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European Commission approves €2bn fund for French offshore wind

By: Tom Russell 13/02/2023 European Commission

General Windfarms

The European Commission has approved, under EU State aid rules, a €2.08 billion French measure to support offshore wind electricity production in France. The measure aims to contribute to achieving France's energy and environmental targets, as well as the objectives relating to the EU's Offshore Renewable Energy Strategy and the European Green Deal.

France notified to the Commission its intention to support the construction and the operation of a floating offshore wind farm in the sea off the coast of the South of Brittany. The aid measure, which will run for a period of 20 years starting of the operation of the wind farm in 2028, will have a total maximum budget of €2.08 billion.

The floating offshore wind farm supported by the measure will be the first commercial project of this kind in France. It is expected to have a capacity of 230 to 270 MW, and to generate 1 TWh of renewable electricity per year for a period of 35 years.

The beneficiary of this measure will be selected through a transparent and non-discriminatory bidding process, where bidders will compete mainly on the basis of the amount of aid per MW of installed capacity. The beneficiary is planned to be designated in the second semester of 2023.

The aid will be granted in the form of a monthly variable premium under the model of a two-way Contract for Difference. The variable premium will be calculated by comparing a reference price, determined in the tender offer of the beneficiary (“pay as bid”), and the market price for electricity. When the market price is below the reference price, the beneficiary will be entitled to receive payments equal to the difference between the two prices. However, when the market price is above the reference price, the beneficiary will have to pay the difference between the two prices to the French authorities.

The measure aims to help France meet its target of producing 33% of its energy needs from renewable sources by 2030. Last year French President Emmanuel Macron raised the country's offshore wind target in support of its energy revolution. Macron set a goal of 40 GW of offshore wind in operation by 2050, citing that this would be around 50 projects. Annual tender volumes were also raised form 1 to 2 GW from 2025 to meet this goal.

The announcement was followed by the country's first commercial-scale offshore wind farm, the 480-MW Saint-Nazaire project, start full operations in November 2022. The project is expected to generate the equivalent of 20% of the Loire-Atlantique’s electricity consumption.

For more information on offshore wind farms worldwide, click here.

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European Commission approves €2bn fund for French offshore wind

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