Energy cooperation

"The initiatives for Europe must come from Germany and France…we have to cooperate economically and socially," French President Francois Hollande said in his New Year's press conference on Tuesday (14.01.2014).

While the focus of his speech was on comprehensive economic reform and hefty welfare cuts - seen by many as an about-face for a socialist president - Hollande also announced he would like to strengthen French-German energy cooperation, with a joint energy company similar to European aviation and defense firm Airbus.

"Germany has a head-start in renewables, but we have our vanguard in energy storage and power grids," he said. "We have to work together to expand new industrial branches. We are very proud of Airbus, now we want joint action for the energy transition."

In a statement sent to DW by email, the German Economy and Energy Ministry emphasized the importance of coordinating the energy transition with France. "We welcome the initiative for stronger cooperation by French President Francois Hollande. We're open to talk about the proposals and the details in the coming weeks and months," it reads.

The German Association of Energy and Water Industries did not comment when contacted by DW.

Hollande did not elaborate on his idea and the announcement did come as a surprise - and an idea that's unlikely to see the light of day, as France and Germany face different problems and have different mindsets when it comes to managing energy and utilities.

Poles apart

"The idea of having a common 'enterprise' [company] seems like a very French idea, in Germany you would never talk about a state enterprise for such a project," said Severin Fischer, who specializes in EU energy policy at the German Institute for International and Security Affairs (SWP) and has also worked for the environment committee in the European parliament.

He pointed out that, while in France there is usually one unique, state-owned actor, in Germany the renewable energies law encouraged many smaller, private players to set up shop.

Add to that a stark difference in the two countries' energy mix and one might see how a common energy firm, unlike Airbus, may never get off the ground. France still relies heavily on nuclear energy, but unlike Germany, uses virtually no energy from coal. And it has a far less ambitious target on reducing atomic sources than neighbor Germany, which has vowed to phase out nuclear energy altogether.

Hollande's idea was taken with a pinch of salt in the French press too, with Le Monde also pointing to the fact that, unlike in France, the German market involves so many different corporate players.

Business daily Les Echos added that the idea of a French-German energy company is part of a wider cooperation with Berlin. But the paper says it is also a timely announcement, meant to position Hollande's Parti Socialiste as an alternative to right-wing parties ahead of the European elections this spring. France's conservative parties are expected to take a considerable share of the vote.

Focus on EU targets

Hollande's idea is not new - there are already initiatives to coordinate the green energy transition between the two countries.

The French-German Office for Renewable Energies, based in Berlin and Paris, for instance, was set up specifically for that purpose. Its members are industry bodies as well as companies and government ministries.

The initiative's spokesman had no immediate comment on Hollande's proposal when contacted by DW, but Fischer said the office, like other Franco-German initiatives, yield few results as "the national targets are not compatible."

He believes the Germans will not stand for a joint energy company. Instead Fischer argues the two countries should focus on coordinating the EU's energy strategy post-2020.

"On January 22, the EU Commission will put out a proposal on what future EU targets for 2030 could look like. So far, we've had a three-target approach, with climate protection, renewables and with energy efficiency. That was a German-French proposal, I would argue."

There is fierce resistance to this approach from the UK and Poland and even from the Commission itself, so Fischer believes it's up to France and Germany to work together to push through these targets.

"It might be easier to find a common position on this than on the way the two countries would like to structure their energy transition," he told DW.

A joint cabinet meeting scheduled for February 19 is likely to reveal more on the issue of energy cooperation between France and Germany.