France auction for renewable power in October 2020 shows continued high demand

On 22 October, France's Ministry of Ecological Transition awarded support for 600 MW of new renewable energy capacity and announced acceptance of more than 1.5 GW of demand management capacity for the coming winter. 

Auction results saw 332 MW of guaranteed tariff support awarded to solar parks or roofs (typically for car parks) and 258 MW for wind farms, corresponding to 45 and 23 projects, respectively, according to an announcement by the ministry. A further 9 MW related to 31 small-scale solar. The tariff guarantees are valid for between 15 and 20 years.

These projects will produce nearly 1 TWh/year of electricity, equivalent to the consumption of around 190,000 households, the ministry said.

"Despite the health crisis, the number of projects applying for calls for tenders for wind power and ground-based photovoltaics has greatly exceeded the volumes offered," said Minister of the Ecological Transition Barbara Pompili in a press statement. "Prices offered by winning projects were down sharply compared to the previous round of auctions in April, confirming the drop in costs, the dynamism and the competitiveness of the sectors."

The average tariff for solar parks and roofs was Eur57.4/MWh, or 7.4% lower than the April auction. Wind project awards averaged Eur59.7/MWh, down 4%, and micro-solar averaged Eur13.8/MWh, down 14%.

The ministry doubled the price ceiling for demand response bids, and this had a significant impact. Some 1,509 GW of demand response bids were accepted across 59 sites, compared to 770 MW in a similar auction in 2019. The ministry said that it chose to raise the rate for demand response because some nuclear power will be offline this winter, due to deferral of maintenance that should have been done in the spring due to Covid-19 restrictions.

Another set of auctions for solar PV and wind will be held in November.

Posted 22 November 2020 by Kevin Adler, Editor, Energy and Natural Resources Group, IHS Markit