French Renewable Energy Players Receive €30.5 Billion in Aid Scheme from EC

The French government had proposed a scheme to aid renewable energy producers (solar, onshore wind, hydroelectric) via competitive tenders which the EU has recently approved. The scheme has a total budget of €30.5 billion which will serve eligible energy producers for 5 years

Margrethe Vestager, who leads the European Commission’s competition department speaking at an event. Credit: Paul Voorham

Margrethe Vestager, who leads the European Commission’s competition department speaking at an event. Credit: Paul Voorham

The European Commission has given permission to an aid scheme presented by the French government to support renewable electricity production. The scheme grants support to operators of solar energy, onshore wind energy and hydroelectric plants by means of a competitive bidding process. The scheme has a total budget of around €30.5 billion and will serve eligible French renewable producers for a period of 5 years. France hopes to procure 34 GW of renewables generation capacity by 2026 under the incentive scheme.

The scheme includes 7 kinds of tenders for a total of 34GW of new renewables capacity that will be generated between 2021 and 2026: (i) solar on the ground, (ii) solar on buildings, (iii) onshore wind, (iv) hydroelectric installations, (v) innovative solar, (vi) self-consumption and (vii) a technology-neutral tender. The support takes the form of a premium on top of the electricity market price. The scheme is open until 2026 and aid can be paid out for a maximum period of 20 years after the new renewable installation is connected to the grid.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This aid measure will stimulate the development of key renewable energy sources, and support a transition to an environmentally sustainable energy supply, in line with the EU Green Deal objectives. The selection of the beneficiaries through a competitive bidding process will ensure the best value for taxpayers’ money while maintaining competition in the French energy market.”

The Commission assessed the measure under EU State aid rules, in particular the 2014 Guidelines on State aid for environmental protection and energy. The Guidelines allow the Member States to support the production of electricity from renewable energy sources, subject to certain conditions. These rules aim to help Member States meet the EU’s ambitious energy and climate targets at the least possible cost for taxpayers. The Commission concluded that the French scheme is in line with EU State aid rules, as it will facilitate the development of renewable electricity production from various technologies in France and reduce greenhouse gas emissions in line with the European Green Deal.

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