France

France

Fixed tariffs for small scale projects -- Market support for 1500 MW

France's variable tariff for power from small wind plant, intended to stimulate a massive expansion of French wind power over the next 15 years, has finally become law. The tariff will apply until 1500 MW of wind capacity has been built. The aim of the variable tariff is to favour developments on less windy sites, effectively subsidising projects that take landscape and other concerns into account, not just high wind speeds. This, it is hoped, will avoid concentrating wind farms in the windiest areas where their accumulation may have a pronounced visual impact.

France's government-backed variable tariff for power from small wind plant, intended to stimulate a massive expansion of French wind power over the next 15 years, has finally become law. It was confirmed by the state industry secretary, Christian Pierret, in an upbeat speech last month closing the third annual conference of renewable energy group Syndicat de Energies Renouvelables (SER).

The long awaited arrêté -- an appendix to a decree -- on wind power pricing was signed by government ministers on June 8, but only after six months of hard negotiations between the industry ministry on one side and the environment agency (ADEME) and representatives of the renewable energy industries, led by SER president André Antolini, on the other.

"It was quite a struggle," says Antolini. "But I think we have a good tariff for the next few years: it's a good start." The tariff will apply until 1500 MW of wind capacity has been built.

Under the terms of the arrêté, operators of wind farms under 12 MW will be invited to sign a contract with the giant state utility Electricité de France (EDF) or one of the smaller utilities for 15 years. For the first five years of the contract all producers will get FFR 0.55/kWh (EUR 0.08/kWh). Over the following ten years the tariff will vary between FFR 0.2/kWh for sites that produced an average of more than 3600 kWh/kW during the initial period and FFR 0.55/kWh (EUR 0.03-0.08/kWh) for lower wind speed sites where the production was only 2000 kWh/kW during the first five years.

The aim of the variable tariff is to favour developments on less windy sites, effectively subsidising projects that take landscape and other concerns into account, not just high wind speeds. This, it is hoped, will avoid concentrating wind farms in the windiest areas where their accumulation may have a pronounced visual impact. France is protective of its countryside and wind developers have always made strenuous efforts to avoid opposition from NIMBY campaigners and conservation groups.

Next step competition

For wind farms over 12 MW another system of pricing will have to be designed -- perhaps competitive tendering. Offshore wind stations -- a potentially big growth area -- will also be priced separately.

The tariff for wind farms under 12 MW was provisionally announced at a wind power conference in December, but industry experts at the time advised caution until the small print had been debated and the official promises enshrined in law. The renewable industry had to make only one significant concession during the subsequent negotiations: the advantageous pricing system will apply only to the first 1500 MW of installed capacity. After that, unless there is any change to the system, the tariffs will be reduced.

Nevertheless, with still only about 100 MW of wind power installed in France it is being regarded as a generous threshold. "Due to planning and grid difficulties it is going to take some time to reach 1500 MW," says Antolini. "Besides, when we get there we will have the opportunity to fight again over prices if necessary." What happens after 1500 MW seems to depend on the direction public opinion is taking at the time. "It won't be up to EDF but to France as a whole to support the wind industry and this will be reflected in electricity bills," explained Christian Pierret.

With the price secure over the short to medium term the industry feels safe to move on to tackling a number of other issues which still stand in the way of a truly large scale installation of wind energy. Chief among these are likely to be how to improve the permitting process and whether France's national grid can cope with the arrival of new producers sited away from the major centres of traditional electricity production and consumption.

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