Now vying for third slot in European rankings -- Picking up speed in France

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France was Europe's third largest wind market in terms of new capacity installed in 2007, with an additional 888 MW coming on line during the year. This brings the national total to 2370 MW for mainland France and Corsica, and 2455 MW including the French overseas territories. While this was less than the more than 1000 MW the industry had been hoping for, it still marked a 25% increase over the 707 MW added in 2006.

"Overall, we are happy with progress during the year," says Charles Dugué of the French Wind Energy Association (FEE). And with around 3000 MW fully permitted and waiting to build, the industry remains optimistic that growth will continue. The current forecast is for at least 1000 MW to start turning in 2008 and the same again in 2009.

Various reasons are given for last year's shortfall. According to Dugué, developers were concentrating their efforts on getting permit applications in before July 14th, after which only plant built within a wind power development zone (ZDE) are eligible for the guaranteed premium purchase price at which French national utility EDF is obliged to buy output. This meant they had less time to devote to building projects already permitted, he argues. Problems securing turbines in a tight global market may also have been a factor.

Dugué believes it is too early yet to see any slowing down due to the new regulations surrounding ZDEs because the projects building now were permitted under the old system. Problems with ZDEs are expected, however. "No one is satisfied with the way the regulations are working," laments Marion Lettry of the Renewable Energy Syndicate, a trade association.

The ZDE effect

Zones are proposed by the local district authorities, the "communes," which specify what size limits on wind projects, if any, apply. The state-appointed officials (known as prefects) heading up the next layer of local government, the départements, decide whether to approve the ZDE, taking into account its generating capacity, grid capacity and "protection of the countryside, historic monuments and other outstanding and protected sites." Once the ZDE is approved, developers have to apply for siting permits in the normal way.

While the industry believes the zones could prove a positive force, it worries about how the system will work in practice. The main fears are that prefects opposed to wind power will block developments and that the ZDE process will duplicate aspects of the permitting procedure, with wasted time and money to follow.

At the start of 2007 the situation was looking reasonably optimistic, with the ZDE system into its third year having run parallel to the old system since 2005. By February 28, 18 zones representing 602 MW had been approved, reported the government, and 63 proposals for 4142 MW were under instruction. The largest single zone was for 315 MW installed capacity and on average it took just under the legal limit of six months to process a ZDE application.

Since then it seems things have not been so rosy. Dominique Darne of Eurowatt, a Luxembourg-based investment company with a portfolio of renewables assets, cites several examples of prefects using the ZDE as an excuse to reject projects. In one département, he says, the prefect is turning down proposals for projects located outside a zone, which is illegal since the ZDE only determines whether or not a project is eligible for the fixed purchase price. Administrations are also interpreting the rules inconsistently, despite a 27-page guidance circular issued by government to local authorities in 2006.

Another aspect now coming to light is that some ZDEs -- created or under consideration -- are smaller than expected. The original hope was that groups of communes would join to create a zone covering a wide area. Instead, it seems many ZDE are determined by a single commune or, at the most, one or two.

SER's André Antolini agrees the instrument "is not perfect and could be improved," but he feels the issue of size needs to be handled "very sensitively" given the difficult question of landscape issues in France and the country's small but vocal opposition to wind power. No one wants to change the legal framework, but the ZDE is not a "fast-track system," he says. As such it could have a crucial impact on whether France meets its ambitious renewables targets.

One of the biggest political events of the year in France in 2007 was a national summit dubbed the Grenelle de l'Environnement, a grand gathering that led President Nicolas Sarkozy to declare: "We want to make France a leader in renewables, over and above the European target of 20% of our energy consumption by 2020." (Windpower monthly, December 2007). Since then more than 30 working groups have been translating the summit's proposals into action plans, including the thorny question of how it will all be financed.

The renewables working group looks likely to retain SER's proposal for 25,000 MW of wind capacity by 2020, of which some 6000 MW will be offshore. The next stage of the Grenelle process will include detailed discussions on the feasibility of the target, including talks on grid integration, administrative barriers, licensing problems and the impact of ZDEs.

Purchase prices

The government's mandated purchase price for wind power will also come under the spotlight, with the industry calling for revisions to the tariff regulation to make development of less windy sites economically viable. Under the current regulation, the rate for onshore plant is set at EUR 0.082/kWh for the first ten years, after which it varies between EUR 0.028/kWh for plant operating at full capacity for an average of at least 3600 hours a year and up to EUR 0.082/kWh for 2400 hours or less of operation. The fear is that on sites which yield no more than 2200 hours at full production -- representing around half the country's total potential -- development is no longer viable at those prices.

Darne points out that with wind turbines costing more, the purchase prices have not kept pace with the increased cost of wind power production. Some companies are considering abandoning more marginal projects, or selling them to the utilities, which are willing to accept lower rates of return. SER's proposed solution is to refine the price structure so that plant operating for 2200 hours or less are eligible for the guaranteed premium price for at least 36,000 hours of operation, up to a maximum term of 20 years.

How much of this eventually makes it into law remains to be seen. The working group is due to report to the ministry in the coming weeks, after which measures requiring legislation will go before parliament in late spring. "It is important to see the target is maintained in the final report," says Antolini.

After Sarkozy's grand words, the onus is now on the French government to take a leading role during its forthcoming presidency of the European Council to ensure the EU's new renewables directive is signed by the end of the year. "It is very important that France makes every effort to get the directive adopted before the end of 2008," Antolini states.

Radar and grid issues

The other big work-in-progress for 2008 is dealing with the problem of alleged interference from wind turbines on radar systems operated by the defence and civil aviation forces and meteorological service in France. SER estimates that over 2000 MW of wind projects are frozen in the permitting process due to radar interference fears.

After a year of lobbying, SER persuaded the government to establish a working group of radar operators, wind industry representatives and ADEME at the end of last year. Lettry, who describes the meetings so far as "constructive," says the group recently launched the first of a series of studies to investigate the problem under the auspices of the French Aerospace Laboratory. It "could take months if not years" for a solution, however.

Another problem that recently surfaced is grid congestion in some parts of France. Picardie, the Massif Central and the Aveyron are the areas worst affected, where the grid is particularly weak and unable to take more power. In some cases developers have already had to abandon or revise projects. SER and grid operator Réseau de Transport d'Electricité have been studying the situation to identify priority areas for reinforcement where wind power projects are likely to be built. Their report is due out shortly.

Investment target

Despite all this, France is still a target for investors and 2007 saw continued consolidation in the market, with the utilities in particular showing a healthy appetite.

Among other deals, the international industrial and services group Suez won a bidding war for local developer La Compagnie du Vent, while state utility Gaz de France took a 95% stake in Erelia, a Nancy-based developer. Poweo, France's largest independent electricity and gas supplier, bought Espace Eolien Développement, a long established and privately-owned developer and wind power consultancy. Right at the end of the year the Italian electricity and gas producer Sorgenia agreed to buy 80% of wind project developer and operator Française d'Eoliennes.

Not that all the money was going one way. Alstom, an engineering multinational headquartered in France, bought Spanish turbine manufacturer Ecotècnia last summer, while shortly after, nuclear giant Areva took a 51% stake in the makers of the German Multibrid turbine. Multibrid's first 5 MW machines should soon start turning off the coast of France (page 106.)

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