P14
FOCUS EMERGING DH MARKETS
By Jesper Boysen, Sales Director, BROEN
With 65.8 million citizens (13% of EU28) - and a climate requiring more than 2,200 heating degree days per year (DK comparison is above 3,100) - district energy should be a key parameter in the French energy mix, but below 5 million citizens or less than 10% of the French people have in fact district heating in residential homes. Heating and cooling take up 45% of the accumulated French energy consumption – and residential heating 62% of this. The demand for cooling is growing, but still at a lower level and concentrated around the service sector in larger cities (museums and public buildings etc.). Some 93% of the cooling demand derive from the service sector – only 4% residential and 3% industrial. With 42% of the heating and cooling need, natural gas is a key component in the French energy mix – oil and district heating come in second with each 12%. FRENCH ENERGY POLITICS According to Euroheat & Power, heat networks currently provide approximately 6% of France’s heat demand. However, the sector is expected to grow in the near future given the ambitious target set in the 2015 Energy Transition Law. Compared to 2012, district heating and cooling from renewable and recovered energy sources are assumed to increase by a five-fold by 2030. This is equal to an annual growth of 10% or grid extensions of 930 km on average. The growing French energy sector is subject to a wide range of regulations like tax and finance laws impacting the current and future opportunities in France, such as the subsidies from the heat fund, reduced VAT rate for energy grids with more than 50% renewables, thermal regulations and the zoning rules.
SUPPLYING TO THE FRENCH DISTRICT ENERGY MARKET With the given macroeconomic and political framework in France, it is important for foreign companies to have a local representation in France. It is critical to understand local legislation and have knowledge on subsidies - not to mention that up to date local project experience knowledge and contacts are necessary in order to succeed. The personal skills of course need to include technical, language and cultural skills. District energy is not new to France, but there will be lessons to learn when the market takes off as expected in near future. It is going to be very important to deliver from experienced suppliers with proven quality, logistics and value chains in place in order to avoid quality defiance on an expected steep growth curve.
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