France

France

Corsica struggles with economics

After six years in the doldrums, there are signs that wind power activity is picking up in the French Mediterranean island of Corsica, where two projects totalling 26.8 MW received consent in recent months. The island has 18 MW of operating wind capacity but it was installed between 2000 and 2003. After that, market uncertainty brought development to a grinding halt and even under the fixed purchase prices for wind that have kindled dynamic growth on the mainland, projects still look marginal to some.

With the first two projects consented since 2003, the wind power market in Corsica is showing signs of life even though developers say the economics are marginal at the current power purchase price

After six years in the doldrums, there are signs that wind power activity is picking up again in the French Mediterranean island of Corsica, where two projects totalling 26.8 MW received consent in recent months. The island, off the west coast of Italy and lying south-east of France, has 18 MW of operating wind capacity, but it was all installed between 2000 and 2003. After that, market uncertainty brought development to a grinding halt and even under the fixed purchase prices for wind generation that have kindled dynamic growth on the mainland, projects on Corsica still look marginal to some.

The more advanced of the two projects is an 8.8 MW installation proposed by local developer Ludwig Hofmann at Marsulinu near the northern town of Calenzana. He believes the project is viable, even at the current purchase rate, because turbines are now available at cheaper prices and he can borrow money at good rates in today's recession-hit money markets. Hofmann is in the process of selecting an investor for the project, in which he will retain a minority stake.

All being well, construction could start in the summer, for commissioning early next year. Hofmann also developed and owns a part share in the last wind power plant to be built in Corsica, a 6 MW facility at Punta Aja, again near Calenzana, which is majority-owned by French owner-operator Theolia.

The second consent went to French renewables developer Eco Delta Développement (EDD) for an 18 MW project to be built on local authority-owned land near the towns of Méria and Morsiglia, also in the north of the island. EDD has established a joint venture that gives 140 district authorities a 20% stake in the project. The company has secured land rights for 25 years and is in final negotiations concerning the access road. EDD hopes to build a solar plant in the same area. This would make the wind plant more viable, it says, though it will still build the facility, even if the solar project is turned down.

Purchase prices

Until the French government introduced the current purchase price for wind power in 2006, Corsica, like all France's overseas territories, benefited from a specially generous rate to compensate for the extra costs of developing and building projects in the island's mountainous terrain. That rate started at EUR 0.0915/kWh for the first five years for electricity from plant operating an average 2400 hours at the equivalent of full load each year, before dropping to EUR 0.0747/kWh for the next decade. Plant on the mainland operating under the same conditions earned EUR 0.0838/kWh, falling to EUR 0.0596/kWh.

In 2006, however, the government decided that developers in Corsica were not limited to using the smaller, and relatively more expensive, cyclone-proof turbines required in France's tropical islands, but could use the same machines as on the mainland. So Corsica was brought under the standard purchase price regime: EUR 0.082/kWh for the first ten years, after which the rate varies over the next five years between a low of EUR 0.028/kWh for plant operating for an average of 3600 hours or more at the equivalent of full load each year and a high of EUR 0.082/kWh for 2400 hours or less.

Turbine size

Local developers and authorities argue that Corsica cannot use the same multi-megawatt scale wind turbines as on the mainland so the power purchases are not high enough. "In Corsica you can't use machines bigger than 1 MW," says Thierry Souchard, head of the energy department at Corsica's economic development agency, ADEC. "Mostly they are 600 kW up to 800 kW maximum because of the conditions and the roads, the difficulties of access and so forth." The cost of building roads and foundations are also much higher in Corsica, adds Hofmann. At the current purchase price, it is "very, very difficult to realise projects," he complains. Requests from ADEC and the industry asking the government to raise the rate have so far fallen on deaf ears.

The other major problem is that there is now a legally binding cap preventing more than 30% of renewable energy on the grid at any one time, specifically wind and photovoltaic. With demand falling as low as 90 MW at times, this represents a maximum of just 30-35 MW of renewables capacity. As a result, the previous target of 100 MW of wind by 2015 has been abandoned.

The cap is "arguable and arbitrary," says wind power consultant Paul Neau, who helped draw up a renewable energy plan for Corsica in 2007 based on the 100 MW target. But the first priority for ADEC is to get 30 MW up and running. Then it will look at getting the cap raised, says Souchard.

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