Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 95
Offshore Wind Worldwide 2023
4. OFFTAKE ISSUES
4.1 Offtake, remuneration
and tariff scheme
The income of any OWF operator chosen
through a public tender (classic call for
tenders as well as competitive dialogue) is
highly secured through a PPA or CfD concluded with the EDF, under which the latter
is obliged to buy the electricity produced at
a fixed price or to compensate the spread
between the effective market price and the
fixed reference tariff. Therefore, the tariff
scheme is not necessarily a take or pay
structure, but there is no risk of demand for
the producer, as in a take or pay structure.
Two different remuneration systems coexist
since 2015, namely the bespoke PPA/feed-in
tariff scheme ("obligation d’achat") and the
CfD/feed-in premium scheme ("complément de rémuneration"). Even though both
are still coexisting and can be used in the
tender procedure, depending on the choice
made in the tender specifications,34 the
competitive dialogue seems to be the only
procedure that will be used to attribute the
future OWF projects.
Under the feed-in tariff scheme, which is
the oldest system, the operator selected
through the tender process automatically
benefits from a guarantee of purchase of
the electricity, through a framework PPA
entered into with EDF. 35 The electricity is
directly sold to EDF at a fixed price. Bidders
propose an electricity price in their bids, in
34 Article L.311-12 of the Energy Code.
35 Article L.311-13 of the Energy Code.
95
accordance with a capped price fixed by the
tendering authority.
The feed-in tariff scheme was used in the
first two sets of French OWF (call for tenders
one and two).
Under the first and second tenders, PPAs are
concluded for a period of 20 years starting
at the completion of each tranche. The electricity produced by each tranche will only be
purchased as of the full completion of each
tranche.
The electricity purchase price was initially
divided in two components:
(a) the OWF component, which is variable
in connection with the actual level of
electricity produced on the wind farm
(price per MWh increasing and decreasing in accordance with defined tranches
of yearly full power capacity); and
(b) the grid connection component, which
was a fixed price aimed at recovering
the actual completion costs invoiced by
the RTE (including interests on capex).
However, the grid connection component is now in principle paid by the RTE
(see section 5 below). Besides, the grid
connection component of the successful
bidders’ prices of rounds one and two
was removed by the aforementioned law
dated 10 August 2018, so that grid connection costs are actually finally borne by
the RTE for all OWF projects.
