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France

France

French PPA move could free up onshore financing

FRANCE: A new contract announced by the environment minister allowing developers to anticipate the signing of the power purchase agreement (PPA) with state utility EDF should help unlock financing for many onshore wind power projects in France, the industry believes.

The move could unfreeze projects totalling up to 1.6GW, according to estimates by French wind energy association FEE. Until now, a PPA could only be signed when the connection was operational, with meters in place and a contract for grid access signed.

The problem dates back to last spring, when the onshore tariff was attacked by an anti-wind group on the grounds that the government had not previously notified the European Commission.

The case was referred to the European Court of Justice, which is not expected to reach a decision until after the summer. In the meantime, bank lending has effectively dried up, despite repeated government reassurances that the existing tariff remains in force and that it will guarantee contracts signed with EDF.

Reasons for optimism

The announcement follows last month's passage of a law to simplify the rules governing the installation of turbines on the mainland and in overseas territories.

The measures include scrapping the wind power development zones (ZDEs). Until now, turbines had to be located in these areas to qualify for guaranteed power-purchase prices, but they were also vulnerable to legal challenges.

According to FEE, this is the first time in ten years that the regulations have been simplified.

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