Changes to the French Onshore Wind Support Scheme: a tortuous pathway toward an ill-conceived auction regime ?
By Romain Mauger,
Post-doctoral fellow, Groningen Centre of Energy Law
Onshore wind energy development in France was
marked by a very high level of legal uncertainty caused by regulation
volatility in the past years. This factor is one of the main to explain the
volatility of annual wind energy new connections to the grid in France from
2006 to 2016, especially with a difficult time from 2011 to 2013 . Regarding
the support scheme, since 2001 onshore wind energy was supported by
Feed-in-Tariffs (FiT) , but this has changed in 2017 after a rather
difficult transition to Feed-in-Premiums (FiP). The following lines provide
elements on the multiple steps of this policy change, portray its current
results and raise some critics.
European Commission guidelines regarding State aids for wind energy
According to the European Commission (EC)
guidelines on State aid for environmental protection and energy for the period
2014-2020, since 1 January 2016 renewable energy producers receiving State aids
should “sell their electricity directly in the market” and be submitted to
market obligations . Therefore, the
traditional FiT, key feature of the wind energy development in Europe , is
to be replaced by European Union (EU) Member States into their legislation by
other support schemes, including FiP.
From 1 January 2017, the same guidelines
require to grantthe public funds “in a
competitive bidding process on the basis of clear, transparent and
non-discriminatory criteria” . It means that technology neutral bidding
processes should be, at the date of publication of this note, the usual way to
allocate public support money to renewable energy in EU Member States.
Multiple exceptions however apply, particularly
for wind energy. Regarding the FiP, wind farms can avoid them when totalling no
more than 3 MW of installed capacity or 3 “generation units” . Concerning
the attribution of the support by tenders, wind energy is also favoured as it
can avoid auctions for facilities up to 6 MW or 6 generation units . Finally,
regarding technology neutrality, the guidelines authorise 5 alternative
possibilities to circumvent them but they will not be developed in these lines.
transitional regime in France from administratively defined FiT to auctioned
As developed hereunder, France made full use of
the exceptions provided by the EC guidelines in order to keep a support scheme
model as close as possible as the FiT implemented for onshore wind energy and
then preserve its competitive capital costs . The transition from the
pre-2016 to the 2017 and onwards regime has been tortuous though, and the new
support scheme is fully active since July 2017 only. Some of its aspects also
contain strong shortcomings.
the tortuous way out of the administratively set FiT
The Energy Transition for Green Growth Act 2015-992
of 17 August 2015, a flagship act supposed to establish a legal framework
enabling the energy transition from fossil and fissile fuels to renewable
energy in France, paved the way for the transition from FiT to FiP for
renewable energy sources. Its article 104 created a new section in the Energy
Code (art. L. 314-18 and following) providing the regime for the FiP or Complément de rémunération.
Nonetheless, it is not before May 2016 that
Decrees have been published specifying the eligible facilities to FiT, FiP or
both and the modalities of the FiP (calculation formula, etc.). As defined in
the 2016-691 Decree of 28 May 2016 , onshore wind turbines were eligible to
both schemes, without any limit of installed capacity or number of generation
units. This provision, clearly violating the requirements of the 2014 guideline
seen before, was based on the 10-years validity of the 2014 wind tariff order issued
after a long-winded court case launched in 2008 by wind energy opponents .
The wind support scheme was finally adjusted
the 13 December 2016 by a retroactive tariff order . Approved by the EC,
this order produced effects from the 1 January 2016. It placed the total target
price at the same level as the previous FiT (82 €/MWh) in order to preserve the
legal certainty for the wind farm developers having requested or obtained the
tariff during 2016. Though reluctantly, the French energy regulator (the Energy
Regulatory Commission or Commission de
régulation de l'énergie) approved this move .
More recently, the Decree 2017-676 of 28 April
2017 repealed and replaced the December 2016 tariff order but with a grace
period of 3 months, meaning that the FiP based on the FiT level was still
available until July 2017 . It also definitely repealed the access for
onshore wind energy to the FiT  and implemented a threshold for having
access to the FiP without auction . These aspects will be developed in the
onwards: an ill-conceived wind energy FiP auction regime
The new onshore wind support regime can be
considered as completed with the 28 April 2017 Decree seen before and the 6 May
2017 tariff order , establishing a FiP accessible directly without
competition and administratively set, which will be developed first in the
following lines, and a FiP accessible via competitive bidding, detailed in the
next paragraph. In accordance with the EC guidelines of 2014 exceptions, the
FiP is then available without competitive bidding procedure for wind farms
under 6 units. No wind turbine can be of an installed capacity of more than 3
MW and the full facility must be at least distant by 1500m from any other wind
farm . The FiP has a duration of 20 years . The total target price at
which the electricity produced is sold (adding the direct sale on the market
plus the premium(s)) is set by the regulation between 72 and 74 €/MWh depending
of the rotor diameter and is annually capped . Once that the annual electricity
output eligible to the premium is reached, the remaining production has a
target price of 40 €/MWh . This mechanism is supposed to limit the cost for
the taxpayer and avoid excessive remunerations for the best situated
For the wind farm falling outside of the
conditions for having a direct access to the FiP, non-technologically neutral tenders
have been implemented in May 2017 as well. They then mainly concern the
facilities gathering more than 6 wind turbine or having at least 1 wind turbine
of an installed capacity superior to 3 MW. The tender specification has been
released the 5 May 2017 and the auction will take place in 6 phases spanning from
2017 to 2020, of 500 MW each time, for a total of 3 GW of opened capacity .
