For French wind energy proponents, 2001 will be remembered as the year in which everything happened and not much happened. Half way through the year the government passed a long awaited decree on wind power pricing which sets a 15-year premium tariff for output from small wind stations of 12 MW or less. But instead of stimulating a rash of development activity, projects were immediately buried in planning permit red tape which even the government recognises is in need of reform. The result was very little new development in 2001.
For this year and next year, however, industry expectations are great. The direction of French energy policy has not been in doubt since the passing of a law on the "modernisation" of the electricity industry on February 10, 2000. This led to the effective scrapping of the government's competitive tendering program, EOLE 2005, which had stimulated the planning but not implementation of about 50 new wind projects. After much negotiation with the renewables industry the government announced a feed-in tariff in June, 2001.
Under the terms of the decree, the owner of a wind farm under 12 MW earns EUR 0.0838/kWh for the first five years of its operation. Over the subsequent ten years the tariff varies according to the productivity of the site, between EUR 0.0305/kWh for a wind farm that produces an average of more than 3600 kWh per installed kilowatt during the initial period and EUR 0.0838/kWh, for turbines only producing 2000 kWh/kW. The aim of the variable tariff is to favour the development of less windy sites. The renewable industry had to make only one significant concession: the advantageous pricing system will apply only to the first 1500 MW installed.
For wind farms over 12 MW another system of pricing will have to be designed, probably involving competitive tendering. Offshore wind farms will also be priced separately. Studies have been completed on both the Mediterranean and Atlantic coasts and suitable sites identified. The first offshore turbine is expected to be installed at La Rochelle in 2003.
The first wind farm to benefit from the new price regime, the 5.64 MW Roquetaillade project, near Limoux, in Aude département, operated by La Companie du Vent, came on-line at the end of 2001. This brought the installed capacity of all French wind plant to 85 MW, of which 11 MW are in the overseas territories.
Projects totalling around 400 MW have been given government approval and about 90 MW should be completed in 2002. Their experience of the laborious planning procedure led to the formation of a government-industry working group. It is about to issue guidelines to the local government appointees (préfets) who ultimately decide on planning applications. These instructions will emphasise that préfets should treat wind farm projects with sympathy, in line with government policy. It is likely that a solution to the planning bottleneck will be announced at the conference of the Syndicat des Energies Renouvelables in Paris in April.
More trouble may be brewing further ahead when the addition of wind plant stretches grid capacity to beyond its limit in rural areas. Who will pay for and build additional grid capacity is a subject yet to be tackled.
Although wind's star is on the rise, the government legislation could be too little, too late. The French Environment Institute (Ifen) is warning that rising demand for electricity will outpace the rate of wind development -- and the percentage share of supply coming from renewable energy will fall rather than rise. As a result, wind power will not help France reduce its carbon emissions.
Wind will have to convincingly argue its case against nuclear power. The nuclear industry has responded to the renewables debate by protesting its environmental credentials. Around 76% of France's 540 TWh annual production comes from nuclear power stations -- the highest proportion of any country in the world. But many of the PWR reactors are coming to the end of their lives and will have to be replaced or decommissioned. Renewable campaigners say the nuclear industry will fall from grace over the next few years.
There is still a strong lobby, however, which argues that nuclear, far from being "anti-environment," is the most effective way of reducing emissions. Even EU energy commissioner Loyola de Palacio says nuclear power is needed to meet the EU's Kyoto protocol commitments. State utility Electricité de France (EDF), which is conspicuously backing both the renewable and nuclear horses, notes pragmatically: "In France today, the kWh generated by EDF releases eight times less CO2 than the generating facilities of the other countries of Europe, thanks to hydro and nuclear power plants."
Wind has had to face other, more subtle challenges. A recent report to parliament warned that France was placing too much emphasis on subsidised wind energy as the way to meet the EU directive on renewables, advising it to concentrate instead on biofuels and solar power.
Green credit trading
The most vociferous critic of the government's policy towards wind has been the electricity regulator, the Commission de Régulation de l'Electricité (CRE). Champion of the consumer, whose interests, it believes, would be best served by a wholly deregulated market, the CRE argues against a fixed tariff system for wind power. The tariffs will pay wind energy producers well above their costs, says the CRE. This can be proved by comparisons with countries that rely on calls for tenders. Wind producers in France will get an average of EUR 0.07/kWh for 15 years whereas prices coming out of tendering processes in the EU or the USA would be closer to EUR 0.05/kWh. In other words, CRE feels the consumer is expected to supply unreasonable profits to wind farm operators, says the regulator. It would like to see the government promote a system of green credit trading instead.
Christian Pierret, industry secretary of state, has admitted that French consumers will have to pay more for green electricity. EDF expects electricity prices to rise by 5% over the coming year. The success or failure of the government's current renewable policy may depend on whether there is a consumer backlash as charges go up.
The sudden rush of foreign wind power companies joining the French wind power producers' professional association, France Energie Eolienne (FEE), is a clear indication that this is a market which the industry believes is finally going places. Some, particularly turbine manufacturers such as Vestas, Nordex and Bonus, are content merely to sell their wares to French developers. Other companies have set up French subsidiaries. Most prominent of this group is Ostwind of Germany, which has just announced plans for a 150 MW project in northern France.
Other companies have formed mergers with French companies. The longest running Franco-foreign partnership is Eole-RES, between Eole Technologie and the UK's largest wind energy developer, Renewable Energy Systems. It won around a quarter of EOLE 2005 contracts and operates France's largest wind farm to date -- the 20 MW Souleilla-Corbières plant, northwest of Perpignan in Aude département.
Out of necessity, most of the turbines to be installed in France will be built abroad. France's only manufacturer of large wind turbines is Jeumont SA, a subsidiary of the multinational nuclear energy group Framatome ANP, which in turn is part of the new, partly state-owned Areva nuclear group. Series production of its first turbine, rated at 750 kW, has just begun. The only other turbine manufacturer of any size is Vergnet, which specialises in smaller turbines from 2 kW to 220 kW.
While foreign companies are trying to get a toe hold in France, French companies are hoping to expand in the opposite direction, using the forthcoming boom in the domestic market to break into export. Some are already successful. EDF and Cabinet Germa are active in Morocco, and EDF is building an offshore wind farm in Britain. Eole-RES has projects in Switzerland and North Africa. SIIF Energies has won itself large concession contracts in Brazil and is also involved in Portugal, Sweden, Italy, Poland and Mexico. Turbine manufacturer Jeumont is targeting markets in Spain, Canada, Asia and China.
The government's commitment to wind and renewables in general seems to be holding fast and unlikely to alter whoever wins this year's elections. The choice of Paris as the venue for the first global windpower conference and exhibition in April, meanwhile, is one more sign that this year France is the country to watch.