French projects face tariff cut or cancellation

FRANCE: A draft amendment tabled in parliament on 9 March could allow the government to renegotiate offshore wind tariffs awarded in 2012 and 2014, or even cancel them all together.

France's National Assembly (pic: Richard Ying and Tangui Morlier / WikiCommons)
France's National Assembly (pic: Richard Ying and Tangui Morlier / WikiCommons)

The six offshore projects awarded by tender in 2012 and 2014, totalling roughly 3GW, could face seeing their tariffs cut.

"As prices of offshore wind farms have fallen sharply, the state is seeking to reduce the cost of public support," the government explained in the draft.

The six projects affected are Courseulles-sur-Mer, St-Nazaire and Fécamp, awarded to a consortium led by EDF Energies Nouvelles in 2012; St-Brieuc, assigned to Iberdrola and Eole RES, also in 2012; and Dieppe-Le Tréport and Les Iles d'Yeu et Noirmoutier, awarded to an Engie-led consortium in 2014.

Due to the terms of the tender system in place at the time, the risk structure and seabed conditions, among other things, the six projects were awarded tariffs of around €200/MWh, including grid connection.

Since then, prices elsewhere in Europe have tumbled, prompting the government to rethink its strategy.

"In some cases, especially when technical progress makes it possible to envisage substantial cost reductions, the state may wish to renegotiate the conditions of the offer... and in particular to reduce the amount of the tariff chosen," the amendment stated.

If this is not possible, "one of the options could be to put an end to these projects and start a new procedure," it warned.

Candidates will be compensated for "all expenses incurred, duly justified, between the decision designating them as successful candidate and the decree [withdrawing the award]," the draft added.


The industry is up in arms, with renewable-energy trade body SER describing the proposal as a "disastrous, unprecedented signal" that puts all commitments in the area in doubt.

"We call on the government to withdraw its proposal to ensure that France remains a country where the decision to invest cannot be challenged overnight," said Jean-Louis Ball, president of SER.

French wind energy association, FEE, argued the amendment, "tabled without prior dialogue", "undermines the competitiveness of the industry and undermines the confidence in the calls for tenders". 

FEE president Olivier Perot, said: "The possibility of unilaterally challenging projects awarded by competitive bidding is in contradiction with the method implemented by the Ministry of Ecological and Solidarity Transition in the context of National Wind Working Group, which aimed to give visibility to the sector."

Engie said that they had no comment to make at the moment but "would not hide their deep concern for their projects and the whole sector".

The amendment would create a "disastrous precedent" bringing into question all the projects awarded by tender, undermining legal security and the confidence of investors.

The Union Française de l'Electricité (UFE) agreed, saying that if the government wants to meet its energy transition objectives, "it is essential to maintain a climate of trust for all investors and economic players."

UFE also pointed out that if the government wants to drive down prices, then the best idea is not to undermine confidence: "The greater the level of trust in the system, the more competition there is, the more investors are willing to receive lower levels of remuneration, and the lower the costs of projects."

In other words, it is a virtuous circle, where short-term losses will be balanced by long-term gains.

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