Offshore Wind Worldwide 2022 edition - Flipbook - Page 76
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IV. Offtake issues
A. O
fftake, 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 (“complement
de remuneration”). Even though both are
still coexisting and can be used in the tender
procedure, depending on the choice made in
the tender specifications,29 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.30 The electricity is directly
sold to EDF at a fixed price. Bidders propose
29 Article L.311-12 of the Energy Code.
30 Article L.311-13 of the Energy Code.
Hogan Lovells
France
an electricity price in their bids, in
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: (i) 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
(ii) 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 V.
below). Besides, the grid connection
component of the successful bidders’ prices
of rounds one and two was removed by the
law dated 10 August 2018, so that grid
connection costs are actually finally borne by
the RTE for all OWF projects.
For the offshore wind installations which
would not be implemented through a tender