The European Commission has approved a $11.64 billion (€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 state aid 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 organized 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.
According to the European Commission, the aid will be grated before December 31, 2025.
“With this €10.82 billion scheme, France can deploy offshore wind capacities faster, in line with the EU Strategy on Offshore Renewable Energy. It will also help France reduce its dependence on Russian fossil fuels, while ensuring that any potential competition distortions are kept to the minimum,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.