France

France

Hopes for 'competitive' prices as Dunkirk draws heavyweights

Fierce competition is expected to produce competitive pricing as some of the biggest offshore wind developers sign up to bid for the 750MW Dunkirk offshore wind project.

The area off Dunkirk 'is one of the best zones to develop offshore wind in France', according to FEE
The area off Dunkirk 'is one of the best zones to develop offshore wind in France', according to FEE

Ten consortiums were pre-qualified for the tender in May 2017, with more major players joining since then, the most recent being Ørsted partnering with Total and Belgium's Elicio.

Engie and EDPR are also said to be in negotiation with E.on. 

"The competition is intensifying ... and the price per megawatt-hour will probably be very competitive," said Marion Lettry, assistant executive commissioner of renewable-energy trade body SER.

One notable exception is Spanish developer Iberdrola, which pulled out early in the process, saying it was "a business decision".

The company's construction schedule to 2025 was full, with other projects competing internally for Capex, it said.

In the race for Dunkirk
EDF Renewables, Innogy, Enbridge
Vattenfall, Wpd, Caisse des Depots
Elicio, Total, Ørsted
Engie, EDPR
Equinor
InControl France
Deme Group, Shell, Quadran
Parkwind, Valeco
Eneco, Boralex, Van Oord, DGE

The strong lineup is a long way from the previous two tender rounds, when just three consortia led by EDF Renewables, Engie and Iberdrola, respectively, entered the bidding.

The Dunkirk tender "illustrates the attractiveness of the French offshore wind market, especially since the legal framework has been improved and the tender’s criteria have changed," said Matthieu Monnier, head of offshore wind at French wind energy association FEE.

The tender was held under a new regulatory framework featuring competitive dialogue, and with a number of de-risking studies carried out by the government.

While some details of the tender terms have not been made public, it is no longer a requirement for the turbines to be made in France.

Further, the overriding emphasis for selection is on financial criteria, with perhaps as much as 70% attributed to price, 10% to financial soundness and the remaining 20% to environmental aspects.

The government, which is pushing for bids to approach market prices, recently announced a cap of €70/MWh. 

Another attraction is that Dunkirk "is one of the best zones to develop offshore wind in France, with a wind speed regime indeed highly adapted to wind energy operation," Monnier added.

The consortiums have until 15 March to place their bids. The regulator CRE should make its recommendations mid-April, with a final winner due to be announced early summer and operation slated for 2022.

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