French scheme to support electricity production from renewables gets EU nod

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A French aid scheme to support renewable electricity production complies with EU State aid rules, the European Commission’s antitrust chief said on July 27, adding that the measure will help France achieve its renewable energy targets without unduly distorting competition and will contribute to the European objective of achieving climate neutrality by 2050.

“This aid measure will stimulate development of key renewable energy sources, and support a transition to an environmentally sustainable energy supply, in line with the EU Green Deal objectives,” EU Commission Executive Vice-President for Competition Policy Margrethe Vestager said. “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,” she added.

According to the Commission, France notified the Commission of its intention to introduce a new scheme to support electricity produced from renewable energy sources, namely to onshore operators of solar, onshore wind and hydroelectric installations.

The scheme grants support to these operators awarded via competitive tenders, the Commission said, noting that, in particular, the measure includes seven types of tenders for a total of 34 GW of new renewables capacity that will be organised between 2021 and 2026: solar on the ground; solar on buildings; onshore wind; hydroelectric installations; innovative solar; self-consumption and a technology-neutral tender.

The support takes the form of a premium on top of the electricity market price, the EU Commission said, adding that the measure has a provisional total budget of around €30.5 billion. 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.

The Commission said it assessed the measure under EU State aid rules, in particular the 2014 Guidelines on State aid for environmental protection and energy, and found that the aid is necessary to further develop the renewable energy generation to meet France’s environmental goals. It also has an incentive effect, as the projects would otherwise not take place in the absence of public support.

Furthermore, the Commission said, the aid is proportionate and limited to the minimum necessary, as the level of aid will be set through competitive tenders. In addition, the Commission found that the positive effects of the measure, in particular, the positive environmental effects outweigh any possible negative effects in terms of distortions to competition. Finally, France also committed to carry out an ex-post evaluation to assess the features and implementation of the renewables scheme.

On this basis, the Commission said it 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 and without unduly distorting competition.

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