Nuclear crisis abroad helps France's wind sector

FRANCE: After years of increasingly onerous regulations, life for France's wind industry could soon become easier. The shock waves from the meltdown at the Fukushima nuclear power plant are clearly evident in the country, which generates more than 75% of its electricity from nuclear reactors (see chart).

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Newspapers are suddenly full of articles questioning the country’s reliance on nuclear power. Before the Japanese earthquake they tended to criticise renewable energy — particularly wind — insisting that nuclear energy was cheap by comparison. Now calls for a fully informed debate examining all options are growing louder and more frequent. "What was dogma before is now an open question," says Nicolas Wolff, president of the French wind energy association, France Energie Eolienne.

While it is still early days, Wolff believes that in the medium term events at Fukushima will drive the market towards a greater share of renewables. "The government cannot avoid the discussion now," he says. Enhanced safety measures in the wake of the Japanese accident will inevitably increase the cost of nuclear, while unrelated statutory changes in France’s electricity market are also projected to push up the market price for nuclear power. Wind is expected to be the biggest beneficiary.

Guillaume Fagot, head of offshore projects at wind developer Enertrag France, agrees. "Fukushima will have deep repercussions in France," he says. As a result, the debate about nuclear power and its place in France’s energy mix should take a prominent place in the run-up to the presidential election in the spring of 2012.

Anecdotes from the trenches also suggest a shift towards wind. Developers report a more positive attitude among local representatives and a greater likelihood of the disadvantages of wind power being brushed aside. Marion Lettry, deputy commissioner for wind, hydro and maritime energies at renewable-energy trade association SER, says it is now easier to make the case for green energy. By the same token, she says, the anti-wind camp should find it more difficult to defend its position.

The power of nuclear

Given the importance of nuclear power in France, it is perhaps not surprising that rumours often arise about supposed ties between nuclear and the most active group opposing wind power, the Fédération Environnement Durable (FED). It is an accusation its president Jean-Louis Butré flatly denies. FED is "totally independent of any other commercial or industrial structure and has no position regarding nuclear power", he insists. "It receives no subsidies and is totally apolitical."

FED does, however, boast some very powerful friends, most notably former French president Valéry Giscard d’Estaing, who makes no bones about his hatred of wind turbines and support for nuclear power. Giscard d’Estaing wrote the foreword to Butré’s 2008 book L’imposture — or "The sham" — subtitled "Why wind power is a danger for France".

Giscard d’Estaing formed a steering committee in 2008, under the auspices of the FED, that lobbied on its behalf on a proposal for turbines over 50 metres tall to be classified as industrial plants presenting a serious danger or risk of pollution —a classification that made it into law. A raft of tough new rules governing the wind industry followed last year, including a minimum of five turbines per installation. This last stipulation alone rules out 10% of projects nationwide, says SER.

Nuclear state of mind

But rather than nuclear lobbyists working to keep wind in the background, industry observers point to far more banal obstacles to wind. One is that the nuclear industry simply has enormous clout in France. Since the birth of France’s nuclear programme in the late 1940s, it has enjoyed unconditional support at state level and across most of the political spectrum. This way of thinking is so ingrained among the nation’s technocrats that nuclear is seen as the only solution, Wolff explains. As a result, anyone supporting renewables — or raising concerns about nuclear power — is dismissed as anti-nuclear. The situation is further complicated by the presence of such economic heavyweights as state-run utility Electricité de France, nuclear giant Areva and multinational French conglomerate Alstom all wanting to sell their nuclear expertise abroad.

Despite these hurdles, France is now in fourth place in Europe in terms of installed wind capacity, adding more than 1GW a year over the past three years to reach nearly 6GW at the end of 2010.

Nevertheless, the country will miss its first indicative target of 10.5GW of onshore capacity and 1GW offshore in 2012, proposed in 2009 as part of the Grenelle process, a national summit to formulate government environment policy. Also in doubt is France’s binding EU target of 23% of electricity to come from renewables by 2020, requiring an estimated 25GW of wind capacity, including 6GW offshore. This will demand an annual build rate of more than 1.3GW onshore and 1.2GW offshore, assuming the first offshore facilities come online in 2015.

The big question is whether this rate can be achieved in the face of the recent tightening of regulations. The signs are not good. While the industry expects to install another 1GW this year — thanks to permits granted two or three years ago — it fears a marked slowdown in 2012. This is largely because the government has failed to aggressively enforce a wind mandate stipulated in the Grenelle II law of 2009. As a result, many regional authorities are reluctant to issue permits, even though required to do so by law. This has led to an effective moratorium, some developers argue.

More delays are caused by the fact that regional wind power plans that indicate where turbines can be installed are due by July 2012. In the meantime, "no one knows where to lodge an application for a permit, so the system is blocked," Wolff says. To make matters worse, the opposition is able to exploit these weaknesses in the regulations to slow down the permitting process.

Optimism offshore

For the moment, however, eyes are turned offshore as the industry gears up for the 3GW tender due to be launched by the end of this or early next month (see news story). Responding to the draft specifications put out for consultation in February, the industry was largely encouraged by what it read. Most agree that the terms are clear and consistent and show a sincere desire by government to get projects under way. "The state has drawn up a relatively exhaustive and well-prepared set of specifications," says Jérôme Jacquemin, country manager at GL Garrad Hassan, France.

