France should end premium price, says regulator

FRANCE: France should replace its current guaranteed premium purchase price with competitive tenders for onshore wind power projects, energy regulator CRE said.

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CRE made its comments in a recent report issued as part of a debate over support mechanisms for renewable energies. It found that projects benefiting from the best wind conditions are making an "excessive profit".

The regulator argues that investment costs have fallen in recent years and will continue to do so.

CRE recommends tenders rather than a single purchase tariff, which it considers too inflexible. Alternatively, the structure of the tariff should be revised to reflect actual costs and reviewed regularly.

The length of the power purchase agreement should also be extended from the current 15 years, since most producers expect to operate their plant for 20 years or more, CRE noted.

In reply, the industry argues that CRE's analysis does not reflect the current situation. Among other things, grid connection costs are expected to rise by up to 55% in 2016, said renewable energy association SER.

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