Electrification Is a Key Driver of Industrial Renewal

Is the cost of energy destined to rise inexorably? That was the central question addressed during Saturday’s highly anticipated panel discussion featuring leading executives from the energy sector. As the disruption of shipping through the Strait of Hormuz once again highlights the critical importance of energy security and affordable prices for the functioning and competitiveness of our economies, La Lettre des Rencontres sat down with EDF Chairman and Chief Executive Officer Bernard Fontana for an exclusive interview.

Europe’s energy mix is still more than 60% dependent on imported fossil fuels, and the disruption in the Strait of Hormuz has once again exposed the vulnerability of supply chains. How exposed is Europe today to external energy shocks, and how quickly can this dependence realistically be reduced?

Recent geopolitical crises have reminded us that energy is fundamentally an issue of competitiveness, sovereignty, and climate policy.
Europe remains vulnerable to external energy shocks because it still imports a significant share of its fossil fuels. It is also dependent on foreign suppliers for certain strategic technologies and supply chains.

The solution is to build an energy system that relies far more heavily on our greatest asset: electricity.
This requires accelerating the electrification of end uses while simultaneously strengthening the power system’s ability to deliver reliable, competitive, and low-carbon electricity.
That means making the right investments—and making them a priority.
On the demand side, we must support consumers by expanding electric solutions that facilitate the transition away from fossil fuels. On the supply side, we must extend the operating life and increase the output of the existing nuclear fleet, invest in adapting our power generation assets to climate change, prepare for their renewal by launching the construction of new nuclear reactors, and revive investment in hydropower.
Other renewable energy sources, whose production is inherently intermittent, also have an important role to play. However, their deployment must remain aligned with future electricity demand and with the overall needs of the power system.

This strategy strengthens our sovereignty on several fronts. It reduces our dependence on imported hydrocarbons, supports domestic industrial sectors across our regions, capitalizes on technologies that we own and control, and ultimately provides households and businesses with a more stable and competitive source of energy.

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Can we speak of a structural increase in energy prices, or are we still dealing with cyclical fluctuations driven by successive crises?

B. F.: We can avoid a structural rise in energy costs—provided we make the right investments and keep those investments under control.
Today, Europe remains heavily dependent on imported fossil fuels, exposing our economies to the volatility of global commodity markets and geopolitical instability.
For France alone, this dependence has cost between €50 billion and €120 billion every year in recent years.
The challenge, therefore, is to redirect these massive expenditures toward investment in a competitive, sovereign, and low-carbon energy system built around electricity.

These investments begin with the electrification of energy use.
Replacing internal combustion vehicles with electric vehicles, installing heat pumps in buildings, and electrifying industrial processes all contribute to reducing overall energy costs.
An electric vehicle, for example, can cost up to three times less to operate than a conventional petrol or diesel vehicle.
These transitions are not only essential for decarbonization; they are already economically beneficial for both the energy system and consumers. They significantly reduce operating costs while increasing our resilience to future external shocks.
EDF actively supports this transition by offering comprehensive solutions and tailored services to its customers.

Electrification is often presented as the solution. But can it, on its own, contain rising energy costs?

B. F.: Electrification is an essential condition for controlling energy costs—but it is not sufficient on its own.
Its effectiveness depends on making the right investments, both in electrifying end uses and in strengthening the resilience of the electricity system itself, while ensuring that these investments remain cost-effective.
At EDF, we are convinced that electricity is the most powerful lever for reconciling competitiveness, energy sovereignty, and decarbonization.
The objective is to redirect the tens of billions of euros currently spent every year on imported fossil fuels toward investment in domestic assets with low long-term operating costs.

Large-scale electrification of transport through electric vehicles, buildings through heat pumps, and selected industrial processes generates substantial energy-efficiency gains, reducing overall energy consumption by factors of two to three.
At the same time, it is essential to invest in electricity generation and grid infrastructure to guarantee both the reliability and the competitiveness of the system.

Our modelling shows that by pursuing this strategy of electrification while reinforcing Europe’s electricity system, the total cost of the European energy system—expressed as a share of GDP—could decline by 2040 and again by 2050, while simultaneously achieving climate objectives and strengthening European sovereignty.
Under such a scenario, energy would become considerably more stable and far less vulnerable to external shocks.
For example, if global fossil fuel prices were to double, the total cost of energy would increase by only 6%, compared with 30% under today’s energy system.

