Technology innovation and business models in France's new energy industry

The transition has left the laboratory

This session, delivered on 4 November 2025 for the Silk Road Business School, deals with a change of nature: the French energy transition is no longer a research and development subject, it is an industrialisation subject.

The national framework imposes a documented structural pivot: moving from around 60% imported fossil energy in 2023 to 60% low-carbon energy in 2030. Sector targets translate that pivot into volumes. Solar PV: around 22.6 GW installed at the first quarter of 2025 against a target of 54 to 60 GW in 2030 and 75 to 100 GW in 2035. Offshore wind: around 1.5 GW in service or being commissioned at the end of 2025, against 18 GW targeted for 2035. Hydrogen: 6.5 to 8 GW of electrolysis by 2035.

Renewables: where innovation still happens

In sectors considered mature, innovation has moved to two fronts.

The engineering front, with floating offshore wind, where Provence Grand Large is the French demonstrator. The materials front, with perovskite-silicon tandem cells, which promise around 20% additional energy compared with silicon alone and which Europe sees as its opportunity to reshore solar PV manufacturing.

On the business model side, maturity shows in the generalisation of corporate power purchase agreements between producers and large consumers. That mechanism moves price risk from the public support scheme to a long-term bilateral contract, and changes the project's financing profile.

Green hydrogen: the gigafactory bet

Hydrogen is the textbook case of industrialisation. The issue is not producing a molecule, it is mastering series production of electrolysers. The Franco-German axis illustrates this, with the Berlin gigafactory arising from the Air Liquide-Siemens tie-up, supplying PEM technology at a rate of 3 GW per year for large projects.

The associated business model is the industrial hub. The Seine valley case, with the Normand'Hy project, works as business-to-business decarbonisation sold as a service: the producer carries a massive investment, neighbouring industrial users buy a molecule contracted over a long period.

Smart grids: monetising flexibility

The mass integration of intermittent renewables makes flexibility a defensive prerequisite before it becomes an opportunity. Three models are taking shape: standardisation of interfaces and metering, deployment of local flexibility markets on the Enedis side, and the potential disruption of vehicle-to-grid, which turns an electric fleet into distributed storage capacity.

Four bottlenecks

Capital is not the problem: French greentech raised around €2.2 billion in 2025, and the European Investment Bank committed €28 billion in 2024. Public capital does effectively catalyse private capital.

The other three bottlenecks are tighter. Administrative complexity is the most frequently cited brake, with processes judged too slow that weigh above all on hydrogen projects. Dependence on critical materials, up to 100% for some rare earths used in wind turbines, changes the return calculation and introduces geopolitical risk into the business plan. Finally skills: France alone has to train in the order of 760,000 people by 2030 for industry and energy, with a structural shortage of qualified technicians.

The Northvolt filter

The failure of Northvolt, after more than $15 billion raised, served as the central case. The cause was neither technological nor financial: it was an industrial execution failure, with a plant running at around 5% of its capacity and cash burn in the order of $100 million per month.

The lesson transfers directly to how a case should be assessed. In the new energy industry, operational excellence is worth more than technological innovation. A project whose ramp-up is not demonstrated is an unfunded project, whatever the quality of the technology.

Conversely, players such as Lhyfe illustrate project-by-project growth, with revenue multiplied by four in 2024, which reduces risk compared with a centralised mega-plant. Stegra attacks steelmaking, around 7% of global emissions, by substituting green hydrogen for coal in a direct reduction process.

Key success factors and expected consolidation

Three armies are competing for the same intermittency: electron producers, molecule producers and flexibility integrators. Their common key success factor is the Northvolt filter, that is, the ability to hold an industrial production rate.

The most likely outlook is consolidation driven by the large utilities, which have strong balance sheets and corporate investment vehicles, with developers mastering grid-scale storage integration as the preferred target.