In late May 2016, the French Environment Ministry adopted
several new Decrees implementing a new regime to transition the
support for renewable energy from feed-in tariffs to a compensatory
fee scheme. Such transition was required by the European
Commission, which considers feed-in tariffs as State aids and
requests a more stringent review of such aids.
The Decrees have been adopted in accordance with Article 104 of Law
of August 17, 2015, on the Energy Transition, which required the
energy produced by renewable energies (e.g., solar, biomass,
hydropower) to replace feed-in tariffs with a compensatory fee. The
compensatory fee replaces the feed-in tariff regime for some
renewable installations. This new mechanism aims at improving the
integration of renewable energies to the electricity market, as
required by the European Commission. The principle of this new
scheme is to allow a producer to sell its electricity directly on
the market, while limiting the risks associated with the volatility
of the market prices.
Decree n° 2016-691 specifies which installations will be
eligible for the compensatory fee and which remain under the
feed-in tariff regime. It should be noted that the feed-in tariff
regime is maintained for small-sized installations and for wind
energy producers that do not elect to benefit from the compensatory
Decree n° 2016-682 sets out the conditions under which the
installations are eligible for the compensatory fee and establishes
the calculation methods and payments: the compensatory fee will be
proportional to the energy produced by the installation and
calculated out of a reference fare, based in particular on an
estimate of the investment and operational costs of a
"sample" installation and a reference market price. It
should be noticed that, in practice, the implementation of such
scheme may allow installations that will perform better than the
"sample" installation used for the determination of the
compensatory fee to actually earn more than they currently do based
on the feed-in tariffs.
The French Environment Ministry stated that "this new regime
provides visibility for the renewable energy sector and allows to
accelerate the development of renewable energies in accordance with
the objective of the transition to other sources of
To date, the sector of renewable energy is awaiting the publication
of the ministerial orders that will determine the details of the
compensatory fee as well as the terms and conditions for each
concerned sector (e.g., wind, solar, biomass, hydropower), which
should define the level of support granted to each concerned
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Join Jones Day and Deloitte for an overview of how this interactive technique can help organizations test their response reflexes, identify capability gaps, and develop and learn to use advanced preparedness techniques.
ESMA published a revised set of Q&As on EMIR on 11 February, the eve of the EMIR transaction reporting go-live date. They include updates and new guidance in several areas, including transaction reporting.
The increased capacities of intermittent renewable sources of energy have subsequently amplified the need for more back up reserves and flexibility available in a system.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).