End of Regulated Energy Tariff in France: Impact on Metal Casting Industry

Abstract 1. Introduction: France, it is the third largest automotive producer next to Germany and Spain in with an annual output of about 3 million vehicles as an average. The main drivers for growth in automotive sales in 2014 are expected to be high discounts, cheap financing, government-subsidized schemes for buying new cars and a number of new models. The federal government of France is weighing up over the introduction of new policies for helping the automobile industry in the country. The government is not only aiming to help the local automobile companies but also aims to help foreign companies to invest in the country. 2. Main: From 2016, the Yellow and Green Tariffs for regulated industrial and commercial consumers will be removed. This would result in almost doubling of share of buying from open market from 31% to 60%. This is good news for major energy consuming industries such as metal casting industry, as it would clearly give a price advantage of 15-20 EUR/MWh to commercial and large consumers. With increased government measures and subsidized schemes, the French automotive industry is estimated to show a steady growth, especially with the passenger car segment in years to come. Issues on the energy procurement related factors for metal casting foundry to facilitate domestic supply of castings and cost savings with regard to French automotive OEM have been dealt in detail.