Tenders (Complément de rémunération par procédure de mise en concurrence)

Updated: 07.02.2019

Author: Helena Vidalic

The European State Aid Guidelines require that renewable energy be progressively exposed to market competition. Within this context, the Act on Energy Transition for Green Growth from 17 August 2015 introduced a thorough reshaping of the existing support schemes for renewable energies. To this end the feed-in tariffs, which constituted the main support mechanism so far, shall progressively be replaced with the so-called “compensation mechanism” (mécanisme de compensation). This support consists in allocating a premium tariff to renewable electricity producers on top of the sale price they get on the electricity market, in order to cover the costs of their installations and ensure their profitability (art. 104, loi n°2015-992). 

Depending on the technology and size of the installation, the French regulation foresees that the premium tariff is allocated either through direct guaranteed contracts (“guichet ouvert”) or through bidding procedures. According to the new regulation in force, the bidding procedures may be implemented in two different ways (art. R311-12, code de l’énergie):

  • Either through calls for tenders 
  • Or through a competitive dialogue procedure 

The bidding terms are published in the official gazette of the European Union. Information on current tenders are available on the website of the French regulatory authority: www.cre.fr/documents/appels-d-offres  

Eligible technologies and support requirements

The ministry responsible for energy may use bidding procedures at irregular intervals to reach the targeted production of electricity from renewable sources (art. L311-10, code de l’énergie). In this regard, the multi-annual programming for energy (Programmation Pluriannuelle de l’Énergie) sets out technology-specific targets in terms of total installed capacity to be developed by 2018 and 2023. In order to reach these targets, a provisional timetable was established for technology-specific bidding procedures until 2019 (art. 3, Décret n° 2016-1442). The conditions for tender are described in the invitations to tender (Art. 311-10, Code l’Énergie).

Wind energy

The conditions for tender are described in the invitation to tender (Art. L311-10, Code l’Énergie).

Solar energy

The multi-annual programming for energy foresees regular bidding procedures for the following application segments until 2019 (art. 3, Décret n° 2016-1442):

  • Ground-mounted solar plants: 2 calls per year until 2019; with a total targeted capacity of 1,000 MW per year
  • Rooftop solar plants: 3 calls per year until 2019; with a total targeted capacity of 450 MW per year

The conditions for tender are described in the invitation to tender (Art. L311-10, Code l’Énergie).

Biogas

The multi-annual programming for energy foresees annual bidding procedures for the development of methanisation projects for a total capacity of 10 MW per year until 2019 (art. 3, Décret n° 2016-1442).

The conditions for tender are described in the invitation to tender (Art. L311-10, Code l’Énergie).

Hydro-power

The conditions for tender are described in the invitation to tender (Art. L311-10, Code l’Énergie).

Biomass

The multi-annual programming for energy foresees annual bidding procedures for the development of biomass projects for a total capacity of 50 to 100 MW per year until 2019 (art. 3, Décret n° 2016-1442).

The conditions for tender are described in the invitation to tender (Art. L311-10, Code l’Énergie).

Tender characteristics

Pre-qualification criteria

 In case of a competitive dialogue procedure, the candidates shall be pre-selected on the basis of their technical and financial capacity (Art. L311-10-1, code de l’énergie). The selection criteria are set out in the notice of a competitive public tender, which shall be published in the official gazette of the European Union (art. R311-25-3, code de l’énergie). 

Bidding procedure

According to the new regulation in force, the bidding procedures may be implemented in two different ways, either through calls for tenders or through a competitive dialogue procedure (art. R311-12, code de l’énergie):

  • Call for tenders: the Ministry of Energy chooses the most economically advantageous tender without negotiation, on the basis of objective criteria previously communicated to the candidates in the specification document
  • Competitive dialogue procedure: upon prior selection of candidates according to pre-qualification criteria, the Ministry of Energy shall enter into a dialogue with the candidates admitted to participate in the procedure, in order to define the conditions on the basis of which the candidates are invited to submit an offer. 

