Brussels (Brussels Morning) – The European Commission approved a €10.82 billion French scheme to support offshore wind energy. It will aid the transition to a net-zero economy under the State Aid Temporary Crisis and Transition Framework.
The European Commission has consented to a €10.82 billion French scheme to sustain the deployment of offshore wind energy, which will facilitate the transition towards a net-zero economy. The scheme was endorsed under the State Aid Temporary Crisis and Transition Framework (‘TCTF’) assumed by the Commission on 9 March 2023 and revised on 20 November 2023 and on 2 May 2024.
What Are the Details of France’s €10.82 Billion Wind Scheme?
France informed to the EU Commission, under the TCTF, a €10.82 billion scheme to fund renewable offshore wind energy to facilitate the transition towards a net-zero economy. The scheme will operate for 20 years.
How Will the Offshore Wind Farms Be Funded?
In particular, the effort will support the construction and function of two bottom-fixed offshore wind farms: one in the South Atlantic area and another in the Centre Manche 2 zone in Normandy. The South Atlantic wind farm is anticipated to have a capacity of 1000 to 1200 MW and produce at least 3,9 TWh of renewable electricity per year. The Normandy wind farm is anticipated to have a capacity of 1400 to 1600 MW and to develop at least 6,1 TWh of renewable electricity per year.
The aid will be awarded based on transparent and non-discriminatory bidding processes, which will be arranged to select one beneficiary per offshore zone.
What Is the Role of the TCTF in This Scheme?
Under this scheme, the aid will take the formation of a monthly variable premium under a two-way contract for difference (‘CfD’), which will be estimated by comparing a reference price, determined in the tender request of the beneficiary (‘pay as bid’), to the market price for electricity. When the market cost is below the reference price, the beneficiaries will be allowed to receive payments equal to the difference between the two costs. However, when the market price is beyond the reference price, the beneficiary will have to spend the difference between the two prices to the French authorities.
Why Did the EU Approve France’s Offshore Wind Scheme?
The EU Commission uncovered that the French scheme is in line with the requirements set out in the TCTF. In particular, (i) the aid will be awarded based on a scheme with an assessed volume and budget; (ii) the aid amount will be selected through an open, clear, transparent, and non-discriminatory competitive bidding procedure; and (iii) the aid will be given before 31 December 2025.
The Commission figured that the French scheme is necessary, reasonable and proportionate to rev the green transition and promote the development of certain economic actions, which are of importance for the enactment of the Green Deal Industrial Plan, in line with Article 107(3)(c) Treaty on the Functioning of the EU and the requirements set out in the TCTF. On this basis, the Commission authorised the aid measure under EU State aid rules.
