Talking New Energy: What’s hot in France’s energy transition?

[00:00:01.760] - Jon Slowe

Welcome to Talking New Energy, a podcast from LCP Delta. I'm Jon Slowe.

[00:00:07.660] - Charmaine Coutinho

And I'm Charmaine Coutinho. Together, we're exploring how the energy transition is unfolding across Europe through conversations with guests at the leading edge.

[00:00:16.590] - Jon Slowe

Hello, Charmaine.

[00:00:17.870] - Charmaine Coutinho

Hi, Jon. How are you doing?

[00:00:19.330] - Jon Slowe

Good, thanks. Today, Charmaine, we're going to France. Well, we're not actually going to France.

[00:00:24.299] - Charmaine Coutinho

If only!

[00:00:25.370] - Jon Slowe

I know. It'll be nice. We're going to get some highlights from what is very much France's energy transition event and conference meeting place called BePositive. It was held in Lyon recently. I've never been to Lyon. Have you, Charmaine?

[00:00:42.040] - Charmaine Coutinho

Yeah, I went on holiday, and actually, I think I went for work as well. It's a lovely place. I can totally see why you'd hold a conference there.

[00:00:49.640] - Jon Slowe

Well, we've got with us two colleagues who are at BePositive and going to give us highlights of what was hot at France's energy transition meeting place. Hello to Mladena Pavlova. Hi, Mladena.

[00:01:07.900] - Mladena Pavlova

Hi, John. Hi, Charmaine.

[00:01:10.440] - Jon Slowe

Hi, George Husni. Hi, George.

[00:01:12.220] - George Husni

Hello, Charmaine. Hi, John. Just a quick note, Lyon is known for its gastronomy. It is the gastronomical capital of France, so a lot of very good restaurants there.

[00:01:25.240] - Charmaine Coutinho

We're not sponsored by the Lyon Tourist Board.

[00:01:27.700] - Jon Slowe

If I was to go to Lyon, George, what should I order in Lyon?

[00:01:33.360] - George Husni

Well, you should definitely be going to what they call their Bouchon Lyonnais, which is a famous restaurant type where you eat a lot of pig, where you eat a lot of very specific fish, where you eat a lot, basically, and it's more and more healthy. I won't go into the unhealthy details because these restaurants are getting more and more healthy.

[00:02:01.230] - Jon Slowe

Okay. Well, this is a bite-size podcast, so let's get to talking about BePositive. We'll do it in a normal way, George and Mladena. If you could each share your top three takeaways. What was hot? What were people talking about? You may have different takeaways in mind, or the same takeaways, we haven't rehearsed. Mladena, let's go with you first. What are your top three?

[00:02:22.900] - Mladena Pavlova

Just quickly to say that it was our first time exhibiting, and the whole French team from LCP Delta was super enthusiastic about it. It was great to have on-the-spot discussions with contacts and connections that's easy to reach. It was interesting that there was a strong presence of distributors at the event, highlighting a great opportunity to support them in better understanding new technologies and the evolution of these new technologies markets because distributors face several challenges as the market is evolving. This was interesting to discuss with them. Where they can position themselves in this market that is evolving, that is shifting. What is the innovation in the supply chain? Also international distributors, so what are their strategies so they can adapt to the specifics of the French market. The discussions we have show this broader need to tailor insights and strategic support for distributors today so they can adapt to the changing market and they can capture value.

[00:03:50.530] - Jon Slowe

Okay. Distributors who are bringing technology product to the French market working out the best way to do that. Second highlight, Mladena?

[00:04:03.660] - Mladena Pavlova

There was a strong presence of the PV players. The solar sector is currently a hot topic in France as there were ongoing regulations regarding decreasing feed-in tariffs. At the event, there was a low policy visibility during our conversations from different players from the solar sector. But it was good to have real-time discussions as some modifications in the regulation were made during the three days of the event.

[00:04:47.450] - Charmaine Coutinho

Ah right. That's how live changes to policy that gets everyone talking. Yeah. Yeah, interesting because I think, did you say there was not very much policy presence there?

[00:05:00.980] - Mladena Pavlova

No.

[00:05:01.300] - Charmaine Coutinho

No. Okay. It's interesting because it's quite a good opportunity, especially if you're changing things as the government, to go and talk to the industry. But maybe that's fairly common at these events.

[00:05:12.510] - George Husni

Yeah. There's something really funny that happened because you know that French like to demonstrate things. So during the exhibition, there were a group of people completely against this decrease ban that were disguised and putting on the mask of the energy transition minister and going around the exhibition saying, "We don't want the feed-in tariff to end with big solar panels saying, You are killing the solar area, the solar sector in France, blah, blah, blah." So this is something that was a little bit unsettling.

[00:05:58.880] - Jon Slowe

That decrease in the feed-in tariff, is that meaning there's a lot more interest in self-consumption and also in collective self-consumption? Is that driving a change in the nature of the solar market in France?

[00:06:14.700] - George Husni

Absolutely. Absolutely. This is exactly what is happening. First of all, it will encourage people to use what they produced in terms of solar, and it will enhance the battery, the storage area. It's a little bit hard, I think, to predict the short-term impact that it will have because there are still some major concerns, for example, the fact that residential tariff cuts are happening before the reduced VAT kicks in, because in parallel in September, there will be a reduced VAT on solar. Then there's also a €10,000 deposit now that will be required for a mid-sized project. Overall, there are some very positive things for, like you said, self-consumption, for the storage industry, and moreover, for everything that is HEM, Home Energy Management. But at the same time, I think that we will be passing through a few months of uncertainty.

