EU Greenlights Massive EUR 10.8 Billion Investment in French Offshore Wind

Business & Finance

July 4, 2024, by Adnan Memija

The European Commission has approved a EUR 10.82 billion French scheme, to support the deployment of offshore wind, in particular the construction and operation of two bottom-fixed offshore wind farms in the country.

The scheme, which will run for 20 years, will support a wind farm in the South Atlantic zone and another in the Centre Manche 2 zone in Normandy.

The South Atlantic offshore wind farm is expected to have a capacity of 1,000 MW to 1,200 MW and to generate at least 3.9 TWh of renewable energy per year.

The Normandy wind farm is planned to have a capacity of 1,400 MW to 1,600 MW and to generate at least 6.1 TWh of renewable electricity per year.

The two wind farms will be awarded through a tender the French government launched in December 2022. The winners of the AO7 South Atlantic and AO8 Centre Manche 2 tender are expected to be announced this year.

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The EUR 10.82 billion aid will come in the form of a monthly variable premium under a two-way contract for difference (CfD) and will be granted before 31 December 2025. The aid will be granted based on a bidding process, organised to select a single beneficiary for each offshore wind zone.

The premium will be calculated by comparing a reference price, determined in the tender offer of the selected developer, as well as by the market price for electricity. The latter will see the developer receive payments equal to the difference between the two prices when the market price is below the reference price but when it is above the reference price, the developer will have to pay the difference to the French authorities.

“With this €10.82 billion scheme, France can deploy offshore wind capacities faster, in line with the EU Strategy on Offshore Renewable Energy. It will also help France reduce its dependence on Russian fossil fuels, while ensuring that any potential competition distortions are kept to the minimum,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

At the end of last year, the European Commission gave the green light to support the construction and operation of two floating wind farms in the Gulf of Lion with EUR 4.12 billion.