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What Can EU Policy Do to Support Renewable Electricity in France? Oliver Sartor (IDDRI)

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What Can EU Policy Do to Support Renewable Electricity in France? Oliver Sartor (IDDRI) N°06/16 APRIL 2016 | CLIMATE What can EU policy do to support renewable electricity in France? Oliver Sartor (IDDRI) ELECTRICITY IS A CRITICAL ELEMENT OF ACHIEVING THE EU’S 2030 RENEWABLE ENERGY TARGETS Under the 2030 Climate and Energy Package, the European Union has set itself a target of increasing the share of renewable energy from to 27%. Electricity will play a key role in achieving these goals, with the share of renewable power projected to increase to around 47% of the electricity mix by 2030. While electricity is only one part of the energy system, elec- tricity is therefore a vital sub-sector of the EU’s renewable energy strategy to 2030. FRANCE IS A CRITICAL PLAYER FOR MEETING THE EU’S 2030 RENEWABLE ELECTRICITY GOALS As the second largest energy consumer in Europe, and with relatively ambitious national goals of achieving 32% renewable energy and 40% renewable electricity (RES-E) by 2030, France will be critical to achieving the EU’s objectives. As the most interconnected electricity market in Europe, France’s approach to renewable electricity will also influence the redesign of electricity markets to cope with higher shares of variable RES-E in its region. Facilitating the efficient deployment and integration of renewable electricity in France is therefore an important sub-chapter of European renewable energy policy going forward. THE EU CAN FACILITATE THE ACHIEVEMENT OF FRANCE’S RES-E TARGETS IN SEVERAL WAYS The integration of higher shares of renewable electricity in France is a significant domestic policy challenge. But EU can take a number steps to facilitate the achievement of France’s goals. One area where the EU has value added is by ensuring that EU rules for state aid to renewables do not inadvertently become a barrier to cost-efficient deployment of renewa- bles in France. The EU should also push France (and all Member States) to develop a coherent and comprehensive RES-E market integration strategy Institut du développement durable for 2030 to facilitate national and regional market development. In addi- et des relations internationales tion, the EU should push France to improve the quality of its enabling 27, rue Saint-Guillaume environment for renewable electricity projects, so that it is in line with EU www.iddri.org 75337 Paris cedex 07 France benchmarks. Copyright © 2016 IDDRI As a foundation of public utility, IDDRI encour- ages reproduction and communication of its copy- righted materials to the public, with proper credit (bibliographical reference and/or corresponding URL), for personal, corporate or public policy research, or educational purposes. However, IDDRI’s copyrighted materials are not for commer- cial use or dissemination (print or electronic). Unless expressly stated otherwise, the findings, interpretations, and conclusions expressed in the materials are those of the various authors and are not necessarily those of IDDRI’s board, or of any individuals or organisations consulted in the context of this study. Citation: Sartor, O. (2016). What can EU policy do to support renewable electricity in France?, Working Papers N°06/16, IDDRI, Paris, France, 28 p. ◖◖◖ This article has received financial support from the French government in the framework of the programme “Investissements d’avenir”, managed by ANR (the French National Research Agency) under the reference ANR-10-LABX-01. ◖◖◖ For more information about this publication, please contact: Oliver Sartor – [email protected] ISSN 2258-7071 What can EU policy do to support renewable electricity in France? Oliver Sartor (IDDRI) KEY POLICY RECOMMENDATIONS 5 1. INTRODUCTION 7 2. THE STATE OF RENEWABLE ELECTRICITY DEPLOYMENT IN FRANCE 8 2.1. Recent progress 8 2.2. Moving off track? 9 3. BARRIERS TO RES-E DEPLOYMENT IN FRANCE & IMPLICATIONS FOR EU POLICY 11 3.1. Stabilising and clarifying state aid rules for the post-2020 period 11 3.2. Ensuring a comprehensive and coherent approach to RES integration 15 3.3. Strengthening the regulatory enabling environment for realising RES projects 20 3.4. Ensuring the achievement of European RES deployment objectives 22 4. CONCLUSION 24 BIBLIOGRAPHY 25 3 What can EU policy do to support renewable electricity in France? KEY POLICY RECOMMENDATIONS necessary economic incentives for continued RES- E deployment in France beyond 2020, particularly As the 2nd biggest energy consumer in Europe, the during an extended period of low fossil fuel and strength and ongoing development of the French carbon prices, which is expected. The current de- renewable energy sector is a critical piece of the bate on “how soon” to phase out support schemes puzzle for achieving European energy and climate for which “mature” technologies and when to put goals for 2030 and 2050. France has made signifi- certain technologies, like wind and solar, in com- cant progress in developing a small but quickly petition is also somewhat misguided: it is first of growing renewable energy sector in recent years. all necessary to focus attention on how to put in It has also set itself ambitious targets to scale up place the currently missing conditions for further the share of renewable energy in total final energy market integration and for efficient competition, consumption to 32% by 2030. Electricity is a so as to address the larger challenges that must be critical part of this goal, with the recent Law for confronted if full RES integration into markets is to Energy Transition and Green Growth setting a goal be possible in the longer term. of 40% of electricity to come from renewables by 2030—up from 17% today. 