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March 7, 2018 - Source: King & Spalding Energy Newsletter

Good news at last for the development of offshore wind projects in France

While France had launched in 2011 a very ambitious offshore wind farm development program, aiming to reach 6 GMW of wind turbine installations at sea and of marine energies by 2020, the projects awarded in 2012 and 2014, following two calls for tenders (Round 1 and Round 21), for a total capacity of almost 3 GW, have progressed with great difficulty. The commissioning of the first project, which was originally scheduled for 2020, has now been postponed by two or three years.

In addition to commercial and pricing issues, one of the major reasons of such difficulties was the challenges to the various administrative authorizations granted for the development of the projects. Recent court decisions have dismissed the various challenges, thus unblocking the development of the projects and, hopefully, reducing the opponents’ will to challenge future projects.

Moreover, the authorities seem to have learned from the past, as several changes in the regulatory framework have been implemented or are about to be implemented, with a view to give an impetus to future projects.

Several claims rejected

The authorizations granted for the development of Round 1 projects have been systematically challenged by various stakeholders, in particular associations for the protection of the environment. Indeed, although wind farms generate clean energy, they raise important environmental concerns, such as impact on fauna and flora, impact on the landscape, etc.

A decree was enacted on 8 January 2016 in order to overcome the significant delays caused by such challenges.2 This decree notably provides for a two-tier jurisdiction mechanism for all claims against the various authorizations granted in relation to offshore renewable energy generation and transportation facilities, instead of the usual three tiers of proceedings; centralizes these claims with a single specialized court (the administrative court of appeal of Nantes – “Nantes ACA”); and provides for a 12-month time limit for the court to render its decisions.

The impact of the decree of 8 January 2016 was felt in 2017, in respect of three challenges brought by anti-wind and environmental associations against the authorizations granted by the relevant State representatives pursuant to Article L. 214-3 of the Environment Code (i.e., authorizations granted in respect of facilities, buildings, works and activities that have an impact on water).

These challenges were brought against three projects developed by a consortium comprising EDF EN and Enbridge (and wpd Offshore, in respect of the Fécamp project). The claimants’ main assertions related to the defects of the environmental impact assessment and of the public enquiry; and the detrimental impact of the projects on Natura 2000 sites (i.e., those sites designated by EU member States in accordance with EU directives which aim at the protection of the most threatened and vulnerable species and habitat) and on the environment, more generally.

The Nantes CAA rejected these challenges.3 Notably, the court held that the environmental impact assessments were complete and addressed all of the relevant aspects and that the conditions set out by the various authorizations for the implementation of the projects were sufficient to prevent any detrimental impact on the Natura 2000 sites and the environment.

Importantly, the Nantes CAA has rendered its decisions within the 12-month limit (two of the decisions have been rendered 10 months after the filing of the challenge, and one decision shortly before the expiry of the 12-month limit). This is despite the fact that there would have been no sanction for the court for failing to comply with the 12-month time limit and one might have expected that the time limit would have been exceeded given the complexity and sensitivity of the projects.

The Nantes CAA has also ruled in favour of the developer of the Saint-Nazaire project in an appeal4 brought by a local residents and an environmental association against a decision of the administrative tribunal of Nantes5 seeking to obtain the cancellation of the award decisions taken by the ministers in respect of the Saint Nazaire tender and of the decision to grant the power generation license to the winning bidder.6 The court held that the claimants had no legal interest for bringing such proceedings, given that the decisions to award the project and to grant the power generation licence did not themselves give the winning bidder the right to build and operate the project, such right being granted through a different authorization, that granted pursuant to Article L. 214-3 of the Environment Code.

Despite these favorable decisions, the consortium suffered new setbacks, as new challenges have been brought against the authorizations for the occupancy of the public maritime domain granted to these projects in the beginning of 2017. These challenges should delay the projects by at least another 12 months.

The Nantes CAA has also rejected a challenge in relation to the award of the Saint Brieuc project.7

The available court decisions allow us to draw two conclusions. First, the arguments put forward by the claimants were not substantiated. However, the large number of grounds raised in their challenges and their focus on points of detail rendered the proceedings quite complex. Second, these decisions show the unwavering determination of the claimants and the need for developers to carefully conduct their environmental impact assessments and pay attention to the modalities of the public consultation, which is organized and supervised by the administration.

