The World's #1 Renewable Energy Network for News, Information, and Companies.

EU Concludes French Feed-in Tariffs for Wind Energy Permissible

In a potentially far-reaching decision, the European Commission has decided that the French system of feed-in tariffs for wind energy on land is not excluded under prohibitions against “state aid,” and is therefore permitted under European Union (EU) regulations.

The long-awaited decision couldn’t come at a better time. Though the decision is consistent with past EU rulings on feed-in tariffs, recent comments by the Commission’s Directorate General for Competition against feed-in tariffs (FITs) has signaled a return to FIT bashing by the Commission’s powerful bureaucrats. This had put the decision on French wind FITs in doubt.

The positive outcome in this case demonstrates that not only are feed-in tariffs for wind energy permissible, but — by extension — wind tariffs differentiated by wind turbine performance are also permissible.

France and Germany both use wind tariffs that are differentiated by wind resource intensity. Wind turbines in areas with low to moderate winds are paid more per kilowatt-hour than wind turbines in windy regions. Both countries use these differentiated tariffs to disperse wind development geographically. This not only spreads economic opportunity to all regions, but it also reduces land use conflicts when wind development is concentrated only in the most windy areas along the coast or on mountaintops.

The decision follows a European Court of Justice ruling in December of last year that the French system was state aid. Most forms of “state aid” are prohibited within the EU as inimical to free cross-border trade, the purpose of the Union.

The case had been brought by an anti-wind energy lobby group, Vent De Colère, in hopes of stopping the growth of wind energy in France. While the two decisions appear contradictory, they are internally consistent. The Court’s ruling was based on exemptions to certain industries from the surcharge (Contribution au Service Public de l'Electricité" or CSPE) on ratepayers used to pay for the feed-in tariffs. The Court ruled that the exemption from the CSPE to these industries was state aid.

The Court had previously ruled in the PreussenElektra case challenging Germany's original feed-in tariff, the Stromeinspeisungsgesetz, that the policy did not constitute prohibited state aid. (The former PreussenElektra now goes by the moniker E.ON.) The ruling has since been upheld in a similar challenge to Austria's feed-in tariffs.

The Court ruled in these cases that state aid is defined  in the treaty of union “as “advantages granted directly or indirectly through State resources.” They went on to explain that states can grant advantages as along as they are not from “State resources,” that is funds collected from taxpayers (or, presumably, not collected from taxpayers in the form of tax credits) and distributed by the state. (State aid from a state’s monetary resources meets the classic definition of a subsidy.) Requiring a utility to purchase renewable energy at a fixed-price set by the state is not the same as paying for the electricity from state resources, and is, therefore, not state aid, and is permissible.

Toby Couture, one of the world’s leading authorities on feed-in tariffs has written about the EU’s definition of state aid and where FITs fall in this verbal landscape in one of his Analytical Briefs. The Commission’s ruling is consistent with its previous decisions.

Though analysts, such as Couture, anticipated a decision in favor of the French wind tariffs, the legal uncertainty in France accomplished what Vent De Colère could not do legitimately: stop new wind projects from proceeding. The state aid case coupled with new discriminatory policies toward wind energy have cut the growth of French wind energy nearly in half from that in 2010. In the past two years, wind development in France has fallen behind Great Britain, one of Europe’s renewable energy laggards. In 2013, France installed only one-third as much wind energy as Britain.

Lead image: Wind turbines via Shutterstock

RELATED ARTICLES

GE Digital Wind Farm

GE Introduces Digital Wind Farm that Could Boost Production 20 Percent, Re-ignites Alstom Buyout Talk

Meg Cichon, Associate Editor General Electric (GE) is pushing its wind farms to join the big data revolution with its new Digital Wind Farm, announced this week at Windpower 2015 in Orlando, Fla. amidst talk that its $15 billion offer to buy Alstom’s p...
Wind turbine

Bigger Wind Turbine Towers = Bigger US Development Opportunity

Meg Cichon, Associate Editor Wind energy already accounts for about 5 percent of U.S. electricity generation, which crowned the nation as the global leader in wind production late last year. There is now more than 65 gigawatts (GW) of capacit...
Wind turbines

Wind Energy Is Crucial in the Fight Against Climate Change, Says US Energy Secretary

Meg Cichon, Associate Editor

The opening general session at Windpower 2015 marked the first appearance by an U.S. energy secretary at the show, “which is surprising,” said current energy secretary Ernest Moniz, “but better late than never.”

Renewable Power Can Now Flow All Over Europe

Rachel Morison and Weixin Zha After almost two years of delays, Germany, France and their neighbors in central-western Europe connected their electricity markets on Wednesday under a system that lets prices dictate where power flows between countries. F...
Paul Gipe has written extensively about renewable energy for both the popular and trade press. He has also lectured widely on wind energy and how to minimize its impact on the environment and the communities of which it is a part. For his efforts,...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in Brazil – in partnership with GWEC, the Global Win...

Brazil is one of the most promising markets for wind energy.  Ranke...

Energy Storage USA 2015

Energy Storage USA is the leading conference in the United States focuse...

Wind Power Central America

Wind power projects are expected to reach 46GW of total installed capaci...

COMPANY BLOGS

SunEdison Expands Residential Market Offerings with New PPA, Sales ...

SunEdison has largely focussed on the commercial and utility-scale solar...

Are You Ready for a Natural Disaster?

Guest post by Jenna Clarke  Living in the Shenandoah Valley of Virg...

Deadline for Inclusion in Solar Power World's Top Solar Contractors...

UPDATE: The official deadline for the Solar Power World T...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS