The expansion of renewable energy in France over the past five years has contributed to lower wholesale electricity prices, while also increasing costs across the wider power system, according to a new report on the economics of the French electricity system published by the Energy Regulatory Commission (CRE).

The regulator estimates that the development of the renewable fleet between 2020 and 2025 has reduced electricity market prices by around €20/MWh compared with the 2020 generation mix, producing a direct benefit for consumers.

At the same time, this expansion has resulted in an approximately 5% increase in total electricity system costs, mainly due to higher renewable energy costs, largely borne by the State, and greater investment requirements for electricity networks.

Consumer savings outweigh additional system costs

The CRE concludes that, under normal market conditions, renewable deployment lowers wholesale prices and produces a favourable effect for consumers, although it also changes the distribution of costs and revenues among different participants in the electricity system.

According to the regulator, lower market prices translate into reduced costs for consumers, but they also reduce revenues for generators that do not benefit from support mechanisms and increase government expenditure.

Despite these effects, the CRE concludes that the reduction in electricity prices for consumers is greater than the additional system costs resulting from renewable energy deployment.

The analysis comes as France’s electricity generation mix undergoes significant changes. The regulator notes that recent renewable growth, combined with changes in thermal generation capacity, has created periods of excess generation capacity and altered the balance of the electricity system.

Up to €40/MWh lower prices in crisis scenarios

The regulator has also modelled the impact of France’s current renewable fleet under different energy crisis scenarios.

Its simulations show that the current renewable fleet, compared with the capacity installed in 2020, could reduce electricity market prices by between €7/MWh and €40/MWh, depending on the nature of the crisis.

Under a simultaneous scenario similar to the conditions experienced in 2022 — combining high gas prices with low availability of France’s nuclear fleet — the CRE concludes that the current generation mix is economically advantageous in terms of the net costs of the electricity system.

The findings indicate that the costs associated with renewable deployment should also be assessed against the ability of additional renewable generation to mitigate the impact of future energy crises on consumers and the wider electricity system.

CRE sees room for further renewable expansion

The report also examines how far France could continue expanding renewable capacity if electricity consumption does not increase immediately.

In the short term, the CRE’s simulations indicate that further renewable deployment remains beneficial for consumers even without an increase in electricity consumption. The regulator says this remains the case even for additional capacity beyond projects currently in the development queue.

This is because the reduction in wholesale electricity prices generated by additional renewable capacity continues to outweigh the additional costs associated with public support mechanisms.

However, the CRE warns that the situation could change over the longer term if electricity consumption remains stagnant for several years. Under such a scenario, an increase in renewable capacity beyond roughly 50% of the capacity installed at the end of 2025 would probably become unsustainable, due to rising system costs, operational requirements and redistribution effects among market participants.

The regulator therefore stresses the need to accompany renewable expansion with greater electrification of energy consumption and the development of flexibility, allowing demand to better respond to periods of high electricity production.

France’s electricity system costs €55.9 billion

The report estimates the total cost of the French electricity system at €55.9 billion in 2025, comprising €40 billion in generation costs and €15.9 billion associated with transmission and distribution networks.

According to the CRE, consumers directly covered 78.5% of total generation costs through the energy component of their electricity bills. When electricity excise revenues allocated to the State budget are included, this contribution rises to 92%.

France also had more than 160 GW of potential electricity generation capacity during 2025, while around 90 GW was available during periods of peak demand.

The regulator considers the French electricity fleet to be adequately sized, although it highlights an increase in extreme price events. In 2025, France recorded 513 hours of negative electricity prices, compared with an annual average of 179 hours between 2010 and 2020. At the other end of the market, spot prices exceeded €100/MWh for 1,807 hours, compared with an average of 606 hours over the same reference period.