France: Conflict between government and green energy producers

The professional unions of renewable energies have decided to challenge before the Council of State the conditions imposed by the government for the return of their profits.

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The professional unions of renewable energies have decided to challenge before the Council of State the conditions imposed by the government for the return of their profits. This petition seeks the annulment of an order of December 28, 2022, setting forth those terms and conditions. This raises the question of how to share the profits from soaring electricity prices between energy producers and the state.

Grouped energy producers

The appeal was filed in February by the Syndicat des énergies renouvelables (SER), France Énergie éolienne (FEE) and Enerplan (representatives of the solar industry), which bring together large operators such as EDF as well as small project developers. These unions reacted to the December order that sets additional conditions deemed unacceptable by the producers. In addition, these conditions are retroactive to January 1, 2022, de-cap payments and set a threshold price that is considered too low to allow producers to pay back in real time and benefit from profit sharing.

Heavy consequences for producers

The “threshold prices lead (…) no longer to a sharing of the value of the energy produced between the State and the producers, in a context of permanently very high electricity prices on the wholesale market, but to a real capture, by the State, of almost all the revenue generated by the sale on the market of the electricity produced”, underlines the appeal. Renewables, and primarily wind power, are expected to bring in 30.9 billion euros in revenue for the state over 2022-23, according to the Energy Regulation Commission (CRE).

The Ministry of Energy Transition remains silent

Mathias Vandenbulcke, director of strategy at FEE, explains that the state “wants to accelerate renewables, but in a context of rising interest rates and raw material prices, project developers need cash to invest!” The Department of Energy Transition declined to comment.

In short, renewable energy producers feel trapped by government-imposed conditions and want to make their voices heard for a fair share of the profits. The appeal before the Council of State will therefore be closely followed by the sector’s players, and the outcome could have important consequences for the future of renewable energy in France.

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