Over the past few years there has been an increased interest for sustainable development and green building programs. Every year since 2001, a full week has been dedicated to promoting sustainable development and educating the public on environmental issues and solutions. Consensus around a need for change has steadily been growing culminating in a strong public opinion favoring government action.
In response, the French Grenelle Environment Policy, developed in October 2007, created a long-term policy plan for tackling environmental issues and promoting sustainable development. Grenelle established the use of renewable energy and green building construction as a priority for France. The Grenelle Environment Policy found that reducing residential and commercial buildings energy consumption must be a priority for environmental policy because they are the biggest energy consumers in France. Grenelle’s goals are to make all new buildings consume less than 50 kWk/m2/year by 2012 and become energy neutral or positive by 2020.This includes a 20% reduction in energy consumption by commercial buildings and a 12% reduction in residential buildings within the next 5 years. The report found that energy use in new houses is increasing by 250 kWk/m2/year. But Grenelle proposes that by 2010, all new homes will have to consume less than 50 kWk/m2/year.
In response to Grenelle, the Ministry of Environment has set aside 350 million euros (555.45 million dollars) to finance new government construction ensuring that at least half meets “Green” Standards by the end of 2008. To promote the development of the renewable energy and green building industry, the French government has implemented tax incentives. For example high energetic performance buildings built before the 31st of December 2009, could be exonerated of real estate taxes for 30 years. Other tax incentives include tax credits (from 15% to 50% of total cost, max 12,000 dollars) for renewable energy equipment, energy efficient heating systems, heating pumps, heating system regulators, and insulation materials. The French public’s interest in renewable energy is growing: 8 out of 10 French households say “they are ready to invest in renewable energy if they had to change their heating system.” Many government officials and experts see the 3.5 billion square meters of heated space in France (1.78 billion m2 in individual houses, 884 million in government buildings, and 850 million in commercial real estate) as the biggest opportunity for energy savings. Studies have found that the average energy consumption in France is 240 kWh per square meter per year, four times the goal set by Grenelle for 2010. The government has been leading the reforms by improving the thermal efficiency of government housing projects (HLM in France) currently estimated at 170 kWh/ m2 /year.
Market Expansion & Best Prospects
Between 2000 and 2007, almost 2 million individual private homes and 1.2 million residential buildings were built in France. Industry experts believe that over 31 million private housing (homes and residential) need to be renovated in order to improve their energy and thermal efficiency, representing a market of 600 billions euros (952.05 billions dollars). About 85% of French homes were built before 1975 and are environmentally inefficient. These homes need renovation with new insulation materials, windows, heating systems, etc.
According to the French Building Federation the French building industry accounted for 117 billions euros (185.65 billions dollars) in 2006.
Although the proportion of green building is currently small, industry experts predict that most new construction and renovation projects would be either “green” or HQE (Haute Qualité Environnementale) certified. The HQE label is the French equivalent of the American LEED certification. The French government is leading the way; almost 90% of green buildings built in 2006 were public constructions.
There are currently 150 HQE certified buildings, and over 450 projects are going through the certification process. There is an increasing demand for low energy, compact and multifunctional systems/equipment in areas such as, heating, ventilation, air conditioning, lighting. Similarly, technical equipment for building such as control or diagnostic systems (maintenance book etc.) as well as management tools to regulate energy sources will be in demand.
Therefore, American companies providing products or equipments with a competitive advantage in terms of technology, energy savings, or price will find good opportunities in the following sectors:
• Heating Ventilation and Air Conditioning (HVAC):
- The French heating pump market is the second largest in Europe.
- 2007 saw a 30% growth for France’s heating pump market with a total of 69,000 new units.
- The French solar-thermal market is the fastest growing in Europe with growth of 131% from 2005- 2006. In 2006, 35,000 solar water heaters and 5,000 combined solar systems were sold.
- The goal for 2010 is to sell 200,000 solar water heaters and 50,000 solar roofs per year. Photovoltaic (PV):
- The PV market is widely perceived as the market with the most potential in France.
- The French Solar photovoltaic market is the 4th largest in Europe according to Eurobserv’er.
- In 2007, the PV market had a total capacity of 45MW. In 2006, it was only 33MW. The market is growing and PV technologies are improving very fast.
- Equipments with specific energy saving features, such as heat exchangers are starting to be in demand.
Wood Energy Equipment:
- France is Europe’s leading producer of energy from wood according to Eurobserv'er.
- In 2006, 3.4% of all energies consumed in France were wood energy. Almost 80% was household consumption. As a result in 2007, there was an increase in sales of wood boilers reaching 500,000 units sold.
• Insulation Materials & Glass and Window:
- The French government adopted large tax incentives for insulation in 2005 boosting the renovation market for windows for example. Recent Grenelle policy estimated that 50 million windows needed to be replaced in order to increase energy savings and achieve lower emissions goals.
- More buildings or houses are using “green” materials as such: cork, hemp, hool, insulation products made out of recycle paper or textiles. Products such as windows that can either significantly reduce the energy consumption or produce energy are good prospects.
• Architectural services:
- American architects with environmental expertise may also find opportunities. Recently a New York City-based firm was selected to design Tour Carpe Diem, a new office tower. The 35-story, 45,000-square-meter (485,000-square-foot) building is another step forward in the evolution of La Défense (Paris’ business district) toward pedestrian-friendly urbanism and environmentally responsible architecture.
• Building Industry: France is home to a few world leaders in the construction and building materials industry, such as Bouygues Construction (group’s revenues 07: 29.6 billion euros - 46.01 billion dollars), Vinci Construction (revenues 06: 25.6 billion euros – 39.67 billion dollars), Eiffage (revenues: 10 billion euros– 15.87 billion dollars), St Gobain (revenues: 43 billion euros – 68.25 billion dollars), Lafarge (revenues 17 billion euros
– 26.98 billion dollars). These companies do 48% of their business in the EU and 52% internationally.
They are all moving towards “green building” for their programs or products. For example in 2007 Bouygues broke ground on a 160,000 sq. meter commercial real estate project using HQE in a Paris suburb. They also recently secured a 300 million euro (476.15 millions dollars) contract to expand and convert the CB31 Tower in La Défense into an HQE building. Bouygues will also build one of the first positive energy building in France in Lille in the North of France. The building should be completed in 2011.
Likewise, St Gobain has developed a “passive solar heat gain” line of glass that allows heat savings.
Other companies are also developing innovative glass that combines high insulation and energy production to supply hot water for the boilers.
• Energy Industry
The French energy industry represented 2.5% of GDP and 5% of investment. The French energy consumption in 2006 was 273,230,000-ton oil equivalent.
By Rose-Marie Faria