[00:07:22.400] - Jon Slowe

Yeah, a change in the solar sector.

[00:07:25.700] - George Husni

Exactly.

[00:07:25.980] - Jon Slowe

Keeping on time. So, Mladena, we had from you the third one. Very quickly, third one, and then over to George.

[00:07:35.120] - Mladena Pavlova

Yeah, very quickly. So the heating sector, because currently the market conditions are quite difficult in France for heating players. There was no real product innovation compared to previous years and other events. People were talking quite a bit about hybrid systems and that hydrogen and biomethane will play a role in the decarbonisation of heat in France.

[00:08:07.580] - Jon Slowe

Interesting. Maybe slightly controversial in what is a very electric-dominated market, Let's move on to George. George, your top three.

[00:08:18.850] - George Husni

Yeah, absolutely. I mainly agree with Mladena. The first thing that struck me the most is definitely this debate going around the S21 decrease, the solar feed-in tariff that will be removed. The second one is indeed, like Mladena said as well, the French distributors are evolving. I was really amazed by the quantity of different distributors that were there. I was not expecting that much. What was striking is that they are restructuring the value chain. Some are becoming installers themselves. Others are going straight B2C and trying to own the full customer journey.

[00:09:02.610] - Charmaine Coutinho

Distributors, George? Absolutely.

[00:09:05.050] - George Husni

Yeah, definitely. They're not there yet, of course, but they're thinking you know, they're looking into HEM systems. The main question they ask me is, how come 1KOMMA5° never entered France? How come 1KOMMA5° is not in France? Is there a role for us to play? Do you see what I mean, Charmaine? This is why they are looking into, okay, but maybe there's something to be doing since we are a very big company, understanding the electronics behind it. I even saw cases where companies spawn off entirely new brands or subsidiaries like Talios, which originally came out of AXDyspro, or Sonepard and Allianz, which are both also distributors that are launching their solar-focused arms. It was really interesting what's happening with the French distributors

[00:09:59.940] - Jon Slowe

So that whole supply chain, that whole value chain of taking products to market, potential for a lot of change there, and maybe that will result in better experiences for customers and more choice for customers. Definitely.

[00:10:14.690] - George Husni

Absolutely. I think the last thing that I would highlight that was a little bit striking is, of course, you all know that flexibility is definitely becoming a hot topic, even in France. And One key driver that is upcoming is the peak, off-peak pricing system that will become much more dynamic starting in September 2025.

[00:10:41.960] - Jon Slowe

Good.

[00:10:42.850] - George Husni

It will push customers. Exactly, finally, things are getting a little bit more dynamic in terms of types in France.

[00:10:51.480] - Charmaine Coutinho

George, just for our listeners, when you talk about flexibility, you talk about demand-side flexibility, right?

[00:10:56.960] - George Husni

Demand-side flexibility, absolutely.

[00:10:58.070] - Charmaine Coutinho

For those of you not familiar with the French market, historically, the number of tariff is not limited, but there's not as much variation given a couple of one or two major players. This is quite a big progress because how do you engage customers if actually there's not a lot of tariff choices? So fantastic.

[00:11:18.730] - George Husni

Yeah, absolutely.

[00:11:20.330] - Jon Slowe

Well, the peak-off peak is very well when it's been nuclear dominated. But as we get more renewables onto the system, those peak-off peak need to become more dynamic. So that's great to hear that that's happening in the French market.

[00:11:32.710] - George Husni

Yeah. So we will hopefully see new value streams, right? Like shifting consumption to low price, our selling flexibility service.

[00:11:40.320] - Charmaine Coutinho

Well, maybe that's the innovation that will happen in two years time for the next conference, right? And Mladena said there wasn't a huge amount of innovation, but I'm sure people will be between now and next time there's BePositive. There'll be more demand-side flexibility ideas.

[00:11:55.880] - Mladena Pavlova

Well, absolutely. Yeah, it's evolving fast over...yeah. We'll see over the next year.

[00:12:02.470] - Jon Slowe

To try and weave that all together then, we've got change in the solar market that's going to result in more self-consumption, more intelligent consumption. We've got distributors bringing low-carbon technology, heating, PV, battery, et cetera, to customers in more innovative ways. We've got more flexibility coming to the market in terms of when those devices are used, when those assets are used. In the heating sector, hybrids, even maybe those heat pumps to become more innovative in how flexibly the heat pumps are operated. It sounds like a lot of the ingredients are there for change in the French market. Like you said, Charmaine.

[00:12:43.390] - George Husni

User engagement.

[00:12:45.350] - Jon Slowe

Yeah, user engagement. Is that what missing, George, or is that what you think is coming?

[00:12:49.330] - George Husni

Yeah, I think it's how to wrap it up. I think that France will have to... I mean, all the direction that they took is towards the real challenge will be the user engagement now. We are now in this momentum, and our report in NES (New Energy Strategies) also showed it. We have to engage customers differently now in France.

[00:13:12.360] - Jon Slowe

Cool. Well, we've gone a little bit over. Charmaine, I think that's because I got a bit carried away about Lyon and food in Lyon at the beginning. I blame the time keeping, my poor housekeeping on that. George Mladena, thank you very much for sharing. Thank you, guys.

[00:13:28.900] - Charmaine Coutinho

Thank you.

[00:13:29.690] - Jon Slowe

Okay, thanks, everyone, and goodbye.

[00:13:32.550] - Charmaine Coutinho

Thanks for tuning in.

[00:13:34.460] - Jon Slowe

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[00:13:42.550] - Charmaine Coutinho

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