The only selection criteria is the price and the unallocated capacity can be
added to the following phase. Some advantages are provided for participative
projects to foster their development (taking the shape of a bonus on the premium).
If the FiP regime for onshore wind in France
seems fine-tuned, it however contains strong shortcomings when one knows the
French onshore wind energy market. Because of the mix of diverse constraints
such as urban sprawl, rules of distance with dwellings, radars, airports,
historical monuments and other facilities, it is very unusual to develop a wind
farm of more than 10 wind turbines in the recent years. According to the
Ministry in charge of the Environment and Energy, in 2016 the average size of a
typical wind farm in France was a bit less than 10 MW, that is to say, 5 wind
turbines of 2 MW each . The same source provides a distribution by capacity
groups, and 93% of the wind farms gather a total installed capacity of less
than 12 MW .
The risk is therefore that most of the wind
farms in France will still apply to the administratively set FiP and that the 3
GW of capacity opened for bigger wind farms will probably lack of the
sufficient competition to really drive the costs down. This is the reason why
the French energy regulator requested to reduce the total capacity opened for
bidding and/or to limit the direct access to the FiP to the facilities up to 6
MW instead of 6 wind turbines .
Once that all the pieces of the new support
scheme for onshore wind energy in France are put together, doubts arise on its
capacity to reproduce the steep price fall that has been witnessed in 2017 in
Germany and in Spain . If the new legal frame follows the EC guidelines and
seems able to provide some well-needed stability and predictability to wind
farm developers, ironically some changes should take place if the French
Government wishes to drive down wind energy costs via competitive bidding procedures.
 Loi n° 2000-108 du
10 février 2000 relative à la modernisation et au développement du service
public de l'électricité, art. 10;Arrêté
du 8 juin 2001 fixant les conditions d'achat de l'électricité produite par les
installations utilisant l'énergie mécanique du vent telles que visées à
l'article 2 (2°) du décret n° 2000-1196 du 6 décembre 2000.
Commission guidelines on State aid for environmental protection and energy
2014-2020, 2014/C 200/01, para 124.
 Fan Zhang, “How
Fit are Feed-in Tariff Policies? Evidence from the European Wind Market”, World
Bank Policy Research Working Paper 6376, February 2013, p. 1 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2226284 ; Tim Maxian Rusche, EU Renewable Electricity Law and Policy: From National Targets to a
Common Market, Cambridge University Press, October 2015, pp. 62 – 68.
Commission guidelines on State aid for environmental protection and energy
2014-2020, 2014/C 200/01, para 126.
 Décret n° 2016-691 du 28 mai 2016
définissant les listes et les caractéristiques des installations mentionnées
aux articles L. 314-1, L. 314-2, L. 314-18, L. 314-19 et L.314-21 du code de
l'énergie, art. 4.
Pentecoste, Alexandre Silva-Delaquaize, « ENR : entre tarifs administrés et
prix de marché », Énergie - Environnement - Infrastructures n° 7, July 2016,
study 16, pt 4.
du 13 décembre 2016 fixant les conditions du complément de rémunération de
l'électricité produite par les installations de production d'électricité
utilisant l'énergie mécanique du vent.
de la Commission de régulation de l’énergie du 3 novembre 2016 portant avis sur
le projet d’arrêté fixant les conditions du complément de rémunération de
l'électricité pro-duite par les installations de production d’électricité
utilisant l’énergie mécanique du vent.
n° 2017-676 du 28 avril 2017 relatif à l'autoconsommation d'électricité et
modifiant les articles D. 314-15 et D. 314-23 à D. 314-25 du code de l'énergie.
 Id., art. 1, 1° b).
 Id., art. 1, 2° b).
 Arrêté du 6 mai
2017 fixant les conditions du complément de rémunération de l'électricité
produite par les installations de production d'électricité utilisant l'énergie
mécanique du vent, de 6 aérogénérateurs au maximum.
 Délibération de la Commission de
régulation de l’énergie du 23 mars 2017 portant avis sur le projet de cahier
des charges de l’appel d’offres portant sur la réalisation et l’exploitation
d’installations de production d’électricité à partir de l’énergie mécanique du
vent, implantées à terre, p. 5, recommandation n° 3.
Europe`s largest onshore gas field in the province of Groningen, Netherlands, will be shut down by 2030, the Dutch government decided last thursday, 29 March 2018. The decision is the latest move in a more-than-decade long saga of resistance against gas production in the Groningen region. Earth tremors and quakes triggered persistent local opposition to gas production. The production company NAM is showing little appetite to challenge the decision in court.
As Germany is heading to the polls this week (Sunday 24 September 2017), the energy and climate law blog assesses the election manifestos of the main political parties in Germany with a view to energy and climate. What is Germany`s renewable energy future looking like? Is the German energy turnaround (Energiewende) here to stay and how shall it be steered in the coming years? How do the parties aim to combat climate change?
Cees Verburg, PhD Researcher, Groningen Centre of Energy Law On 4th May
the first ICSID Tribunal rendered its award in a case brought by a British and
Luxembourgish investor against Spain.
In this case the Spanish winning streak in Energy Charter Treaty (ECT)
arbitration, which consisted of victories in the Charanne v. Spain and Isolux
v. Spain cases, came to an abrupt end. The Tribunal came to the conclusion
that the Spanish measures, which replaced a renewable energy support scheme for
a less favourable new one, amounted to a violation of the fair and equitable
treatment standard of Art. 10(1) ECT. Consequently, the investors were awarded
EUR 128 million in damages.