EU to Fund France with €2 Billion for Developing Offshore Wind Projects
The funding will support 230-270 MW floating offshore wind farm
To support offshore wind projects in France, the European Commission (EC) has approved a €2.08 billion (~$2.2 million) funding which will help the EU meet the objectives under its Offshore Renewable Energy Storage and the European Green Deal.
To date, only small pilot floating offshore wind projects have been developed in France. The funding will support the construction and operation of 230-270 MW floating offshore wind projects off the coast of the South of Brittany, for which France had earlier notified the Commission.
Once completed, the project is expected to generate 1 TWh of renewable electricity annually for 35 years.
The projects will help France meet its target of producing 33% of its energy needs from clean sources by 2030. The scheme is expected to help the country mitigate around 430,000 tonnes of carbon emissions per year.
While the wind farm will commence operation in 2028, the aid will run for 20 years with a total budget of €2.08 billion (~$2.2 million).
The aid will be granted in the form of a monthly variable premium under the model of a two-way Contract for Difference.
The variable premium will be calculated by comparing a reference price, determined in the tender offer of the beneficiary, and the market price for electricity.
When the market price is below the reference price, the beneficiary will be entitled to receive payments equalling the difference between the two prices. However, when the market price is above the reference price, the beneficiary will have to pay the difference between the two prices to the French authorities.
The EC found that the funding facilitates the development of certain economic activities, specifically the production of clean power from floating wind technology, and observed that it has an incentive effect given the beneficiary must take public support to make investments in the floating offshore wind farm.
The Commission further noted that the measure highlights positive environmental changes that outweigh any possible negative effects in terms of distortions to competition and trade in the EU.
European countries have approached the Commission since mid-2022 seeking approval for their respective plans to support renewables production and deployment.
Last October, the European Commission approved a €220 million (~$215.3 million) Spanish measure to support Cobra Facilities & Services in the production of renewable hydrogen.