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France

France

Regulatory progress but project permits slow -- Off the French coast

Significant progress was achieved last year in clarifying various financial and administrative issues concerning offshore wind in France, but project news was mixed, with a major setback at the end of the year. Most importantly, the unpopular competitive tender system for allocating power purchase contracts was replaced with a fixed purchase price for offshore wind production of EUR 0.13/kWh for the first ten years. The rate varies over the next ten years between EUR 0.03/kWh for plant operating for an average of 3900 hours or more a year and EUR 0.13/kWh for 2800 hours or less. The rates are linked to inflation.

On the whole, the industry considers the tariff acceptable for large, well-designed projects on good sites, at depths of less than 25 metres, but says the rate of decrease is too steep. "We need the authorities to be supportive and to fulfil their obligations in a timely fashion," argues Marc Delacroix of Shell, which is developing 120 MW off Dunkirk in partnership with Total.

It seems increasingly likely that projects will have to be built in a defined maritime wind power zone to benefit from the fixed purchase price. These zones will be proposed by local authorities and approved by the relevant maritime prefect. Developers will then have to apply for a siting permit. The government is preparing a circular to prefects clarifying the administrative details. Further regulation on offshore siting may also be required, such as a ruling on how to define communal boundaries at sea. The industry points out that these questions must be resolved urgently if France is to get anywhere near the government's new target of 1000 MW installed offshore capacity by 2010 and 5000 MW by 2015.

Once the turbines are spinning, operators will pay an annual business tax currently set at EUR 12,000 per megawatt. Half the sum will be paid into a fund for supporting fishing and maritime tourism and the rest divided among the communes, though how that will happen has yet to be decided. Establishing the tax is "a major advance," says Jean-Marc Armitano of Eole-RES, the French subsidiary of Britain's Renewable Energy Systems. Local communes are likely to be more supportive of projects if they benefit directly from the revenue, he argues.

Jean-Michel Germa of La Compagnie du Vent, a pioneering French developer and owner-operator now jointly owned by Spain's Acciona, has his doubts about the persuasive effect of the tax. In November, a group of anti-wind campaigners demonstrated against it and various onshore projects (Windpower Monthly, December 2006), while in December, the prefect heading up the Seine-Maritime département rejected La Compagnie du Vent's application to proceed with a 702 MW project in the English Channel off the coast of Picardy and Haute-Normandie. The presence of a former World War II minefield was the justification for the rejection, though mine clearance is provided for in the proposal (Windpower Monthly, February 2007). The annual tax revenue for the département would have been EUR 8.5 million.

Not all the offshore project news is dismal. The 105 MW Veulettes-sur-Mer project being developed by Germany's Enertrag and Prokon Nord is making slow but steady progress. The only project to be retained under the previous tender process, it is also located in the English Channel, seven kilometres off the coast of the Seine-Maritime département. In this case, the prefect accepted the application for the rights to the site. Enertrag hopes to complete the permitting process by the autumn and to start the land-based works early next year, followed by offshore construction during the summer of 2008. All being well, the plant will come into operation early 2009.

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