Bouncing back from un été pourri – French solar energy
Harry Moncur Executive Search, Built Environment, Permanent...
A (Weather) Forecast for French Solar
Normally it’s common to think of weather as a British obsession (it is), however French has its own wonderful array of idioms covering the weather. Metaphorically, solar energy in France should be Il fait un soleil de plomb, literally “made of lead”, but meant to mean blistering hot. Last year (2019) the government made solar energy a real mission, with significant statements made at the European Solar Manufacturing Council (ESMC) with President Macron vowing a major reindustrialisation of French (and European) solar manufacturing.
Fast forward a year and the solar sector in France is experiencing un été pourri – a rotten summer. This is largely due to the Coronavirus, in Q1 2020 France added 176MW of solar capacity, down 15% on Q4 2019. However despite the impact of the pandemic, the outlook for the solar sector in France is actually very positive.
Effective Tenders & Growing PPAs
The French solar sector is largely blessed by an efficient and effective tender system. Utilising a contract-for-difference-system (Complément de Rémunération), with clear parallels to other European tender system, offers bidders 20 year contracts that at compensates them for the difference between the market price and the tariff proposed in their bid. There also appears to be good levels of bonhomie between developers and the government, with many industry figures praising how well the tenders are run.
The results of this cordiality between stakeholders, speak for themselves – at the latest auction, France awarded 960MW of solar projects of which nearly 68% when to large scale schemes. The organisation and transparency of the process also provides other benefits, it has proactively encouraged the development of brownfield sites and has made the financing of projects easier for the developers.
An interesting development in France has been the emergence of more power purchase agreements (PPAs) for solar. As in other countries, renewable energy technologies are reaching market parity. This is certainly the case for ground mounted solar. Voltalia, has recently secured its fourth large scale solar PPA in France with a 61MW 20 year deal with Auchan retail. Other clients include the retailer Boulanger, state-owned railway SNCF and financial services provider Crédit Mutuel. French firms have been effective at agreeing PPAs overseas, Engie for example has recently created innovative PPA agreements in the UK, Australia and Poland, however it now seems like the PPA has come of age domestically in France now too.
An important aspect of the French solar space is the effort France puts into offering leadership and innovation in solar technology. It is clear that France has ambitions to rebuild its domestic solar manufacturing base, however it is also apparent that integral to this ambition is an intention to make sure that the focus is on innovative design. France has been leading on the EU’s NEXT-CSP project to help improve the efficiency of concentrated solar power. The project is entering its next stage and aims to increase efficiency from 42% to 48% and if successful offers the potential for creating a solar “peaker” plant via the use of thermal energy storage.
Chaleur d’août, c’est du bien partout (In the heat of August everything is fine)
Despite a slow start to the year, the signs are good for the French solar sector. Many countries would be right to cast an envious glance at how well the public sector and private sector cooperate on new schemes, whilst the emergence of a PPA market will only serve to unlock greater solar deployments going forward. If the above trends are supported by a resurgent domestic manufacturing space that prioritises innovative and more efficient solar technology, then it’s hard to see a scenario where France doesn’t achieve its solar aims.