Tender constraints

The multi-annual programming for energy establishes an indicative timing for national bidding procedures until 2019. The total capacity to be tendered for each bidding round is limited (art. 3, Décret n° 2016-1442). The volume caps are technology-specific and are defined above, in the technology section.

Pricing rules

The pricing rules are described in the invitation to tender (R311-25-3 and Article R311-13, code de l’énergie). 

Lead time

The time frame between the bidding process and the point in time when the tendered capacity must be commissioned is specified in the tender documents (R311-25-3 and Article R311-13, code de l’énergie). 

Frequency of tenders

The multi-annual programming for energy establishes an indicative timing for national bidding procedures until 2019 for several renewable energy technologies. For more information on the indicative schedule, please refer to the following link (art. 3, décret n° 2016-1442): 

https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=9FFF46A15BE394945C5E711F53779333.tpdila12v_3?cidTexte=JORFTEXT000033312688&dateTexte=&oldAction=rechJO&categorieLien=id&idJO=JORFCONT000033312664

Addressees

Entitled party. According to statutory law, the tenders are open to every person residing in an EU Member State or in a country specified by a relevant international treaty and planning to install an energy plant in France (art. 311-10, Code de l’Énergie).

Obligated party. The electricity suppliers are obliged to both pay the feed-in tariff or the additional remuneration (“complément de rémunération”) and provide the funds for the successful tenderers. The obligated suppliers include EDF (Electricité de France) and private distribution grid operators (art. L311-10 to L311-14, Code de l’Énergie).

Procedure

Process flow and deadlines

The suppliers (EDF and private suppliers) are obliged to conclude purchase agreements with the successful tenderers. They are also obliged to pay the electricity price specified in the tenders (art. L311-10 to L311-14, Code de l’Énergie).

Competent authority

The competent authority is the Ministry of Energy (R311-25-3 and Article R311-13, code de l’énergie).

Degression

The payment terms are set out according to the proposal of the winning tender (art. 311-10 to 311-14, Code de l’Énergie).

Penalties

Amount of the fee

The penalty rules are described in the invitation to tender (R311-25-3 and Article R311-13, code de l’énergie).

Distribution of costs

Consumers

In France, the end consumers bear the costs arising for from the suppliers' (EDF's and private suppliers') obligation to pay for all electricity from renewable sources exported to the grid.

Distribution mechanism

  • Public Service Obligation (PSO – « Contribution au Service Public de l'Electricité »  – electricity suppliers (EDF and private suppliers). Every consumer is obliged to pay a PSO contribution, which covers the additional costs arising from the supply of electricity from renewable sources (see below: Grid operator/supply companies – consumers). Tthe PSO contribution covers inter alia the additional costs arising for the suppliers (EDF and private suppliers) from the payment of the feed-in tariff. The PSO contribution is levied four times a year (L.311-10, L.314-1 et L.121-27, Code de l’énergie).
  • Grid operator/supply companies – consumers. The PSO contribution is paid by the final consumers (art. 121-10, Code de l’Énergie). The exact distribution mechanism of the funds generated through the PSO contribution is specified in articles 121-6 to 121-28 of the Energy Code: Every year, the energy regulatory commission calculates the additional costs before the Ministry of Environment sets the compensation payment per kWh. The transmission or distribution grid operators and the utility companies add this standard amount to the regular grid use charges or electricity price to be paid by the final consumers. The surcharges are transferred to the designated account of the national financial institution Caisse des dépôts. Manufacturing companies consuming up to 240 million kWh per year are exempt from the obligation to pay the PSO contribution if they produce electricity for their own use or sell it to end users for the end users' own consumption. Any further amount of electricity produced is subject to the surcharge. The maximum amount to be paid per plant is € 550,000 ( art. 121-6 to 121-28 , Code de l’Énergie).

France

Further information

  • Ministère de la Tansition écologique et solidaire - Ministry of the Ecological and Inclusive Transition
  • +33 14 081 212 2
  • website

Basic information on legal sources