Speed Read -

The French on-shore wind market, one of the most active renewable markets in Europe, will be subject of a new legal framework which aims to allow for a more market driven electricity system in France. Whilst the French government has recently announced its ambitious objectives for on-shore wind energy, with the objective announced in October 2016 to reach 22,000-26,000 MW in 2023 (from about 11,000 MW currently), the French wind market is undergoing structural modifications. Indeed, it will switch next year from the current 15-year long, 82€/MWh, feed-in tariff scheme to a premium system under which wind farms will sell their electricity directly in the market, receive premium payments under a 20-year premium contract, and (above six wind turbines) be required to go through a competitive bidding process. The details of this scheme – applicable to new projects – remains to be finalised in the coming weeks. Stakeholders (developers, investors, etc.) will need to adjust to this new scheme, which bears some similarities to the one implemented in Germany in 2014.

Other measures are being proposed to bolster on-shore wind energy. In particular, a simplification of the permitting scheme and a framework for repowering are expected in the course of 2017.

Regarding the 2008 feed-in tariffs, the legal challenge ended in 2014 and confirmed the validity of the Power Purchase Agreement (PPAs). However, in accordance with EU State aid regulations, around 700 PPA holders were required in October 2016 to pay a lump sum to the French State. There have been reports of clerical mistakes made in some of the tax notifications sent to PPA holders. This should be checked carefully.