French tenders mark real step toward offshore

France awards four projects under 3GW tender

The projects have a combined capacity of nearly 2GW, represent a likely investment of €7 billion and will create 10,000 manufacturing jobs, according to the French government.

The decision "will lead to the development of a new industry with global ambitions ... and place France among the world leaders in the offshore wind industry," said industry minister Eric Besson.

The clear winner of the tender, which was announced last July, was the consortium led by EDF Energies Nouvelles (EDF EN) and also comprising Danish developer Dong Energy, French developer Nass & Wind Offshore and German developer WPD Offshore. It was awarded three projects totalling nearly 1.5GW. Alstom will supply 240 of its new Haliade 150 6MW turbines to the consortium, an order worth over €2 billion.

In the meantime, Alstom said it will invest around €100 million to build four factories that will produce nacelles and generators at St-Nazaire, and blades and towers at Cherbourg. The blades will be made in partnership with LM Wind Power and production should start in 2014.

Low-cost bid

While the ten bids for the four offshore development zones were all of good quality, with strong supply-chain proposals, EDF EN offered the lowest purchase price in all cases, said the government. Nevertheless, it decided to award one project to Iberdrola and Eole-RES to "give a chance to a second consortium" and to maximise benefits.

The decision to award one project to a second development consortium was based on Besson's belief "that a viable industrial sector must be supported by several structural players, [and] the industrial effort and therefore the risk should be spread across different operators".

Iberdrola and Eole-RES were awarded 500MW in partnership with Areva, French renewables firm Neoen Marine, UK engineering company Technip, and South Korean Marine Engineering firm STX. Although it had been hoping for more, Areva confirmed that it will, nevertheless, build two factories in Le Havre, producing nacelles and blades for its 5MW turbine. STX will manufacture the jacket foundations in St-Nazaire and Technip will install the cables, foundations and turbines.

Areva, like Alstom, will be banking on more orders in France and will also be targeting the export market to keep French factories running.

Left out

The French government’s announcement left the third consortium, consisting of GDF Suez with UK construction firm Vinci and French state-owned investment company Caisse des Dépôts et Consignations, empty handed, despite this consortium bidding for four of the five projects tendered.

In one case, the GDF Suez-led consortium was the only bidder, submitting the sole bid for a wind farm in the Le Tréport zone. However, the French government has decided to delay awarding rights to Le Tréport. "Because the zone did not attract sufficient competition, the purchase price of electricity is the highest among the five areas," the government said, as an explanation for its decision.

GDF Suez reportedly bid €220/MWh at Le Tréport, €45 above the government's ceiling price. As it is, the power prices for the four projects for which development rights have been awarded will add around €1.1 billion a year to electricity bills, said Besson.

The losing consortium will get another bite at the cherry, when Le Tréport is put out to tender again in a second round. This was to have been launched in April for 3GW, but the government has pushed it back until after the summer. Although the first round only yielded 2GW, Besson insists that the country’s state target of 6GW of offshore wind development will be achieved. It is not clear if the second round will be increased to 4GW, or more, or if there will be an additional, third call for tenders.

Meanwhile, there is still a long way to go before any turbines begin turning in French waters. The winners of the first round now have 18 months to complete technical and financial feasibility studies and then have to go through the permitting process. Even if everything goes smoothly, it is unlikely any projects will be commissioned before 2017.

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