New regulatory framework implemented for the Dunkirk tender 

The Dunkirk project (with a power generation capacity between 250 and 750 MW) is the first project to be tendered as part of Round 3, the call for tender having been launched on 16 December 2016. The Round 3 tender comes within the framework of the implementation of the multi-annual energy programme, which revised the previous target and set out the plan for the development of 3GW of offshore wind capacity by 2023, with further 3GW in the pipeline post-2023.

An offshore wind project off the island of Oléron has been submitted to public consultation prior to a call for tender, which could be launched in 2018.

The Round 3 projects are tendered pursuant to a new procedure set out by a decree of 17 August 2016.8 The procedure takes place in three phases. The first phase involves the pre-selection of applicants on the basis of their technical and financial capacities. During the second phase, the selected applicants are invited to a “competitive dialogue”. The third phase involves the bids’ submission, on the basis of the terms of reference issued by the minister in charge of energy at the end of the competitive dialogue. The purpose of this competitive dialogue is to clarify the specifications and to allocate responsibilities during the wind farm construction and operating phases.

The main differences with the Round 1 and Round 2 tenders are the following:

  • during the dialogue phase, the State will provide the pre-selected applicants with the results of the technical zone description studies that it will have conducted. In contrast, Round 1 and Round 2 projects provided for a 18 or 24-month period after the award (the “risk mitigation period”) during which the winning bidders, themselves, were expected to carry out various studies (meteorological, geotechnical, geological, topological surveys, UXO assessment, etc.). The purpose of the risk mitigation period was to allow the winning bidders to confirm their technological choices and their bid prices. The fact that the winning bidders had to conduct the studies after the award has been seen as a factor that led to the increase of the bid prices;
  • in Round 1 and Round 2 projects, the selection criteria were the price (40 %); the industrial component (i.e., reliability of the industrial production capacity, placement choices and logistics processes serving to minimise the disturbances and risks resulting from the transportation operations, etc.) (40%); and the impact on the environment and the pre-existing activities (20%). The new criteria, classified in descending order of importance, are the price offered, the optimisation of occupancy of the zone and the extent to which environmental issues have been taken into account. Local content does not seem to be as important as it was in the first two rounds, however, the consultation document for the Dunkirk tender provides, in general terms, that the project must contribute to local economic development.

New measures aiming at facilitating the financing of offshore projects

Law no 2017-1839 of 30 December 2017 provides for several measures in relation to the grid connection of offshore wind farms, aimed at facilitating project financing.

The grid connection process in relation to the Round 1 projects demonstrated that the mechanism put in place for these projects, whereby the costs in relation to studies and connection works were borne in full by the operator of the wind farm, resulted in a significant increase of the electricity purchase price proposed by the bidders due to the high risk they were bearing.

Several measures have been taken since 2015 to cope with this issue.

In 2015, the law on energy transition provided that connection works could not exceed 18 months, subject to the payment of an indemnity by the transmission system operator (“TSO”).9

In 2017, a law provided that the indemnity to be paid by the TSO would be covered, partially or in full, through the tariffs for the use of the electricity transmission and distribution networks, paid by all electricity consumers.10 The indemnity is covered partially by these tariffs when the cause of the delay is attributable to the TSO and in full when the cause of the delay is not attributable to the TSO.

A decree of 26 April 201711 provided for specific conditions as to the scope of the indemnity due to offshore wind farms developers. This decree provides that the indemnity shall cover both the financing costs and the extra costs relating to the construction of the facility. Pursuant to the decree, the developer is to receive monthly an amount calculated on the basis of the facility’s output and the status of completion of the connection works, the balance between the monthly amounts received and the actuals costs incurred being calculated on an annual basis. Such indemnity is to be paid for a maximum period of 3 years and is capped. For example, the indemnity to be paid to a developer in respect of a 500 MW facility that is not able to feed electricity into the grid due to the delay in connection works is capped at EUR 150 million per year during a 3-year period.12

Through the law of 30 December 2017, France took a step further in facilitating the conditions for project development for all projects for which a call for tender had been launched after 1 January 2016. Several measures have been provided in this respect.

