Commission approves €10.82 billion French State aid scheme to support offshore wind energy to foster the transition to a net-zero economy
The European Commission has approved a €10.82 billion French scheme to support the deployment of offshore wind energy, which will help foster the transition towards a net-zero economy. The scheme was approved under the State aid Temporary Crisis and Transition Framework (‘TCTF’) adopted by the Commission on 9 March 2023 and amended on 20 November 2023 and on 2 May 2024.
The French measure
France notified to the Commission, under the TCTF, a €10.82 billion scheme to support renewable offshore wind energy to foster the transition towards a net-zero economy. The scheme will run for 20 years.
In particular, the measure will support the construction and operation of two bottom-fixed offshore wind farms: one in the South Atlantic zone and another in the Centre Manche 2 zone in Normandy. The South Atlantic wind farm is expected to have a capacity of 1000 to 1200 MW and to generate at least 3,9 TWh of renewable electricity per year. The Normandy wind farm is expected to have a capacity of 1400 to 1600 MW and to generate at least 6,1 TWh of renewable electricity per year.
The aid will be granted on the basis of transparent and non-discriminatory bidding processes, which will be organised to select one beneficiary per offshore zone.
Under this scheme, the aid will take the form of a monthly variable premium under a two-way contract for difference (‘CfD’), which will be calculated by comparing a reference price, determined in the tender offer of the beneficiary (‘pay as bid’), to the market price for electricity.
When the market price is below the reference price, the beneficiaries will be entitled to receive payments equal to 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 Commission found that the French scheme is in line with the conditions set out in the TCTF. In particular, (i) the aid will be granted on the basis of a scheme with an estimated volume and budget; (ii) the aid amount will be determined through an open, clear, transparent, and non-discriminatory competitive bidding process; and (iii) the aid will be granted before 31 December 2025.
The Commission concluded that the French scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the Green Deal Industrial Plan, in line with Article 107(3)(c) Treaty on the Functioning of the EU and the conditions set out in the TCTF.
On this basis, the Commission approved the aid measure under EU State aid rules.