Markets

European Commission Clears €30.5 Billion French RE Scheme

France Proposes To Auction 34 GW New Renewables Capacity Between 2021 & 2026 Under New Aid Scheme; €30.5 Billion Scheme Gets European Commission’s Nod

Anu Bhambhani
  • France's aid scheme for renewables worth €30.5 billion has secured green signal from the European Commission
  • Under the same, France will issue tenders for 34 GW new renewable energy capacity between 2021 and 2026
  • Winning projects on achieving grid connection will be awarded premium on top of the electricity market price for a maximum of 20 years

The European Commission has approved a French aid scheme for renewable energy production worth €30.5 billion ($36 billion). Under this, the country has proposed to hold competitive auctions to award 34 GW new renewable energy capacity between 2021 and 2026.

Measured under the EU State Aid Rules, the commission found the aid 'necessary' to further develop renewable energy generation in France to help it meet its environmental goals. "It also has an incentive effect, as the projects would otherwise not take place in the absence of public support," emphasized the commission while announcing the approval.

Specifically, under the new aid scheme France will hold 7 types of tenders to award capacities for the following:

  1. Ground mounted solar
  2. Rooftop solar
  3. Onshore wind
  4. Hydroelectric installations
  5. Innovative solar
  6. Self-consumption, and
  7. Technology-neutral tender

Winning projects will be supported in the form of a premium on top of the electricity market price for a maximum of 20 years, once they are connected to the grid.

According to the commission, this €30.5 million scheme will enable France to achieve its renewable energy targets 'without unduly distorting competition and will contribute to the European objective of achieving climate neutrality by 2050'.

"This aid measure will stimulate development of key renewable energy sources, and support a transition to an environmentally sustainable energy supply, in line with the EU Green Deal objectives," said European Commission's Vice-President Margrethe Vestager, in charge of competition policy. "The selection of the beneficiaries through a competitive bidding process will ensure the best value for taxpayers' money while maintaining competition in the French energy market."

The commission said France has committed to carry out an ex-post evaluation to assess the features and implementation of the renewables scheme.

In its latest edition of Global Market Outlook for Solar Power 2021-2025, SolarPower Europe (SPE), total solar PV capacity of France at the end of 2020 reached 10.967 GW which it expects to scale up to 26.63 GW by 2025 under medium scenario. In Q1/2021, the report claimed the country to have brought online 634 MW taking the total to 10.99 GW. Its official target is to reach between 35.6 GW to 44.5 GW total solar power capacity by 2028 for which the report strongly recommends regulatory changes for instance widen the perimeter of eligible land in calls for tenders for ground mounted projects (see SPE: 163 GW Solar PV Capacity Addition Globally In 2021). In other words, so far the slow solar development in France was not a questions of missing funds but inefficiency and red tape.

The European Commission is targeting 40% renewable energy share and 55% net reduction in GHG emissions by 2030 which needs to be cleared by the European Parliament and European Council (see European Commission Proposes 40% RE In Energy Mix By 2030).

Early in July 2021, the EC positively assessed Lithuania's €2.2 billion Recovery and Resilience Plan under which the country will invest €242 million for renewables and storage (see EU Thumbs Up For €242 Million Lithuania's RE Plan).