First, the TSO shall bear the costs of connection works as specified in the tender specifications or as defined by the Minister of Energy, including the costs incurred in case of cancellation of the tender. The selected bidder shall, however, bear those costs relating to the changes to connection works it has initiated, as well as the ones due to its default.13

Second, connection works need to be completed by the date set out in the tender specifications, determined by the State after consultation with the TSO. In case of delay in the completion of such works, the developer will be indemnified by the TSO pursuant to conditions to be set out by a decree yet to be published.14

Third, the TSO shall indemnify the wind farm’s developer in case of damages or malfunctions of the connecting facilities (whether located offshore or onshore) that could result in reduced electricity generation by the wind farm. The conditions for the payment of the indemnification, as well as cases in which the indemnification will be excluded, will be set out by a decree yet to be published.

It is expected that these measures will accelerate the development of the projects, and will contribute to the reduction of the price to be paid for the electricity generated by offshore wind projects.

Simplification measures 

A draft law tabled with the Parliament on 27 November 2017 enables the Government to adopt through governmental ordinances various measures to simplify the procedures and authorizations related to offshore wind projects. The Government is notably authorized to amend the various legislations to provide that:

  • the environmental authorization and the authorization required to perform an activity on the continental shelf or the exclusive economic zone will be granted to the State prior to the selection of the winning bidder in an offshore tender and will be assigned to the winning bidder after the selection;
  • the applications in an offshore tender amount to applications for authorization for the occupancy of the maritime public domain and the decision designating the winning bidder of such tender will imply the granting of an authorization for the occupancy of the maritime public domain;
  • the expropriation procedure applicable in case of extremely urgent cases will apply to the electricity public networks.

Plan for doubling France’s wind power capacity within five years 

The French Government has unveiled on 18 January 2018 a ten-point plan to accelerate the development of wind power, aimed at doubling the country’s wind power capacity within five years. While this plan relates to both onshore and offshore wind projects, two measures are expected to benefit offshore projects.

First, this plan provides that claimants will be prohibited from adding new procedural or substantive grounds in the claims filed with the courts in relation to wind farm projects, once a 2-month period has elapsed after the submission of their claim.

Second, this plan foresees the removing of the authorization mechanism for the connection works of offshore wind farms. This authorization, as any other administrative authorization, may be challenged by third parties, such challenged giving rise to additional delays in the projects’ development. It has been considered that this authorization, which aims at checking the works’ technical compliance, was not indispensable, as the administration could check the works’ technical compliance in the course of other administrative procedures.


[1] Round 1 projects awarded in 2012 were the following: Saint Brieuc (a 500 MW project awarded to a consortium comprising Iberdrola and EOLE-RES), Saint Nazaire (a 450 MW project awarded to a consortium comprised of EDF EN and DONG Energy), Fécamp (a 498 MW project awarded to a consortium comprised of EDF EN, wpd Offshore and DONG Energy), Courseulles (a 450 MW project awarded to a consortium comprised of EDF EN and DONG Energy). In 2016, DONG Energy exited the abovementioned projects and was replaced by Enbridge. Round 2 projects (Tréport and Islands of Yeu and Noirmoutier, each of a capacity 496 MW) have been awarded in 2014 to a consortium comprised of Engie, EDP Renewables and Neoen Marine.
2] See  “New Regulation to Facilitate the Implementation of Offshore Wind Projects in France”
[3] Decision of 15 May 2017 (no 16NT02321) in respect of the Saint Nazaire project, decision of 20 June 2017 (no 16NT02757) in respect of the Fécamp project and decision of 2 October 2017 (no 16NT03382) in respect of the Courseulles project.
[4] Decision of 25 July 2017 (no 15NT03443).
[5] This claim has been filed before the entry into force of the decree of 8 January 2016 and has therefore followed the usual three tiers of proceedings scheme.
[6] Under the rules applicable to the Round 1 projects, a power generation licence was granted automatically to the winner of a call for tender.
[7] Decision of 30 October 2017 (no 16NT00528).
[8] Decree no 2016-1129 of 17 August 2016 relating to the competitive dialogue procedure for the electricity generation facilities.
[9] Article 105 of the law no 2015-992 of 17 August 2015 amending Article L. 342-3 of the Energy Code.
[10] Article 14 of the law no 2017-227 of 24 February 2017 amending Article L. 341-2 of the Energy Code.
[11] Decree no 2017-628 of 26 April 2017.
[12] Deliberation of the Energy Regulation Commission of 9 March 2017 on the draft decree relating to the indemnities due in case of delay for connecting offshore electricity generation facilities.
[13] Article 15 of law of 30 December 2017 amending Article L. 342-7 of the Energy Code.
[14] Article 15 of law of 30 December 2017 amending Article L. 342-3 of the Energy Code.