The French government announced last week that it will launch in
May 2011 a tender for 10 billion Euros of offshore wind farms with
a total capacity of 3000 megawatts (MW), stretching along the
French coast. The tender for the construction of around 600 wind
turbines is the first to be announced as part of the
government's plans to increase French offshore wind energy
capacity to 6000MW by 2020.
To read more on this announcement in French, please click here.
The tender was originally due for launch at the beginning of September but has been delayed due to the need for further consultation to determine the area of the site off the Brittany coast. The French government has now identified five offshore sites for development, which are situated along the stretch of the Atlantic and English Channel coastlines between Saint-Nazaire (Loire-Atlantique) and Le Tréport (Seine-Maritime).
Wind power is the most widespread source of renewable energy in France, with a total volume of investment of around $4.8 billion. In 2009 alone, French authorities granted construction permits for onshore wind power projects representing a total capacity of 4000MW. However, France lags behind the rest of Europe when it comes to offshore wind projects and these ambitious plans will help France to catch up with European leaders such as Germany and the UK. For more on the progress of wind power in France, please click here.
Bidders will be required to submit a plan that includes a proposed rate for purchase by EDF of the electricity generated. Currently in France purchase rates are fixed at 130 Euros/megawatt-hour (MWh) for the first 10 years of the project and between 30 and 130 Euros/MWh for the following 10 years, but according to some investors these rates are too low to ensure profitability. The proposed rate will be one of the key criteria for selection, along with the extent of the bidder's understanding of the technical and environmental conditions of construction.
Following selection in 2012, there will be a "risk removal" period of 18-24 months during which preferred candidates will be asked to confirm the feasibility of the projects at their proposed price. This means that the first turbines will not be completed until 2015.
The scale of this opportunity is bound to attract the heavy-weights of the European renewables market, as well as increasing the involvement of French industry in the sector. It will be important for these investors to ensure that they are armed with the necessary local knowledge to give their bids the best chance of success.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 01/02/2011.