Renewable energy policy database and support: single

Feed-in tariff (Tarif d´achat)

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” (see corresponding section for more information).

Nevertheless, the current support framework still provides for small installations or non-mature energies to benefit from feed-in tariffs (Art. 1, Décret du 28 mai 2016).

Another important change was introduced by the Act on Energy Transition in favour of a more flexible electricity market in France: Renewable energy producers are no longer obliged to sell their electricity exclusively to the national electricity suppliers. The regulation namely extends the management of the purchase obligation of electricity to other operators than EDF or local distribution companies (Art. L314-6-1, Code de l’Énergie). The first supplier to have obtained an accreditation in October 2016 is Enercoop, a cooperative supplier providing energy from 100% renewable sources. However, this accreditation, which entered into force on 1 January 2017, is limited to 75 purchase contracts for a maximum installed capacity of 100 MW.

Eligible technologies

The Act on Energy Transition for Green Growth has thoroughly modified the former support system for renewable energies from 1 January 2017. Nevertheless, certain installations using hydro, wind, photovoltaic or biogas power sources may still benefit from a feed-in tariff contract. The list of eligible installations is established in article 1 of the Decree of 28 May 2016. The general provisions of this article are particularised by orders (arrêtés) for each technology.

Wind energy	Only following plants are eligible: Floating wind energy installations which won a call for projects either in the framework of the “Investments for the Future Programme” (programme des investissements d'avenir) or as part of the "New Entrant Reserve" from the European Commission. The installation shall be located in the maritime public domain or in the Exclusive Economic Zone of metropolitan France (art. 1 Décret du 28 mai 2016); Wind energy plants located in an area particularly exposed to cyclonic risk and equipped with a device for forecasting and smoothing electricity production (art. 1 Décret du 28 mai 2016).
Solar energy	Eligible with the following restrictions: Only plants installed on buildings whose installed capacity does not exceed 100 kW are eligible (art.1, Décret d 28 mai 2016).
Biogas	Eligible with the following restrictions (Art. 1, Arrêté du 13 décembre 2016 biogaz): The plant shall produce biogas through the methanisation of non-hazardous waste and raw vegetable matter The installation shall be located in continental metropolitan France The installed capacity of the plant shall be less than 500 kW
Hydro-power	Eligible under the following conditions: Only plants whose installed capacity does not exceed 500 kW are eligible (art. 12, arrêté du 13 décembre 2016 hydro; art. D314-15, Code de l’Énergie)). Only plants that qualify under one of the following categories are eligible (art. D314-15, Code de l’Énergie): Existing and new installations that generate electricity from tidal or wave energy, marine current turbines, and run-of-river plants. New turbines drived by minimum water flow originating from a running hydro power plant holding a hydroelectric concession. Only plants which have not benefitted from another public support scheme for their construction are eligible (Art. 12, arrêté du 13 décembre hydro).

Amount

The orders for the specific technologies (arrêtés) determine each the feed-in tariff for a certain source of energy. The tariffs are guaranteed minimum payments, which may be increased by a premium. The tariff rate depends on the costs of investment and operation, which arise for the plant operators but are to be borne by the suppliers. In addition, plant operators may receive a premium, which depends on the amount of electricity exported and is intended to reflect the degree to which this electricity helped achieve the national energy targets (art. L 314-7, Code de l’Énergie). Plants located in the French oversea departments and collectivities (DOMs and COMs) and photovoltaic installations in Corsica are subject to special tariffs.