2. Clarifying the interpretation of specific Achieving these objectives represents a domestic flexibilities within the current state aid guide- policy and implementation challenge for France. lines. Existing state aid rules for environment But European policy frameworks can also do a lot and energy are currently applied sub-optimally in to remove potential barriers to France achieving France due to a combination of uncertainties about its goals and ensure a favourable enabling envi- the interpretation of the EU’s current rules and na- ronment for achieving France’s RES goals. This tional government policy decisions to sometimes paper suggests 7 ways that the EU can do so with go further than what new rules require. Increased a focus on the French electricity sector. They focus dialogue and sharing of concrete experiences with in particular on what the EU can do as part of the implementing the new state aid rules between ongoing revision of the European Directive for the Member States (and between Member States and promotion of renewable energy (“RES Directive”), the Commission) could also help to improve the on the “new governance mechanism” for imple- quality of implementation. However, further clari- menting the Energy Union, on the revision and im- fication and guidance by the Commission on some plementation of 2014 European State Aid rules for key elements of the new rules—prior to require- Environment and Energy, and the EU’s electricity ments for state aid notification—could also help market design reform package that is being pre- France to minimise total deployments costs and pared alongside the revised RES Directive. simplify administrative procedures, as long as the existing rules apply. Key issues from a French perspective are: 3. Maintaining and strengthening key RES Di- 1. Stabilising current European State Aid rules rective provisions on the project enabling envi- for the post-2020 period and clearly defining ronment in the Member States. To improve on essential conditions that should be fulfilled be- the experience of these provisions in the cur- fore their eventual removal can be foreseen. Sta- rent RES Directive, the EU should improve re- bilisation of current rules is important to provide porting, monitoring and dialogue with Member IDDRI WORKING PAPER 06/2016 5 What can EU policy do to support renewable electricity in France? States on these measures, including through a in France’s interest if it is to achieve its high vari- small set of indicators. This is especially relevant able RES-E targets in 2030. Strong guidance on in France with regard to: project delays, network the process could also ensure effective stakeholder access barriers, cost transparency and potential participation and that the process is backed by an cost-sharing, minimising the cost of project fi- appropriate political mandate from national gov- nance, reducing excessive administrative burden ernments, both of which are essential. and delays in authorization, the availability of public lands for RES projects, and the stability of 6. Avoiding prematurely harmonising nation- the regulatory environment. These issues are very al support schemes for renewable energy before important for France, where project financing the appropriate conditions for a common mar- costs are several percentage points higher than in ket in RES-E are in place in Member States like neighbouring Germany, and wind projects often France. While some Member States may be ready take 7 to 8 years to complete due to a range of ad- to contemplate a broader opening of their support ministrative inefficiencies and related factors. schemes, France is not yet at this stage of devel- opment of its RES sector. Forcing Member States 4. Requiring Member States to develop a with still relatively small RES sectors to fully open comprehensive and coherent RES-E integra- up support schemes would likely be economically tion and market flexibilisation strategy as part and politically counterproductive in the French of their National Climate and Energy Plans. context for the foreseeable future. A broader ap- This would be extremely helpful to provide for a proach, taking account of Member States different coherent, non-discriminatory and longer-term starting points and a larger set of long run market strategic approach to RES integration in France integration issues for RES-E, should be preferred.
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