France considers offshore tariff revision
Thursday, Mar 15, 2018
The French government is seeking to renegotiate tariffs for its earliest offshore wind projects in the wake of dramatic cost reductions in the sector.

The proposal, submitted to the Senate, would affect six projects off the country’s west coast, according to the French business newspaper Les Echos. The projects represent a combined capacity of 3 GW and were procured in offshore tenders in 2012 and 2014.

Those awarded in 2012 were won by consortia led by EDF and Iberdrola, while a group led by Engie won the 2014 tender. The tenders, due to be up and running by 2023, were offered at strike prices of 180-230 euros (US$223-285) per MWh, which now sit in stark contrast to recent tenders in other European markets.

Elsewhere, projects with similar delivery dates have been secured at almost a quarter of the price thanks to technological developments including the advent of significantly larger turbines.

In the Netherlands, the most recent offshore tenders have been won by bidders ready to be paid no subsidy at all. The UK’s most recent Contract for Difference auction was won by developers bidding as low as GBP57 (US$80) per MWh for projects due to come on line at the same time as the French projects.

Les Echos reported that if the project terms are not renegotiated, the Elysee Palace would consider cancelling the projects and launching a new auction process altogether.

However, wind industry figures said that such a move would send “a disastrous signal, without precedent” and would discourage investment in a sector that is far less developed than its counterparts in the UK, Denmark, Germany and the Netherlands. Despite significant offshore potential around its coastline, France still has no installed offshore capacity.

Slow development is, in part, because the country’s energy system is dominated by nuclear power and a powerful nuclear lobby. But locals are less than welcoming of planned projects too. According to Reuters, none of the offshore sites awarded in 2012 and 2014 has proceeded so far because of fierce local opposition.

The country has been slightly more supportive of floating projects, following the inauguration of the 2-MW Floatgen project in October 2017 and the award of tenders in 2015 to develop sites at Gruissan and Groix and a further two at Languedoc-Roussillon and Provence-Alpes-Côte d’Azur.

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