Implications of the New French Government for European Energy and Tech Sectors

The new French government, under Prime Minister François Bayrou, has embarked on a strategic reorientation of its energy and digital policies, with profound implications for European markets. By prioritizing nuclear energy, selective renewable expansion, and digital sovereignty, France is reshaping its economic and environmental trajectory. These shifts not only reflect domestic imperatives but also signal a recalibration of its role within the European Union's broader climate and technological ambitions.

Energy Policy: A Nuclear Renaissance and Renewable Pragmatism

France's third Multiannual Energy Programming (PPE3) for 2025–2035 underscores a dual focus on nuclear energy and a measured approach to renewables. The plan aims to reduce fossil fuel use from 60% of final energy consumption in 2023 to 30% by 2035, while increasing low-carbon electricity generation to 39% and non-electric renewables to 30%, according to the France 2025 Digital Decade Country Report. Central to this strategy is the construction of over 14 new nuclear reactors, a move that aligns with the government's goal of reducing energy imports and enhancing grid stability.

However, the path is not without challenges. Despite growing renewable energy production-green energy accounted for 22% of France's gross final energy consumption in 2023-integration bottlenecks persist. A Connexion France article notes that 10% of solar and wind energy was wasted in 2025 due to grid limitations, leading to negative electricity prices during peak production hours. To address this, the government has allocated €500 million for battery storage infrastructure over 15 years, a critical investment to balance supply and demand.

The PPE3 also emphasizes offshore wind, with three new installations completed in 2025 and a target of 40 gigawatts by 2050, as noted in a French Network post. Yet, EU Energy Commissioner Kadri Simson has urged France to raise its renewable energy ambition to 44% of gross final consumption by 2030, as highlighted in the France 2025 Digital Decade Country Report.

Digital Infrastructure: Sovereignty, Innovation, and SME Gaps

France's digital strategy, outlined in the 2025 Digital Decade Country Report, positions the country as a leader in AI, green ICT, and semiconductors. With €18.6 billion allocated to digital transformation-€11.1 billion from public budgets-the government is prioritizing sovereign solutions, including open-source software and cloud infrastructure. The "France 2030" initiative, with €54 billion in investments, further targets AI, green technologies, and semiconductors, sectors where France has already seen robust growth: cloud computing expanded by 17.5% in 2024, and big data by 18%, according to a Flint Global outlook.

Despite these strides, challenges remain. The digitalization of small and medium enterprises (SMEs) lags, prompting policy recommendations to enhance skills training and financial support, as noted in the France 2025 Digital Decade Country Report. Additionally, regulatory hurdles for data centers-such as environmental and urban planning requirements-pose risks to sustained investment, even as the country's carbon-free electricity remains a competitive advantage, a point emphasized by a Clean Energy Wire guide.

Investment Opportunities and Strategic Risks

The new French government's policies create both opportunities and risks for investors. In the energy sector, the nuclear revival offers long-term stability for firms involved in reactor construction, uranium supply, and grid modernization. The €5.6 billion in public funding for industrial decarbonization and €9 billion for renewable and hydrogen projects, according to the Flint Global outlook, also incentivize private-sector participation in green hydrogen and battery storage.

In digital infrastructure, the focus on AI and semiconductors aligns with global trends, offering opportunities for startups and established players in France's tech ecosystem. The government's green industry investment tax credit (C3IV) and public procurement policies further support innovation, as noted in the Clean Energy Wire guide. However, investors must navigate the SME digitalization gap and regulatory complexities, particularly in data center development.

Conclusion: Balancing Ambition and Pragmatism

France's strategic reorientation in energy and digital infrastructure reflects a delicate balancing act between national sovereignty and European integration. While the government's emphasis on nuclear energy and selective renewables may diverge from EU-wide renewable targets, its investments in grid stability and storage address critical systemic risks. Similarly, the push for digital sovereignty in AI and semiconductors positions France to compete globally but requires overcoming domestic bottlenecks.

For European investors, the key lies in aligning with policy-driven growth areas-nuclear energy, battery storage, AI, and sovereign cloud-while remaining vigilant to regulatory and integration challenges. As France navigates this complex landscape, its policies will likely serve as a bellwether for the continent's broader energy and tech transitions.