Does the rise of electric vehicles, artificial intelligence, and data centres represent a new electricity demand shock?

B. F.: The rapid expansion of electric vehicles, artificial intelligence, and data centres will inevitably lead to a significant increase in electricity demand. However, I would not describe this as a demand shock in the sense of creating a risk of shortages.
France has the capacity to absorb this growth. Moreover, rising electricity demand goes hand in hand with a substantial decline in hydrocarbon consumption. This is precisely what makes the transition so beneficial for the competitiveness of our energy system—and ultimately for all consumers.

France enjoys a unique advantage: its electricity.
It is competitive. It is also sovereign, because it is produced domestically. And it is largely decarbonized: nearly 95% of our electricity mix comes from nuclear power, hydropower, and renewable energy sources.
Our electricity is also abundant. In 2025, France exported 92 TWh of electricity—equivalent to the annual electricity consumption of a country such as Belgium.

Our conviction is straightforward: rising electricity demand is not a problem to be endured it is an opportunity to seize.
Electricity is one of the most powerful drivers of France’s reindustrialization, competitiveness, and energy sovereignty.

In this uncertain environment, how is EDF contributing to the transformation of the energy system?

B. F.: EDF is acting simultaneously on two fronts: supporting the electrification of end uses while producing the electricity required to power that transformation.
Our first priority is to help consumers electrify their energy consumption.

In the building sector, we are accelerating the deployment of heat pumps, which contribute both to decarbonization and to adapting buildings to climate change.

In transport, we are developing electric mobility solutions and smart charging technologies that optimize electricity consumption while reducing costs for users.

In industry, electrification is a key driver of reindustrialization.
We help industrial companies benefit from the competitiveness of French electricity through new long-term electricity supply contracts that provide the visibility needed to support investment decisions.
The results speak for themselves: one company in three signed one of these new four- or five-year contracts in 2025.
For our largest customers—most of them highly electricity-intensive industries—we also offer long-term partnerships lasting ten years or more, representing around 20 TWh of electricity annually, equivalent to roughly half of the consumption of France’s electro-intensive industrial sector.

We are going even further by supporting the direct electrification of industrial processes.
This is the objective of the partnership we are currently finalizing with the Technical Centre for Mechanical Industries (Cetim). The initiative will help SMEs and mid-sized industrial companies electrify their production processes by combining technical expertise EDF’s R&D teams have worked alongside Cetim for many years with funding for demonstration projects and access to public support mechanisms.
Initially, we are focusing on several strategic areas of the metallurgy industry, including forging, foundries, heat treatment, and surface treatment, before scaling up these solutions once they have been successfully demonstrated.

At the same time, we continue investing in the generation assets needed to support the electricity system: increasing the output and extending the lifetime of the existing nuclear fleet under the strictest safety standards; constructing new reactors through the EPR2 and SMR programmes; and investing in hydropower, which also provides essential flexibility for the electricity system.
Other renewable energy sources, together with energy storage technologies, will complement the electricity mix according to future demand and the system’s operational requirements.

Is a European Energy Union desirable, and if so, what should its priorities be?

B. F.: Energy policy remains a national responsibility, but that in no way precludes European coordination—provided it benefits every Member State.
Electrical interconnections with our neighbouring countries strengthen security of supply through diversification while also improving France’s trade balance. In 2025, France exported 92 TWh of electricity, generating more than €5 billion in export revenues.

The electricity mixes of European countries differ considerably, and this diversity should be viewed as a strength. They can complement one another, just as the various assets within the electricity system perform complementary functions.
However, these complementarities can only deliver their full value if certain principles are respected.
Most importantly, the genuine contribution made by each type of generation asset to the European electricity system must be properly recognised.
Dispatchable generation technologies—particularly nuclear power and hydropower—provide an essential service by ensuring grid stability, notably through the inertia they contribute to the system.
Together, they account for around 40% of the European power system’s stability requirements.
That contribution deserves to be fully recognised.