There are signs too that the government has learned at least some lessons from the unsuccessful offshore tender of 2004 — which resulted in only one successful bid, for 105MW, that is still being held up in the premitting process. The government asks for more guarantees and makes provision for appeals by allowing for the contract start date to be pushed back if necessary, explains Enertrag’s Fagot. "This is very important for securing financing."

Overall, thanks to the financial guarantees, the number of detailed studies required and evidence of previous offshore experience, the tender should ensure serious candidates submitting serious bids, adds Brice Cousin, project manager at WPD Offshore France, a unit of German wind developer WPD. The idea is also to favour projects that have already reached a certain level of development.

The industry has a number of concerns about the draft specifications, however. Chief among these is the proposed power-purchase price ceiling of €150-160/MWh, depending on the zone. In some zones this could give an internal rate of return lower than for onshore projects, according to Frederic Lanoë, director of EDP Renováveis France, part of Energias de Portugal. By comparison, offshore projects commissioned in the UK this year will typically earn around €175/MWh, with stronger winds, shallower waters and generally easier sea-bed conditions than those in France.

The industry is also concerned that bids above the ceiling will automatically be eliminated. Given that the ceiling is so low, there is a risk that candidates bidding below it will not be able to finance their projects, warns Jean-Michel Germa, president of France Energie Eolienne’s offshore commission. He wants a bid bond introduced to ensure that winning candidates uphold their side of the contract, as is the norm in international tenders of this size.

Germa also wants some sort of financial guarantee from the government, should it withdraw the right to occupy the maritime domain for any reason. This will have a significant impact on the bankability of projects, he argues.

Tight squeeze

The wind industry also questions whether it is technically feasible to install the indicated capacities in the designated zones, especially that off St Nazaire in the west, which calls for 750MW in just 78 square kilometres. It is almost inevitable that the total actually built will be less than the 3GW under offer. Lanoë says it would make sense to increase the number or size of zones to accommodate a further 1–1.5GW. Not only would it increase the chances of meeting the target, but would also be more attractive to the industries the government is keen to see established in France.

Job creation and the development of an offshore industrial sector are key elements of the tender. The government wants France to become a leader in offshore marine energies and allow the creation of tens of thousands of permanent jobs. It is the first time in France a tender has contained this sort of industrial component.

However, whether 3GW is enough to attract the market is an open question, says Wolff, who would have preferred a single tender for 6GW rather than splitting it in two. France is effectively in competition with the UK and Germany, he points out. Those rivals have far higher ambitions and a burgeoning industrial base.

For the moment, however, everyone is focusing on getting their bids ready for the anticipated deadline of November 30 for final offshore wind project proposals. The hope now is that the tender lives up to expectations and puts some wind back into the sails of the industry in France. Given the doubts over the future of nuclear power, "France now, more than ever, has need of its abundant wind resource," Lanoë says. 

A battle at land and at sea one organisation leads the fight against french wind

The dominant opponent to wind power in France is the Sustainable Environment Federation (Fédération Environnement Durable or FED). Founded in 2007, FED claims a membership of nearly 800 associations, groups and individuals. Its aim is to halt the installation of industrial-scale turbines on the basis of purported risks to the health and safety of people living nearby. It also argues that guaranteed premium purchase prices afford an "abnormal" rate of return to investors and that turbines destroy the natural landscapes that are "the soul" of France.

The wind industry is an "ecological sham and a financial scandal", asserts Jean-Louis Butré, FED’s founder and president. "Public money is being used to enrich private companies, investment groups or individuals," he says, adding a claim that the biggest new fortunes in France have been made in wind. At a local level, FED claims houses located a kilometre from turbines can lose up to 30% of their value, while those at 500 metres — the nearest legal distance — are unsellable. 

As more turbines have been installed in France over the years, the anti-wind power movement has grown more vociferous and effective. FED in particular has become much better organised, making use of the internet to foster networks and disseminate information. Its main strategy is to contest siting permits in the courts, exploiting weaknesses in the regulations where possible. Nicolas Wolff, president of the French Wind Energy Association, describes FED’s website as
"an appeals toolkit", advising member associations on the
most effective strategies. 

Even when it proves impossible to win a case, the aim is to delay projects as long as possible, hoping the developer will give up. While the rate of decisions facing appeal dropped to a historic low of 14% in 2006, the industry believes the number has increased again to 20-30%. The vast majority of appeals have no basis in law, with the courts usually ruling in favour of the developer, according to Wolff. But by then the damage has been done.

For Butré, the passage of the Grenelle laws in 2009 and 2010 marked FED’s greatest success so far. Thanks to intense lobbying of members of parliament, plus the help of several well-placed supporters, the laws imposed tough new regulations on wind power, including a minimum of five turbines and the classification of turbines as potentially harmful to the environment and public health.

Even so, for Butré, the battle is far from over. "We will fight for any piece of land we can save," he declares, as FED also now turns its sights offshore.

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