France’s EUR 2.08 Billion Aid for Floating Offshore Wind Project Gets EU Nod

Business development

February 14, 2023, by Adnan Memija

The European Commission (EC) has approved, under EU State aid rules, a EUR 2.08 billion measure to support the construction and operation of a floating offshore wind farm in France.

The floating offshore wind project will be located off the coast of South Brittany and is expected to have a capacity of 230 MW to 270 MW.

The project, which will be the first commercial-scale floating offshore wind farm in France, is planned to generate 1 TWh of renewable electricity per year for a period of 35 years.

The approved measure will run for 20 years, starting with the operation of the wind farm in 2028, and will have a total maximum budget of EUR 2.08 billion.

The aid will be granted in the form of a monthly variable premium under the model of a two-way Contract for Difference (CfD).

The variable premium will be calculated by comparing a reference price, determined in the tender offer of the beneficiary (“pay as bid”), and the market price for electricity.

When the market price is below the reference price, the beneficiary 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 beneficiary of this measure will be selected through a bidding process where bidders will compete mainly on the basis of the amount of aid per MW of installed capacity. The beneficiary is planned to be selected in the second semester of 2023.

The location of the first commercial-scale floating wind farm was picked in September 2022. The project will be built more than 20 kilometres from Pointe des Poulains, a peninsula located at the northwestern end of Belle-Île.

The measure aims to help France meet its target of producing 33 per cent of its energy needs from renewable sources by 2030.

In February last year, French President Emmanuel Macron revealed that France will have around 40 GW of offshore wind capacity in operation by 2050, stating that this would be around 50 projects.