France

France

Law creates fragile balance for wind -- Industry fears landscape zoning means new barriers

The wind industry is giving France's new energy law, which sets out energy policy to 2035, a mixed reception. The inclusion in legislation of France's EU target for 21% of electricity to come from renewable sources by 2010 is welcomed in a country that retains nuclear power as its premier energy source. Welcome, too, is the lifting of the 12 MW size limit on wind projects eligible for preferential tariffs. But the introduction of new wind power development zones, known as ZDEs, is being seen as yet another administrative hurdle in a country where 30% of siting permits are already refused. The law creates a "very fragile balance for wind power," says the Renewable Energy Syndicate (SER).

The industry is "resigned" to ZDEs, says Jean-Marc Armitano of the French Wind Energy Association (FEE), who hopes they fulfil their intended role in facilitating development rather than hindering it. While the law allows for a two year transition period during which the 12 MW ceiling still applies, developers can opt to build bigger projects in a ZDE. In theory, once a zone has been established, it should be easier to obtain siting permits. FEE says it will remain "vigilant" to ensure the present difficulties in obtaining permits are not simply transferred to the zones.

Zones are allocated by the lowest level communal authority, which can impose limits on development within a ZDE. Project proposals must subsequently go before a state-appointed prefect heading up the next level of local authority for approval. As well as consulting widely with other stakeholders, the prefect must consider the potential generating capacity, grid connection, other ZDEs in the area and the "preservation of the countryside, historical monuments and other outstanding or protected sites" in making its judgement, which must be delivered within six months.

Jean-Michel Germa of La Compagnie du Vent is more pessimistic than Armitano about the impact of the zoning system. ZDEs could be a useful tool, he agrees, but the way they are designed gives even more power to prefects and could slow down development. The new law, he says, "systematically blocks the development of renewables, and particularly wind." According to Benoît Praderie, head of Abo Wind in France, some prefects are already "rushing to produce landscape planning documents." In the Aude, a plan limiting the possibility of wind power development to just 12% was put forward in late July.

Questions not answers

Planète Eolienne, a pro-wind association, expresses its concerns in a briefing paper ordered from wind project developers. Many questions remain unanswered and sections of the law are open to different interpretations, says the brief. No one knows what happens if several companies apply to build in a ZDE. Whether planning decisions will be made on a "first come, first served basis," by auction or by some other mechanism, is yet to be announced, notes Planète Eolienne.

The law does not make clear whether a prefect can overrule the decision of the lowest communal authority about whether development can take place in a zone, nor does it say what happens if a prefect fails to deliver a decision within the six month time limit.

At least some of these matters will be dealt with in government decrees due to be issued over the coming months. SER's Antoine Saglio notes there is still room for optimism. One interesting change in the law allows communes to divide the local business tax received from wind plant among surrounding communes. This, he says, might encourage neighbouring communes not to block further wind plant developments.

A second major change in the law concerns public enquiries. Previously, only developments over 2.5 MW were subject to public enquiry. Now a height threshold applies, so that any project using a turbine over 50 metres tall, which includes many in the 200-300 kW range popular with farmers wanting to earn extra revenue, must face public scrutiny. The amendment has surprised many, says Saglio, especially since it mainly hurts France's only manufacturer, Vergnet, which specialises in small turbines.

Limit on earnings

Moreover, a last minute amendment on tariffs and subsidies is also included. Tariffs should be set so that producers do not earn more than a "normal" return on capital, taking into account the risks involved and the benefits of a long term contract, the law states, without further clarification.

The wording is widely seen as a precursor to a review of the pricing mechanism, which Saglio believes could take place this autumn or early next year. The four-year old system is ready for a review, he says, especially as installed capacity approaches the 1500 MW threshold when tariffs drop by 10%. This is expected to happen in 2007. The industry has long argued that the drop is too harsh. "If the tariff is not sufficiently attractive, there is a danger the take-off we are just starting to see will come to a stop," fears FEE's Armitano.

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