Late 2016 saw the authorities in France initiate a process that could lead to a tender for commercial scale floating offshore windfarms in 2018, but construction of Round 1 projects for bottom-fixed windfarms hasn’t even started yet
With a pipeline of six projects totalling 3 gigawatts (GW) awarded in the space of two years, two French-owned turbine OEMs and significant supply chain commitments, France’s offshore wind programme seemed in good shape at the end of 2014. But a little over two years later, permits for Round 1 projects have been appealed, the consultation for some is only now getting underway, national turbine OEMs have changed hands and the latest energy plan from the French Government brought only vague targets for more offshore wind. A third round of tenders is at last going ahead, but with an election looming that could see a centre right government elected, uncertainty abounds. Whatever kind of government France finds itself with later this year, it will need to crack on with the background work that is necessary to identify new zones for offshore wind.
Then there’s the cost of Round 1, the tenders for which were prepared more than six years ago, long before new technology began to drive down the cost of offshore wind as steeply as it has in the last 18–24 months. With a 20-year feed-in tariff north of €170/MWh – excluding grid connection – as yet unexecuted Round 1 projects compare particularly unfavourably with projects that have been awarded more recently elsewhere in Europe at or below €70/MWh.
“Part of that difference is associated with wind conditions at French sites, which are 1 m/s lower than their northern-Europe counterparts,” Jérôme Jacquemin, a partner at consultant Everoze in France, told OWJ. “Then there are less favourable ground conditions. Then there is additional cost associated with risk allocation and tax and local content peculiarities.” Added to that, much of the technology selected for the projects, if not obsolete, is dated in comparison with technology to be adopted in recently awarded projects in The Netherlands and Denmark. Then there’s the tender model used for Round 1 and the additional cost that resulted from local content requirements. As if that wasn’t enough, legal challenges launched last year against Round 1 projects at Saint-Nazaire, Fécamp and Courseulles-sur-Mer – rulings from which are not expected until mid-2017 – mean that, assuming they go ahead, they are unlikely to come on stream much before 2021.
The good news, says Mr Jacquemin, is that the upcoming tender for Dunkirk, which forms part of Round 3, provides an opportunity to set a new cost benchmark for the French tender model. Site conditions are as close as they can be to northern European sites that produced such low winning bids in the latter part of 2016, and local content considerations will be much less important. “Dunkirk will set a new cost benchmark in France, which we hope will come close to €100/MWh, excluding grid connection,” Mr Jacquemin told OWJ. “This will provide a new cost basis from which further de-risking of the tender model can be implemented to narrow the gap.”
But there are other challenges that need to be addressed. In France, he says, the question of marine spatial planning for offshore wind and other forms of marine renewables is “unfinished business”. Short spurts of work were conducted in 2012 and in 2014. “The latest round culminated in three zones for floating wind in the Mediterranean Sea and one small zone at Groix for a pilot-size floating wind project,” he explained. “However, for bottom-mounted offshore wind, the conclusion of that exercise was primarily that any new zone near Round 1 or 2 projects was undesirable at this stage. In the Atlantic, this ruled out for some time any new project save that lying off Oléron. In the English Channel, low impact areas were identified, but the same arguments on proximity and collateral damage on public acceptance of Round 1 and Round 2 projects ruled out any new project other than off Dunkirk, so two years on, here we have no specific targets for offshore wind for the three main sea zones, large chunks of favourable seabed locked out until Round 1 or 2 projects have cleared planning approval and two potential sites off Dunkirk and Oléron.
“It is obvious to anyone with some knowledge in this sector in France that long-term development of bottom-mounted offshore wind at scale in France will involve a multi-gigawatt cluster northwest of the current Fécamp project, another south of Boulogne and perhaps additional projects off Saint-Brieuc and Saint-Nazaire,” said Mr Jacquemin.
As it moves slowly towards a new tender model more akin to that in The Netherlands, the French Government needs to find a way to unlock these areas, he says. “In addition, a proper large-scale zoning, sizing and phasing exercise is required. National and local administrations need such a plan to carry out upfront public enquiries and to commission environmental and technical surveys, and transmission system operator RTE needs long-term visibility to optimise and plan the required grid connection infrastructure. Private-sector investors would also value that visibility.” All in all, he says, cherry picking small sites one after the other has been shown to have its limitations.
Ambitious plans for the industrial facilities required to build turbines and blades in France are also being affected by the uncertainty and by changes in the industry since the Round 1 and Round 2 deals were announced. Apart from a factory to build nacelles at Saint-Nazaire, none of the other facilities has – or will – be built until Round 1 and 2 projects have consents. Mid-2016 saw GE roll out the first Haliade 150 nacelles from its Saint-Nazaire factory, but they were intended for Deepwater Wind’s Block Island offshore windfarm off the east coast of the US rather than a French project.
Mr Jacquemin says that, even if the Round 1 and 2 sites are consented, it is unclear exactly what manufacturing facilities will be built. In response to the local content incentives of Round 1 and 2, industrial commitments were made by Alstom (whose turbine business is now part of GE) and Adwen. For Alstom, this involved the nacelle assembly facility in Saint-Nazaire and a blade manufacturing facility in Cherbourg run by LM, which has also recently been acquired by GE. Adwen planned to build the same kind of facilities in Le Havre but, now owned by Siemens/Gamesa, it has yet to break ground on the Le Havre facility. GE/LM has yet to build the blade manufacturing facility it planned at Cherbourg, and it is hard to see two different blade manufacturing facilities being built in France at all at the moment.
“Even if Round 1 and 2 projects tick along and Dunkirk is awarded promptly, the lack of strategic planning and vague new-award targets for 2023 beg the question as to whether outstanding commitments will be followed through,” said Mr Jacquemin. The new-award targets he described range from a paltry 500 megawatts to an upper limit of 6 gigawatts. This vagueness could be interpreted as a stick with which to beat industry, he suggests – bring down costs and we might hold tenders for something approaching the upper end of the range, the French administration seems to be saying.
“In the context of industry consolidation, it’s hard to conceive all of these facilities being built. Which blade manufacturing capacity gets built may depend on what happens in the aftermath of the Siemens/Gamesa deal, in particular, whether Siemens and other turbine manufacturers decide to continue sourcing from LM. The French Government and administration is a big boat to steer, so changes won’t happen overnight. There is broad understanding between the administration and industry as to what needs to happen now, but a new government could still opt for nuclear power.”