* French nuclear power output to be capped at current 63.2 GW
* No reactor closure, lifespan limit or extension included in law
* New measures to boost electric cars, insulation work (Adds details, quotes, reactions)
By Michel Rose
PARIS, June 18 (Reuters) - France will boost renewables and cap nuclear power production at current levels but leave any reactor closures to be decided at a later date, according to a bill unveiled by Energy Minister Segolene Royal on Wednesday.
The nuclear cap will be 63.2 gigawatts (GW), effectively forcing EDF to shut some capacity if it wants to connect its Flamanville reactor that is under construction to the grid in 2016 as planned and making it inevitable that the Fessenheim plant on the German border is closed.
But apart from Fessenheim, which President Francois Hollande promised during his presidential campaign to shutter, the fate of other nuclear reactors will be left to five-year energy plans to be passed by decree in the future.
"We won't exit nuclear energy, that's not the choice we're making, it is thanks to nuclear energy that we can carry out this energy transition in an untroubled way," Royal said.
Hollande, who had pledged to cut atomic energy to 50 percent of French power output by 2025 from the current 75 percent - the highest share in the world - has met stiff resistance from unions and local politicians over any potential plant closures.
Royal, his fourth energy minister since election in 2012, is keen to avoid a public focus on the nuclear question and ensure a swift adoption in parliament of a law that also contains measures to boost renewable sources and energy savings.
"It's an opportunity to cut the country's energy bill but also to reduce energy bills for all French people," Royal told a news conference.
Wiping off the books a big chunk of its oil and gas imports is crucial to boost France's diminished competitiveness, given its 69 billion euro ($94 billion) energy bill amounted to almost all of its trade deficit in 2012.
A tax credit worth 30 percent of households' insulation bills will be introduced for renovation work carried out between Sept. 1, 2014 and Dec. 31, 2015.
Drivers scrapping diesel-powered cars to buy an electric one will be entitled to a bonus of up to 10,000 euros ($13,500).
Royal unveiled new long-term targets, including bringing the share of renewable energy in final energy consumption to 32 percent in 2030, although France looks set to miss its current target of 23 percent by 2020.
The growth in renewables has lagged neighbouring countries, with wind power capacity reaching about 8 GW in 2013, against 33 GW in Germany, due to complex administrative procedures and an uncertain legal framework.
"It's not normal that it takes eight years to build an offshore wind farm in France, and two and a half years in other countries," she said, adding that procedures will be simplified.
France will also aim for renewable energy sources to make up 40 percent of its electricity production by 2030, versus less than 20 percent now, 38 percent of heat consumption and 15 percent in the transport sector.
The French nuclear watchdog ASN was also given new powers to fine firms such as EDF and Areva for safety breaches but the law made no mention of a possible lifespan extension for nuclear reactors, which the ASN is expected to review in 2015.
Environmental group Greenpeace, which advocates a closure of current reactors when they reach 40 years, said the new law bore the mark of state-owned utility EDF, which has argued for an extension of the lifespan to 60 years.
"If the bill remains as it is, without any limit on the age of nuclear reactors nor any closure mechanism, there will be none of the promised energy transition," said Jean-Francois Julliard, head of Greenpeace France.
($1 = 0.7383 Euros) (Reporting by Michel Rose; Editing by Brian Love and David Evans)