PARIS Jan 14 A French-German joint initiative
in the energy sector announced by President Francois Hollande is
likely to focus on renewable energy but is not aimed at forging
alliances between major utilities firms, political and
industrial sources said.
Hollande surprised markets on Tuesday with a reference to
the creation of a Franco-German joint venture energy company
modelled on European aviation group Airbus, but sources
told Reuters that French state-controlled utility EDF
and German energy major E.ON had not been consulted
about a major cooperation initiative.
"We are very satisfied with Airbus," Hollande told a news
conference. "The idea is to make a big French-German company for
the energy transition."
The announcement was one of an avalanche of new-sounding
proposals put out by Hollande, determined to seize back the news
agenda from allegations that he is having an affair with an
A French government source told Reuters that Hollande wants
concrete proposals for cooperation in the renewable energy
sector at joint French-German cabinet meeting scheduled for a
"The president wants to encourage French and German
companies in the area of energy transition, and to bring
together some of our industrial capacities," the source said.
No major operation is planned or imminent, he added.
A French business source said the cooperation would likely
involve the French-German Office for Renewable Energies
(L'Office franco-allemand pour les energies renouvelables), an
initiative put in motion by former energy ministers Peter
Altmaier and Delphine Batho last summer.
The sacking of Batho shortly after the meeting and the
German coalition talks have delayed the initiative, but with new
energy ministers in place in both countries, the initiative will
get new impetus, the source said.
Batho has now been replaced by Philippe Martin, while German
chancellor Angela Merkel last month appointed SPD member Barbara
Hendricks as environment minister. Hendricks is also in charge
of nuclear safety.
Initial talks in the French-German energy initiative focused
on security of supply, better interconnection of power networks
and the support for renewable energies.
A coordinated capacity mechanism to reward utilities for
keeping power generation capacity on standby is also on the
agenda. E.ON CEO Johannes Teyssen and French GDF Suez CEO Gerard
Mestrallet have both called for a capacity mechanism initiative.
France and Germany are both undertaking major shifts in
their electric power generation mix.
Following the Fukushima disaster in 2011, Germany has
decided to phase out nuclear energy, while Hollande has pledged
to reduce France's reliance on nuclear power in its power mix
from the current 75 percent to 50 percent by 2020.
Better network connections between the two major power
markets is also crucial as both face very different peak load
challenges. Germany is vulnerable to the intermittence of its
massive renewable energy capacity throughout the year, each time
there is a cloudy, windless day.
France, which relies heavily on electricity for residential
heating, is vulnerable during the coldest winter days, which
generate peak demand between mid-January and mid-February
Last summer, Altmaier told a conference in Paris that both
countries could lower power prices and boost security of supply
by cooperating more closely in the field of energy.
(Reporting by Geert De Clercq, Julien Ponthus, Andreas Rinke
and Christoph Steitz; Writing by Geert De Clercq; Editing by