The vulnerability of nuclear energy dependence: Structural risks to French economic competitiveness from the perspective of the energy crisis

Opening: Why Did Electricity Prices Skyrocket in a Nuclear Power Giant?

During the 2022 European energy crisis, France's electricity market experienced the most severe price shock—electricity prices nearly quadrupled within a year. This phenomenon seems counterintuitive: over 65% of France's electricity comes from nuclear power, with a very low share from natural gas. So what exactly caused the surge in French electricity prices? This question is not only about the energy market but also directly reflects a core vulnerability of France's economic structure: the systemic risk arising from over-reliance on nuclear power.

Background: A "Perfect Storm" in Nuclear Availability

After October 2021, the availability of French nuclear power fell to historic lows due to stress corrosion issues, maintenance delays, cooling water shortages, and other factors. Meanwhile, disruptions in Russian gas supply pushed up European gas prices. According to conventional wisdom, the rise in French electricity prices was due to the marginal gas-fired power plants setting prices in the European market—what is known as the "rising tide lifts all boats" mechanism. However, this study in *Nature Communications* used a structural causal model to disentangle the contributions of different factors, providing a more precise answer: the direct impact of nuclear unavailability was almost as important as the rise in gas prices, and the two factors reinforced each other through a causal chain.

Deeper Logic: A Causal Perspective Breaks Cognitive Myths

Traditional correlation analysis would yield contradictory conclusions: French electricity prices are highly correlated with gas prices, but given the low share of gas in the generation mix, intuition would suggest otherwise. The causal model reveals that nuclear unavailability caused France to shift from a net exporter to a net importer, forcing it to purchase high-priced gas-generated electricity from neighboring countries, thereby amplifying the impact of the gas price shock several times over. In other words, the surge in French electricity prices was not directly "transmitted" from gas prices, but rather resulted from the dependence on imports after nuclear plants were shut down.

This logic challenges France's long-standing narrative that "nuclear power equals energy independence." In reality, once a large-scale nuclear outage occurs, France's energy independence reverses instantly, fully exposing its domestic electricity market to the volatility of the European gas market.

Impact on the French Economy: Reshaping Enterprise Competitiveness and Industrial Structure

For the French economy, three aspects of the electricity price shock deserve attention:

1. Weakening of Manufacturing Cost Advantages

France has long attracted energy-intensive industries (such as chemicals and metallurgy) with its low-cost nuclear power. However, the 2022 crisis shows that this cost advantage is not stable. When nuclear unavailability persists for several years (expected at least until 2026), French industrial electricity prices will remain higher than in countries like Germany that have rolled out renewable energy early. This could accelerate the relocation of energy-intensive industries to the United States and Northern Europe, undermining France's "reindustrialization" strategy.

2. Consumer Market and Inflationary Pressure

Soaring household electricity bills directly squeeze real purchasing power. Although the French government implemented price protection measures, the fiscal burden is heavy, and the intervention distorts price signals, delaying energy-saving behavior. In 2023-2024, the energy contribution to inflation in France remained persistently high, closely linked to the country's unique electricity structure.

3.### 3. Uncertainty in Nuclear Power Investment

The causal framework proposed in this study can be used to assess the value of future nuclear power investments. France plans to build six new EPR2 reactors, but this research shows that the risk of simultaneous outages at large nuclear plants may be far greater than expected. If climate change leads to more frequent cooling water shortages in the future, fluctuations in nuclear power availability will become the norm. Investors and regulators need to reassess the 'baseload' reliability and economics of nuclear power.

European and Global Implications: France from Power Exporter to 'Net Import Dependent'

France was once Europe's largest net exporter of electricity, providing stable low-carbon power to neighboring countries. However, after 2022, France's net electricity exports turned to zero or even negative. This shift has significant implications for the European energy market:

• Weakening France's voice in the European electricity market: France can no longer use cheap nuclear power to suppress European gas prices; instead, it becomes a driver of electricity purchase prices.
• Accelerating European renewable energy interconnection: France is forced to import electricity from allies like Spain that rely on solar and wind, prompting France to participate more actively in European grid integration.
• Implications for EU carbon market and electricity pricing mechanism reform: France's experience demonstrates the amplifying effect of marginal pricing mechanisms in extreme situations, pushing the EU to consider policy adjustments such as 'nuclear capacity compensation' or 'differentiated electricity prices'.

Long-term Trend Judgment: France's Energy Transition at a Crossroads

From a longer-term perspective, France faces two key choices:

1. Nuclear path vs. renewable energy path: The aging of existing nuclear plants is inevitable, and new nuclear construction is lengthy and costly. If France does not accelerate the deployment of wind, solar, and storage, it may face repeated nuclear availability crises in the next decade, and electricity price volatility will become the norm. Conversely, if France accelerates the integration of renewable energy, it can reduce dependence on a single technology.

2. Electricity market reform: France's current 'ARENH' (regulated nuclear electricity price) mechanism exposed design flaws during the crisis. In the future, it may shift to a more flexible market design, such as introducing long-term nuclear contracts to lock in prices, or capacity payments for existing nuclear plants to incentivize improved availability.

3. Industrial policy orientation: If France cannot provide competitive and stable electricity prices, will the EU Carbon Border Adjustment Mechanism (CBAM) instead protect France's high-carbon products? In fact, the competitiveness of France's energy-intensive products lies in their low carbon footprint, but if electricity prices are too high, they may be replaced by other low-carbon regions (such as the United States). Therefore, France needs to find a new balance between energy costs and decarbonization commitments.

Conclusion: Economic Structural Signals Beyond the Crisis ItselfThe 2022 French electricity price crisis was not an isolated incident, but a microcosm of France's nuclear energy dependency model under the impacts of climate change and geopolitical shocks. It demonstrates that the energy foundation of the French economy—once regarded as a symbol of independence and low carbon—has exposed systemic vulnerabilities. Over the next decade, whether France can reshape its energy system will determine its manufacturing competitiveness, consumer welfare, and position in the European electricity market. This causal study provides a scientific framework for understanding this change, and its economic impacts will persist throughout the entire energy transition period.