in a gallery at the “JDD”

“The best energy is the one we don’t consume”, emphasize the three leaders, who call for “awareness and collective and individual action so that each of us – each consumer, each company – changes its behavior and immediately limits its consumption of energy, electricity, gas and petroleum products”.

How do they explain these tensions?

It is an obvious consequence of the war in Ukraine, first. Russian gas deliveries by pipeline have “sharply lower for some countries, including France”. “Although on the rise, imports of liquefied natural gas (LNG) are today still too limited to compensate for these declines. The level of alert on gas stocks at European level is therefore high and rationing measures are implemented in some countries”they point out.

Asked by franceinfo in early June, researcher Francis Perrin already shared these concerns. “In the context of the war in Ukraine, there is a risk of shortage, which does not mean that this risk will materialize”dreaded the director of research at theInstitute of international and strategic relations (Iris). He warned: the world oil market could experience tensions between the level of production and demand during the summer. “In the United States, we are entering the ‘driving season’, the time of year when automobile travel is the most important, because people go on vacation. And therefore the time when we need more automobile fuel. In China, therelaxation drastic confinements imposed on certain cities will lead to a return to normal travel, and therefore an increase in oil demand.

The weather also has something to do with it. “Climatic conditions and drought are reducing hydraulic production”, write the three leaders in their forum. A large part of the French nuclear fleet actually requires water from rivers to be cooled. Consequently, too low a water level, as was the case at the beginning of June for example in the Rhône, can jeopardize these activities.

Can there be a shortage?

The Ministry of Energy Transition was reassuring to franceinfo in early June: “There is no risk of a shortage in the short term. There are 90 days of strategic stocks, in addition to commercial stocks, and these stocks are distributed throughout the territory.” Jan Horst Keppler, professor of economics at Paris-Dauphine, did not anticipate generalized dry failure either. However, potential one-off shortages are possible: There are different grades of oil, some refineries may not have the grade of oil they are used to and may not have the ability to substitute one grade of oil for another. This could create one-off shortages at some refineries.”

“The availability of gasoline, diesel oil and heating oil will have to be monitored very closely, even more so than the availability of crude oil.”

Jan Horst Keppler, economist

at franceinfo

But if we are to believe the bosses of TotalEnergies, EDF and Engie, the situation seems more worrying. “We must initiate a major energy efficiency program and a national waste hunt. The effort must be immediate, collective and massive. Every gesture counts”write the three suppliers.

This is also what the operator of the electricity transmission network (RTE) suggested two weeks ago to TF1. “We have, for several years, announced that a series of winters, from 2018 to 2024, would be delicate”notes RTE. “We are in fact in a pivotal period, marked by a series of events to be managed: the closure of oil and coal-fired power stations, the [nucléaire] of Fessenheim, but also the delay in the development of other modes of production”.

As of May 24, 27 of the 56 French nuclear reactors were shut down, according to EDF. That’s almost half. An unprecedented situation, which is explained by planned closures but also by an unforeseen problem of corrosion.

Is France the only country concerned?

No. To compensate for the drop in Russian gas deliveries, Germany, for example, will return to coal. A appeal provisionalpromises the German Minister of Economy and Climate, who recognizes that this is a decision “bitter“. The extension of certain power stations will be a short-term measureover a period limiteduntil March 2024, ensures Berlin.

Other countries in Europe have recently announced similar measures. Austria, also dependent on Russian gas, has also announced the upcoming restart of a disused coal-fired power plant, in order to be able to compensate for a possible shortage.

Latest example: the Netherlands. Until now, Dutch coal-fired power plants could not operate at more than 35% of their capacity, according to a law in force since January 2022 to reduce the country’s CO2 emissions. They can now “operate at full capacity”announced Monday, June 20, the Dutch Minister for the Environment and Energy, Rob Jetten.

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