Cancelled wind feed-in tariffs to cost French producers millions

03 June 2014 13:20 Source:ICIS

French wind electricity producers will have to pay “tens of millions of euros” in interest as a result of the Conseil d’Etat verdict ruling France’s onshore-wind feed-in tariffs (FITs) as illegal state aid under EU rules, Sonia Lioret, the CEO of the French wind association France Energie Eolienne (FEE) told ICIS in an interview.

Producers will not have to return the full subsidies, however, as Conseil d’Etat – France’s highest administrative court – punished the fact that France failed to notify the European Commission of the subsidy policy in 2008, rather than the nature of the subsidy itself ( see EDEM 28 May 2014 ).

“On 27 March [2014], the EU Commission stated clearly that the level of the subsidy is in line with European requirements, therefore onshore wind-power producers don’t have to refund any subsidies received since 2008,” Lioret said. “However, the subsidy from 2008 to 2014 should have been paid only after the EU Commission’s approval was received – in other words, as a bulk payment after 27 March.”

Since onshore wind-power farms were paid FITs before these were approved by Brussels, the Conseil d’Etat mandated that the FITs be equate to a government loan to wind-power producers. A loan for which interest now needs to be paid to the state by wind-power producers.

The government asked wind-power producers to calculate the amount of interest, Lioret said. “FEE is currently doing the calculations, which depend on the type of loan that is considered. It can be yearly, monthly, or even [a sum of] daily loans – and different interest rates can be applied. It’s difficult to give a precise figure for the total interests at this stage, but we’re talking about tens of millions of euros.”

Meanwhile, onshore wind producers are waiting for the new government decree, reinstating the FITs, to come into force. “The government should have done the new decree earlier,” Lioret said. “The decision of the EU Commission on 27 March was the most important piece, but the new decree now needs to be approved by the Conseil Superieur de l’Energie [CSE – an advisory body to the energy ministry], after having been approved by [the electricity and gas regulator] CRE.”

With CSE’s decision expected in early June, the new decree should finally come into force by the end of this month, Lioret added.

In a statement released shortly after the Conseil d’Etat decision, the French energy ministry affirmed that the new decree ended a long period of uncertainty, which destabilised the wind-power sector. However, the new decree will now enable investment in the sector and create jobs. “Renewable energy must ramp up and new tenders will be launched shortly,” the ministry said.

France has a total 8.2GW of installed offshore and onshore wind-power generation, according to data from the transmission system operator RTE. Riccardo Patrian

By Riccardo Patrian