Electrification is a key driver of industrial revival

Is a relentless rise in energy costs inevitable? This was the question at the centre of a highly anticipated round table on Saturday, bringing together leading figures from the energy industry. The recent blockade of the Strait of Hormuz has reminded us that security of supply and energy prices are critical to the functioning and competitiveness of our economies.

La Lettre des Rencontres went further with an exclusive interview with EDF’s Chairman and CEO.

Europe’s energy mix remains more than 60% dependent on imported fossil fuels, and the blockade of the Strait of Hormuz has highlighted the vulnerability of energy supplies. To what extent is Europe currently exposed to external energy shocks? How quickly can this dependency realistically be reduced?

Bernard Fontana : Recent geopolitical crises have reminded us that energy is a key issue for competitiveness, sovereignty, and climate action. Europe remains exposed to external energy shocks because it still imports a significant share of its fossil fuels, but also because certain strategic technologies and supply chains remain dependent on external sources.

The answer lies in building an energy system that relies more heavily on our greatest asset: electricity.

This requires accelerating the electrification of energy uses on the one hand, and strengthening the capacity of the electricity system to produce reliable, competitive, and low-carbon electricity on the other.

This means making the right investments, as a priority: for customers, investing in electric solutions that encourage the transition towards electrification; on the supply side, extending and increasing the capacity of the existing nuclear fleet, investing in adapting our electricity generation facilities to climate change, preparing for the renewal of the fleet by launching the construction of new nuclear reactors, and restarting investment in hydropower.

Other renewable energy sources, which are intermittent, can provide additional support. Their development must be aligned with changes in electricity demand and the actual needs of the energy system.

This strategy strengthens our sovereignty on several levels: it reduces our dependence on imported hydrocarbons, supports industrial sectors across our regions, enhances technologies for which we control the design and intellectual property, and provides households and businesses with energy that is more stable and competitive.

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Can we speak of a structural rise in energy prices, or are we still dealing with cyclical crises?

B. F.: We can avoid a structural increase if we make the right investments and control their costs. Today, Europe remains heavily dependent on imported fossil fuels, exposing our economies to volatility in global markets and geopolitical crises. For France, this dependence has cost between €50 billion and €120 billion per year in recent years. The challenge is therefore to redirect this massive expenditure towards investments in a competitive, sovereign, low-carbon energy system based on electricity. These investments must first focus on electrifying energy uses. Switching transport (electric vehicles), buildings (heat pumps), and industry to electricity helps reduce energy bills. An electric vehicle, for example, costs up to three times less to run than a combustion-engine vehicle. These transitions are not only beneficial for decarbonisation; they are already economically advantageous for both the energy system and households, significantly reducing operating costs and increasing resilience against external shocks. EDF is actively supporting 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.

By adopting this strategy of electrification and strengthening our electricity system, our simulations show that the total cost of Europe’s energy system can decrease by 2040 and 2050 (as a share of GDP), while meeting climate objectives and increasing sovereignty.

With this approach, energy will become more stable and far less dependent on external shocks: if fossil fuel prices were to double, the total cost of energy would increase by only 6%, compared with 30% under the current system.

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

B. F.: The growth 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 a risk of shortages. France has the capacity to absorb this growth. Moreover, the increase in electricity demand goes hand in hand with a major reduction in demand for hydrocarbons. This is what makes this dynamic so positive for energy competitiveness, benefiting all consumers.

France has a unique advantage: its electricity.

It is competitive. It is also sovereign because it is produced domestically. Finally, our electricity is low-carbon: nearly 95% of our energy mix comes from nuclear power, hydropower, and renewable energy. Our electricity supply is also abundant. In 2025, France exported 92 TWh of electricity, equivalent to the annual consumption of a country such as Belgium. Our conviction is simple: rising electricity demand is not a problem to endure. It is an opportunity to seize. Electricity is one of the major levers for France’s reindustrialisation, competitiveness, and 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 system desirable, and what should its priorities be?

B. F.: Energy policy remains a national responsibility, but this does not prevent European coordination which must benefit each and every member state. Being electrically interconnected with our neighbours strengthens security of supply through diversification and improves our trade balance: France exported 92 TWh of electricity in 2025, generating more than €5 billion in revenue for the country. The electricity mixes of European countries are highly diverse. They can complement one another to the benefit of all member states, just as the different assets within an electricity system complement each other.

However, these complementarities can only function if certain requirements are respected. In particular, we must recognise the true value that different assets bring to the European electricity system. Dispatchable generation capacity, such as nuclear and hydropower, provides an essential service by ensuring grid stability, notably through the inertia they provide. These sources contribute around 40% of the European electricity system’s stability needs. This contribution must be recognised.