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France to finally fulfill offshore wind potential?

01 December 2020 Keiron Greenhalgh

The year 2021 will be remembered for many things, including being the year when France finally starts to fulfill its offshore wind potential, observers say.

France has 3,427 km of coastline, according to the US Central Intelligence Agency World Factbook, and unlike the waters off Norway, which has over 80,000 km of coastline and tops the European table in this respect, much of it is relatively hospitable.

As new targets continue to be set across Europe for offshore wind capacity -- the EU set a goal of 300 GW by 2050 in November -- France is set to join the continent's established front-runners ringing the North Sea, finally overcoming the difficulties that hobbled any early momentum, according to Green Giraffe Director Kevin Feldman.

By the end of December, a tender is expected to be underway for 1 GW of fixed-bottom capacity off the coast of Normandy, a development area called Manche Est Mer du Nord. The tender is expected to be awarded before the 2022 presidential election, according to Feldman, whose company focuses on advising renewables companies, especially in the offshore wind sector.

In 2021 through 2022 another 0.5 to 1 GW of capacity will be made available for tender in southwest France, an area known as Sud-Atlantique. The government also plans to hold three tenders for floating capacity in 2021 and 2022, each with 250 MW of capacity. The first will be in the Bretagne Sud area, while the other two in 2022 are planned for areas in the Mediterranean. Another 1 GW of fixed offshore wind will be up for auction in 2023.

The French government, which has come in for stiff criticism over its lagging efforts in the sector compared with those of its neighbors, especially across La Manche, now has a roadmap, according to Feldman, expecting 5.2 GW-6.2 GW of offshore wind to be online by 2028.

Speaking during a virtual World Forum Offshore Wind webinar, Feldman said the support for upcoming tenders -- in the form of 20-year contracts for difference (CfD) -- is strong, as it diminishes the merchant risk. The last tenders held -- Round 3 -- attracted a lot more overseas attention because of this, substations now being the responsibility of the grid operator rather than developers and pre-permitting work being allowed, he added.

France was interested in offshore wind, as Feldman puts it "pretty early." In Round 1, awarded in July 2012, there were four winners out of 10 offers. In Round 2, awarded in May 2014, there were two winners out of four offers. However, Round 1 and Round 2 projects are only expected to begin operating commercially in 2022-2023.

These projects are only coming to fruition at the moment, after much renegotiation, including of their tariffs. In June, the French government approved six wind projects, but cut their tariffs. "We will bring about renewable energy more quickly and less expensively: the projects are confirmed, their public subsidy is reduced by 40%," tweeted President Emmanuel Macron.

Prior to that, the framework for projects took a long time to work out. Rounds 1 and 2 were assessed on qualitative factors, including how much local content was included, as successive governments hoped to build a manufacturing base. However, efforts to maximize local content were somewhat hampered by the wind turbine arms of Areva and Alstom being bought by industry powers Siemens Gamesa and GE, respectively.

But even as France gains momentum, some choppy waters could still be ahead. The Brittany Regional Fisheries Committee warned in November it will look to block Iberdrola's 496-MW Saint-Brieuc project, located 16 km off the coast of Brittany in the English Channel, from going ahead if the authorities do not do so, citing its proximity to scallop fishing grounds. Construction is due to start in spring 2021. The project is scheduled to enter service in 2023.

Deep waters

Immediately to the south of France, Spain -- home to such behemoths of the sector as Iberdrola and Siemens Gamesa plus 4,964 km of coastline -- is likely to find it much harder to join the top table of European offshore wind, the observers say.

Not only are Spanish prospects characterized by deep offshore waters, but the most promising area in terms of wind speeds -- the Canary Islands -- is isolated from mainland Spain and a small market, according to Luiz Gonzalez-Pinto, Chief Operating Officer at Saitec, a floating turbine developer. In addition, a Canary Islands auction is set to be delayed until 2022.

The Canary Islands has the best wind resources in Spain and a higher cost of energy due to state subsidies related to its distance from mainland Spain. However, the supply chain is limited, as is demand. And competition to win the leases available is expected to be fierce, according to Gonzalez-Pinto, who argues that such a situation makes it "maybe not the best commercial opportunity." Although his perspective must be considered, Saitec is working on projects off the country's northern coast in the Bay of Biscay.

Galicia, meanwhile, has a much healthier supply chain scenario, according to Gonzalez-Pinto, noting it is already an onshore wind hub for Spain. However, it also has some of the best fishing grounds, Europe's largest fishing fleet, and with that the entrenched political heft due to the number of jobs supported and export revenues earned. In addition, there are a good number of protected areas, and competition for space would be fierce, he added.

To the east is what Gonzalez-Pinto termed the Asturias-Cantabria-Basque Country area, which is dogged by being a high density area, but a number of coal-fired power plants are going offline in this section of the country, and it is an industrial hub offering what he called a "powerful" supply chain on the positive side of the chit.

A roadmap for the sector is expected to be published at the end of 2020 by the Spanish government. This roadmap is expected to provide a clearer permitting pathway, particularly when it comes to grid connections, Gonzalez-Pinto said. More details on maritime spacial planning guidelines are also required, he added.

The Spanish Wind Association wants there to be 2-3 GW of capacity by 2030. The target, according to Gonzalez-Pinto, is ambitious and challenging.

Things could be even tougher in the short-term in Poland, according to John MacAskill, Group Marketing Director, AqualisBraemar, even though it aims to install 28 GW of offshore wind by 2050, which most certainly would put it among the continent's leaders.

While the government and industry representatives signed a pact in July, MacAskill, who held a similar position at its Offshore Wind Consultants unit, said a time crunch could derail any momentum in Poland, with the proposed Offshore Wind Act expected to come before parliament in January, less than six months before CfDs for projects already on the slate need to agreed. If they aren't, it could capsize the whole sector, he said.

Posted 01 December 2020 by Keiron Greenhalgh, Editor, Climate & Sustainability Group, IHS Markit

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