French PPAs set to double by mid-2021 – wind lobby

Jun 2, 2020 | Montel

(Montel) Power purchase agreements (PPA) will double in France, to 1 GW by mid-2021, as businesses turn to green power to hedge against uncertainty surrounding nuclear supply, the head of wind lobby FEE said.

Uncertainty surrounding electricity prices, driven by the coronavirus crisis, will help double PPA contracts in France, from around 500 MW estimated currently, said Dominique Darne. 

Businesses increasingly wanted renewable energy supplies, and also to shield themselves against potential price rises connected to difficulties the nuclear sector is experiencing, Dominique Darne, head of the business board of France’s FEE, told Montel.

“The gamble with nuclear is that there is a specific [supply] problem for the coming winter,” said Darne, who is also head of Eurowatt Services, an independent renewables supplier, which has PPAs with supermarket group Metro and the bank Societe Generale.

Nuclear output accounts for over 70% of total French power production but supply this winter looks tight due to the knock-on effect on reactor availability of measures to stem the spread of Covid-19.

The measures have forced EDF to cut its nuclear output by 20% this year and reduce it in 2021 and 2022.

There was also a lack of transparency surrounding the reform of the Arenh mechanism governing the regulated sale of EDF’s nuclear output to rivals, he said.

Ahead of the health outbreak, the government was mulling a plan to replace Arenh with new regulations covering the sale of EDF’s entire annual nuclear output on the wholesale market with a price cap and floor.

Fixed price
“The ecological factor is no longer the only deciding factor for businesses; it’s now the price,” said Darne, pointing out that although a PPA tariff was “a little more expensive at the beginning, you have a fixed price.”

“When we (renewables suppliers) invest, we know we can keep our costs steady for the next 20 years, which oil, nuclear and gas can’t do,” he said.

Demand for PPAs has taken off in recent years in Europe, with falling production costs for renewable energies. However, France is only at the beginning of this process.

Reporting by:
Muriel Boselli
muriel@montelnews.com
15:25, Friday, 29 May 2020