* Hollande wants Franco-German energy JV modelled on Airbus
* Plans baffles energy firms, raises eyebrows in Berlin
* Huge cultural differences have brought down earlier
(Adds analyst quote, problems with earlier Franco-German JVs)
By Julien Ponthus and Geert De Clercq
PARIS, Jan 15 French President Francois
Hollande's surprise announcement of a Franco-German energy joint
venture did not target major utilities but renewable energy and
electricity networks, his aides said on Wednesday.
A top government source told Reuters a joint French-German
cabinet meeting on Feb. 19 in Paris will discuss cooperation in
renewable energy following Hollande's proposal on Tuesday.
Ministers will also discuss smart grids, energy efficiency
and electricity storage in response to Hollande's call, made at
his New Year news conference, for a Franco-German energy firm
modelled on aerospace group Airbus..
Hollande's plan baffled French and German industrialists and
raised eyebrows in Berlin, but the source said Hollande had
discussed energy cooperation with German Chancellor Angela
Merkel during her visit to Paris on Dec. 18.
"We have a strong interest in the closest possible
cooperation on energy policy whether on a political or corporate
level," a spokesman for the German Economy Ministry, which is
responsible for energy, told reporters.
A source at a major French energy firm said management was
completely taken aback by the announcement.
Sources ruled out an imminent capital operation or alliance
between French state-controlled utility EDF or partly
state-owned gas and power group GDF Suez and one of the
major German utilities such as E.ON or RWE.
"The president's goal is to coordinate our energy
transitions and to find ways to take industrial initiatives
together," the French source said.
Hollande wants French and German energy firms to pool their
capacities in the way Airbus brought together engineering and
production skills from the two countries.
"If it had not been for Airbus, our companies would now be
subcontractors to international aviation firms," the source
said, adding that while the industries were different, the
challenges were similar.
However, industry sources say easy cooperation between the
large state-driven French energy companies and the nimbler
private German firms should not be taken for granted.
While Airbus is a commercial success, the firm's complex
bi-national governance has made the company hard to manage and
has been the source of many time-consuming disputes.
An alliance between French state-controlled nuclear group
Areva and Siemens in the nuclear sector lasted only a
few years and ended in acrimony and legal battles before the two
sides parted in 2009-2010.
Helmut Edelmann, director utilities at Ernst & Young, said
that if Germany and France could agree on a common line on the
area of renewable energy, a joint venture might work, but it
would have to overcome huge cultural differences.
The French power market is centralised, largely
government-owned and relies heavily on nuclear power, while the
German market is very fragmented, mainly private and is
completely pulling out of nuclear power by 2022.
"From my point of view, the differences are simply too big,"
The government source said that Hollande's Airbus example
does not mean the cooperation necessarily runs via the large
listed companies that dominate the energy sector in both
"The idea is not to put the likes of Siemens, Schneider or
GDF Suez into one mega-company," the source said, adding that
capital alliances could not be ruled out.
Cooperation will likely take the form of joint ventures and
industrial alliances, and small and medium-sized companies will
play a major role.
The German Economy Ministry spokesman said Hollande's
cooperation idea will be intensively discussed in the coming
weeks and months.
"If I understand it correctly, the French president was not
suggesting a 1-1 transfer of the Airbus model to other branches,
he was saying that this kind of close cooperation on different
levels can be a be a guide and we share that view," he said.
(Additional reporting by Madeline Chambers in Berlin, Benjamin
Mallet in Paris and Christopher Steitz in Frankfurt; writing by
Geert De Clercq; editing by David Evans)