France’s wind power sector came a step closer on Thursday to resolving a procedural wrangle over European Union rules on approval of state subsidies that has held back investment in the industry since 2011.
The bloc’s chief legal adviser confirmed that a subsidised “feed-in” tariff announced by France in 2008, to encourage wind power, constituted state aid, so Paris should have notified the European Commission about it in advance.
France’s failure to follow this procedure gave a basis for an anti-onshore-wind power pressure group, Vent de Colere – Wind of Anger – to challenge the feed-in tariff in 2011 in a French court, which turned to the EU for advice.
The resulting lack of clarity has discouraged lenders from providing investment to the sector.
Thursday’s announcement clears the way for France to announce new tariffs again, this time following the necessary notification process.
“The positive point is that we are now going to be able to move to the next step with the immediate launch of a new decree with notification to the European Commission,” said Nicolas Wolff, head of one of France wind power industry lobby.
“We would like the government to react immediately,” he said.
No one at the energy ministry was immediately available to comment.
The EU’s court of justice advocate general Miilo Jaaskinen said in a statement on Thursday the French feed-in tariff system fell within the concept of aid granted by the state or through state resources.
Several steps remain before the government issues a new feed-in tariff decree, which obliges state-controlled power company EDF to buy power generated from wind at rates that will encourage investment in new turbines.
The French court, the Conseil d’Etat, referred the case to the EU Court of Justice in Luxembourg, which will now determine whether the tariffs constitute undeclared state aid. If this is confirmed, the French court is expected to annul the 2008 tariff decree.
Wind power companies have been frustrated by the French government’s refusal to issue a new decree before the EU court decision, expected in 2-3 months, according to industry sources.
France under former president Nicolas Sarkozy set itself a 2020 target to install 25,000 megawatt (MW) of wind power capacity supplying 10 percent of French electricity production.
But only 757 MW of onshore capacity was added to the grid in 2012, bringing the total to 7,449 MW, compared with more than 30,000 MW in Germany.
Wind – onshore and offshore – makes up just over 3 percent of France’s electricity production, which remains heavily reliant on nuclear capacity. (Reporting by Marion Douet, Michel Rose and Muriel Boselli; Editing by Anthony Barker)
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