Political Instability Hampers Energy Transition
The French offshore wind sector is currently facing a period of considerable uncertainty and slowdown, primarily due to the country's ongoing political crisis. A fractured legislature has struggled to reach consensus on an austerity budget and has failed to approve the long-anticipated PPE3 energy bill, which is vital for defining France's energy needs from 2026 onwards. This political instability, marked by six prime ministers under President Emmanuel Macron in two years, has directly impacted the progression of energy framework changes and government tenders for offshore wind projects.
Tender Processes Face Significant Delays
New tenders for offshore wind projects are reportedly a year behind schedule. Furthermore, two additional tenders, collectively representing 12 GW of capacity, which were expected to be launched by the end of 2024 and awarded in autumn 2026, have not yet materialized. A recent 1 GW tender off France's west coast failed to attract any bidders, a situation attributed partly to the complexity of the site and a prevailing lack of clarity regarding state support. Previously guaranteed state aid for bidders is no longer assured, adding to the industry's apprehension. The absence of a new government has also prevented the promulgation of the PPE (Programmation pluriannuelle de l'énergie) decree, thereby stalling the launch of the tenth offshore wind tender (AO10), which aims to contribute to 18 GW by 2035.
Industry Reacts to Mounting Challenges
The repercussions of these delays are keenly felt across the industry. Developers and equipment suppliers anticipate a significant slowdown in activity. Companies within the renewable energy sector have reportedly frozen salaries and hiring, with some undertaking workforce reductions. A notable instance involves RWE, which, despite winning a 1.5 GW tender in a consortium with TotalEnergies, subsequently announced its intention to withdraw. The company cited factors that diminished the project's value compared to other international ventures. RWE has also decided to abandon its offshore wind activities in France altogether, attributing the decision to financial difficulties and a lack of clear French energy policies. Marc Hirt, CEO of Ocean Winds France, emphasized that 'visibility and the capacity to project' are crucial for the industry, highlighting the detrimental effect of political uncertainty.
France's Ambitious Goals at Risk
Despite possessing the second-largest wind resource in Europe after Great Britain, France significantly lags behind its European counterparts. The country currently has only 3 GW of offshore wind capacity installed or under development, a stark contrast to the 16 GW operational in Great Britain. The Cour des Comptes (Court of Auditors) has previously underscored France's delay in achieving its wind energy objectives. While France aims for 18 GW of offshore wind by 2035 and 40 GW by 2050, requiring approximately 50 offshore parks, the current political and regulatory environment poses a substantial challenge to these ambitious targets.
5 Comments
Stan Marsh
The delays are a disaster for climate goals and job creation in renewables.
Eric Cartman
The market is speaking. If it's not viable without massive state aid, it's not truly sustainable.
Kyle Broflovski
It's frustrating to see France lag on renewables, especially with such potential. However, rushing into poorly planned projects just to meet targets could lead to even bigger financial and environmental issues down the line.
Stan Marsh
Delays are certainly costly and impact investor confidence, as RWE shows. But perhaps a slower, more deliberate approach could lead to more robust and sustainable energy policies in the long run, even if it means missing some initial targets.
Michelangelo
The industry's need for 'visibility and capacity to project' is understandable for large investments. Yet, the government also has a responsibility to ensure these projects are truly beneficial and not just subsidized ventures for private companies.