Wind energy	For the production of electricity from floating wind energy installations which won a call for projects either in the framework of the “Investments for the Future Programme” (programme des investissements d'avenir) or as part of the "New Entrant Reserve" from the European Commission: The amount of the feed-in tariff is defined in the course of the call prodecure. For the production of electricity from wind energy plants located in an area particularly exposed to cyclonic risk and equipped with a device for forecasting and smoothing electricity production: €ct 23 per kWh for all plants during the first 10 years and then between €ct 5 and 23 per kWh for the next five years, depending on the overall time of operation per year (Annex 1, Arrêté du 8 mars 2013)
Solar energy	The tariff applies to photovoltaic and thermodynamic installations and plants below a maximum power capacity of 100 kW fixed on buildings. The tariffs depend on the type and the total capacity of the installation, without distinction of the use of the building. Every quarter, the degression coefficients Sn and Vn will be adjusted to the number of grid connection requests adopted in the previous quarter (Arrêté du 9 mai 2017 soleil). The French regulatory authority will publish the new coefficients and the resulting changes in tariff levels online approx. 3 weeks after the end of each quarter (art. 14 Arrêté du 9 mai 2017 soleil). The tariffs are published at the following addresses: www.cre.fr/operateurs/producteurs/obligations-d-achat
Biogas	The amount of the feed-in tariff s is set as follows (Annex 1, Arrêté du 13 décembre 2016 biogaz): Biogas plants with a capacity of ≤ 80 kW: €ct 17,5 per kWh Biogas plants with a capacity of ≥ 500 kW: €ct 15 per kWh The values for biogas plants between 80 kW and 500 kW are calculated by linear interpolation. Moreover, a bonus of €ct 5 per kWh can be granted for biogas plants using a share of at least 60% of livestock manure (Annex 1, Arrêté du 13 décembre 2016 biogaz). Please note: from 1 January 2018 onwards, the amount of the feed-in tariff shall be decreased by 0,5 % on a quarterly basis (Annex 1, Arrêté du 13 décembre 2016 biogaz).
Hydro-power	Existing and new installations that generate electricity from tidal or wave energy, marine current turbines, and run-of-river plants with a drop height over 30 meters (Annex 1, arrêté du 13 décembre 2016 hydro): Plants located in a non-interconnected area: € 120/MWh Plants located in interconnected areas and Corsica: between € 88/MWh in summer and € 166/MWh in winter Existing and new installations that generate electricity from tidal or wave energy, marine current turbines, and run-of-river plants with a drop height up to 30 meters (Annex 1, arrêté du 13 décembre 2016 hydro): Plants located in a non-interconnected area: € 132/MWh Plants located in interconnected areas and Corsica: between € 96/MWh in summer and € 182/MWh in winter New turbines drived by minimum water flow originating from a running hydro power plant holding a hydroelectric concession (Annex 1, arrêté du 13 décembre 2016 hydro): Plants located in a non-interconnected area: € 80/MWh Plants located in interconnected areas and Corsica: between € 58/MWh in summer and € 110/MWh in winter

Addressees

Procedure

Process flow	The suppliers and the grid operators are obligated by law to enter into purchase agreements with the operators of renewable energy plants (obligation to conclude agreements). Due to the agreement concluded, the plant operator is contractually entitled to payment for the electricity he produces (art. L314-1, Code de l’énergie).
Competent authority	The competent administrative authority is the Ministry of Energy or the regional prefect, depending on the situation.

Degression

The decrees on the feed-in tariffs for the single technologies provide for the tariffs for existing plants to be inflation-indexed (coefficient "K"). Only the tariff levels for solar energy installations will be adjusted every quarter to the grid connection requests adopted in the previous quarter (Annex 1 Arrêté du 9 mai 2017 soleil). In addition, a certain percentage of each tariff is linked to a degression index (coefficient "L"). This adjustment is made annually on the day the purchase agreement was concluded. The index takes into account the index of labour costs per hour and the index of industrial production costs. The indexed percentage of the tariff is 20% to 60%, depending on the technology.

Wind energy	For wind energy installations located in a cyclonic area, the percentage of the tariff that is subject to reduction (coefficient "L“) is 60% (Art. 7 Arrêté du 8 mars 2013).
Solar energy	The percentage of the tariff that is subject to reduction (coefficient "L“) is 20% (art. 9 Arrêté du 9 mai 2017 soleil).
Biogas	The percentage of the tariff that is subject to reduction (coefficient "L“) is 50% (Annex 1, Arrêté du 13 décembre 2016 biogaz).
Hydro-power	The percentage of the tariff that is subject to reduction (coefficient "L“) is 50% (Annex 4, arrêté du 13 décembre 2016 hydro).

Cap

Eligibility period

Distribution of costs

Consumers	In France, the end consumers bear the costs arising from the suppliers' obligation to pay for 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). Among other things, the PSO contribution covers the additional costs arising for the suppliers from the payment of the feed-in tariff. The PSO contribution is levied four times a year (art. 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. L121-10, Code de l’Énergie). The exact distribution mechanism of the funds generated through the PSO contribution is specified in articles L121-6 to L121-28 of the Energy Code: 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 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. L121-6 to L121-28, Code de l’Énergie).

Consumers

In France, the end consumers bear the costs arising from the suppliers' obligation to pay for 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). Among other things, the PSO contribution covers the additional costs arising for the suppliers from the payment of the feed-in tariff. The PSO contribution is levied four times a year (art. 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. L121-10, Code de l’Énergie). The exact distribution mechanism of the funds generated through the PSO contribution is specified in articles L121-6 to L121-28 of the Energy Code: 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 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. L121-6 to L121-28, Code de l’Énergie).

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