France renewable energy policies

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1 France renewable energy policies Louise ORIOL Renewable Energy Office Ministry of Environment, Energy and the Sea 1 st September 2016

2 Key energy figures about France Total final energy consumption (2014): 164 Mtoe Electricity production in 2015 : 546 TWh

3 Where do we stand in 2014? Share of renewable energy sources (RES) in the final energy consumption from 2005 to 2014 and path to achieve 2020 objectives RES goals : 27% electricity 33% heating and cooling 10.5% transport Biofuels Other renewables sources - heating Heat pumps Solid biomass Other renewables sources - power Wind power Hydropower

4 4 Energy transition for green growth Act (2015) Set clear and ambitious goals :

5 Promote renewable energy, to create a balanced mix In 2015, 16,3% of the energy consumed was of renewable origin. The aim is to raise this to 23% in 2020 and 32% in AMBITIOUS GOALS Double the share of renewables in the French energy system over the next fifteen years Promote the improved integration of renewable energy sources into the electrical system via new support mechanisms. Revision of support schemes for renewables (electricty sector) Acceleration of grid connection for electric renewable energy production sites Simplification of procedures : single permitting Facilitating investments in RES projects for local communities : - Municipalities are able to acquire shareholdings in limited companies whose corporate purpose is the generation of renewable energy.

6 RES support mechanisms for each sector Electricity Heating and cooling Transport Gas Feed-in-tariffs Heat Fund through regional aids or call for projects General tax on Polluting activites FIT for biomethane Feed-inpremiums (new) Energy transition tax credit Tax relief for biofuel (ended in 2015) 0% interest loan Tendering schemes Energy saving certificate scheme Ecological bonus for low carbon vehicles Tenders (new) Support for innovation through several calls for projects addressing different levels of maturity Regulatory measures for new buildings : - set energy efficiency standards (<50 kwh/m²/year) - impose that 5 kwh/m²/year are produced from RES

7 Support for innovation Innovation is mainly financed by the Investments for the Future Fund Innovative projects regarding renewable technologies are financed at each stage of maturity through different programs : Calls for very low TRL projects (subsidies for k ) Calls for pilot/demonstration projects (loans with low interest rates + subsidies for projects from 1 to 20 M ) : Examples of calls in the electricity sector : - Floating offshore wind (projects under examination, 2 projects already selected) - Marine current energy (on-going) - Storage technologies (on-going) - Other renewables (PV, solar thermal, onshore wind hybrid projects) (on-going) Special calls for small companies/start-ups in order to help them develop an innovative product/concept (subsidies for k ) 7

8 Focus on Electricity The objective by 2030 is to have 40% of renewable electricity in the production mix New targets for each renewable energy sources (RES) set in 2016 Support mechanisms are implemented in order to achieve these targets 8

9 Support mechanisms for electricity Small installations (<1MW) : Direct contracting Contract with compelled operators Reference price set for each eligible technology Medium to large scale installations (> 1MW except PV and small hydro) : Tender procedures Pay-as-bid mechanism Selection mainly price-based + other criteria (environmental criteria or innovation) Can be launched as long as the targets are not met Feed-in-tariffs (exist since 2000s) Feed-in-premiums : market price + premium since 2016 Feed-in-tariffs (exists since 2003) Feed-in-premiums since

10 Support mechanisms Tenders are especially appropriate for renewable categories with one of the following characteristics : Information asymmetry regarding the cost of a given technology (ex : PV) Management of conflicts over the use of land and resources (ex : high-capacity biomass) Scarcity of available areas (ex : offshore wind) Direct contracting is better suited for : Small-scale installations (ex : residential PV, biogas) Mature sectors for which the costs are relatively well known and stable (ex : onshore wind) For sectors with numerous potential development sites and limited conflicts of use (ex : PV, onshore wind, biogas) 10

11 11 Thank you very much for your attention Contact : louise.oriol@developpement-durable.gouv.fr To find out more : Ministry of environment, energy and the sea website :

12 ANNEXES 12

13 Technology support overview (from 2016) Feed-in-tariff (FIT) Feed-in-premium (FIP) Tenders (T) Capacity (kw) Renewable Energy Sources 100 < 300 < Hydropower FIT FIP Waste incineration Biomass FIP T (FIP) Biogas from waste water treatment plant and landfill Biogas (others) FIT FIT Geothermal power FIP Gas cogeneration FIT FIP > 1000 T (FIP) FIP AO (CR) T (FIP) Solar PV Onshore wind Energies marines Offshore wind FIT T (FIT) T (FIP) FIT FIP FIT (demonstration projects only) T (FIP) 13

14 14 Feed-in-premiums (FIP) Feed-in-premium scheme (or contract-for-difference) /MWh Tariff (regulated or set by the tender) Wholesale market price Premium received Market revenues This amount has to be reimbursed by the producer

15 Comparison of the two schemes /MWh Tariff (regulated or set by the tender) Wholesale market price Feed-in- Tariff Premium received Market revenues Feed-in-tariff scheme Feed-inpremium scheme 15

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