The Guest Blog

Guest blog post by Fabrice Cassin, partner at CGR Legal law firm.

At the time of the introduction of the bill, the energy Minister was stating that this text would “provide the suitable tools for the establishment (…) of a French new energy model”. The law n°2015-9222 of August 17th 2015 relative to energy transition would rather seem to be adding straws to a haystack that has been assembled for ten years.

The development of renewable electricity production represents a crucial issue for the implementation of a new energy model in accordance with the Rio commitments to Climate change mitigation approved by France and the EU under the Kyoto protocol. The adoption of the Paris Agreement at COP21, last December marks a turning point. It emphasizes the urgency in addressing climate change. With some 190 countries submitting their Nationally Determined Contributions (NDC), the commitment to act is evident, even though a greater ambition is needed to meet the agreed objectives. For that, decarbonizing energy will have to include accelerated deployment of renewables, coupled with the boost to energy efficiency, both in developed and developing countries. In this context, the Agreement specifically acknowledges the need for enhanced deployment of renewable energy to meet the objective of universal access.

The new French law aims to increase the share of renewable energy up to 40% of their power generation until 2030 and to decrease the nuclear share below 50 % by 2025 and constitutes a real breath of fresh air for the renewable power generation.

In order to achieve these objectives in ten and fifteen years’ time, the legislator has developed a new economic planning instrument: the Multi-annual Energy Framework (Programmation Pluriannuelle de l’Energie). A new step has thus been achieved and even though it is only the early stage of this new text, one might formulate one assessment and two observations.

Objectives to be put into perspective

The energy sector will have to undergo a substantial transformation with a view to achieve the aims set for 2025 and 2030. Still there remains an indicator of achievement insufficiently considered during the legislative work: projects still waiting to be carried out in relation to the objectives set for 2020. The installed capacity of renewable power in France amounts to 43 627 MW on December 31th 2015 (hydroelectricity represent 60%) against 45 098 MW in the national action plan for 2015. The renewable power grid queue in France on the continent amounts to 13 747 MW on December 31th 2015, according to the transmission system operator (RTE).

This shows how difficult it can be to reach the ascribed goal. Regarding wind power, the current rate of grid connection remains far from adequate. In 2015, the wind power grid has reached 999 MW even though a 1647 MW per year grid capacity is required to achieve the 2020 objectives. Likewise, the offshore wind power is definitely lagging way behind compared to the aim of 6 000 MW. So far, there is no offshore facility brought into service and 3 123 MW are currently in the queue.

At the present rate, objectives set by the new law will not be achieved before 2050.

The phasing-out of the purchasing obligation

It is understood that the long-term sustainability of policies favourable to renewable energies requires making this production profitable by market rules in order to reduce the public support. The Commission adopted in June 2014 new guidelines concerning State aid for energy for the period 2014-2020. Starting from 2016, these guidelines demand that this aid shall be given as the grant of a premium in addition to the market price of electricity.

As a consequence, the transition law plans a gradual transition from the purchasing obligation system to additional remuneration system. The legislator has chosen to implement immediately the new guidelines despite the fact, as explained above, that the 2020 objectives are far from being achieved – except for objectives concerning the photovoltaic sector. It is true that the French situation makes it difficult to grant derogations; the current purchasing obligation system was indeed invalidated by the Commission on the basis of the previous guidelines of 2008 with the noticeable exception of the wind power rate of June 2014.

This has been especially worrying for investors given the extent of the power grid queue. Still, the Department of climate and energy at the Minister of ecology provided necessary assurances about a deferred application for the onshore wind sector. The current purchase price has been approved and will remain valid or a period of up to ten years. Investors had been definitely reassured by the “ buyer of last resort” system if there is a market failure.

One subject has not yet be discussed : the principle of financing renewable energy support policies by the only consumer, offset by the Contribution to the public electricity service (CSPE) in accordance with the recommendations of the Court of Auditors in 2011. The funding model reform involves an enhancement of carbon prices and contribution efforts of fossil fuels and nuclear waste treatment sectors.

The unachievable administrative simplification

The development of renewable energies requires the lifting of regulatory and administrative obstacles as recommended by the Court of Auditors in 2013 for geothermal and onshore wind power. But even before the energy transition law, this process was initiated for wind power with the passage of the “Brottes” law of April 15th 2013 which suppressed the five masts rule that previously required all projects to include at least five wind turbines and the wind power development zone system from 2005. Thereafter, the order n° 2014-355 of March 20th 2014 introduced, in a experimental basis, a single authorization procedure for regions with good wind resources such as Champagne-Ardenne, Picardy and Nord-Pas-de-Calais.

Nevertheless, the new transition law itself contains few measures which could actually reduce those obstacles. Even so the energy Code has now introduced a maximum period of 18 months for grid connection with compensation in cases of delay. Although it remains to be seen if grid operators are ready to embrace a commitment concerning power grid queue while entry points are gridlocked. Besides, the text also provides generalization of single authorization procedure throughout the national territory for windmills, methane installations and to any power facility previously subjected to prefectural approval.

On the flip side, the final version of the text adopted by the National Assembly represents an additional layer of complexity for wind farms implementation.

The legislator has actually seen fit to change the existing framework concerning the separation distance between electric facilities and all residential building and areas. Far from simplifying this process, this legislative provision has raised new issues. The previous system already decreed a minimum distance of 19685 ’’ (500 m). The environmental impact studies required for wind turbines have long included safety clearances partly due to sound effects and ice throw. However it remains highly uncertain whether the prefectural decision is intervening sufficiently upstream to allow the developer to alter his project; the situation is therefore prone to litigation.

A further condition has been set on: the mandatory opinion of the municipality or local authority where is projected the wind power plants if this public person has adopted a local town planning plan. This is also a source of dispute.

At last, for municipalities with under 5 000 inhabitants, the convening of member of town council must now be accompanied by a short explanatory memorandum. Here again, there is ground for litigation.

Several measures could have nevertheless allowed to reduce those constraints. One might regret that single authorization procedure keeps sanctioning non-compliance with the town planning code, the environmental Code and the forest Code. Will need to be set out other initiatives to reduce the possibility of judicial review against authorization such as restrictions of legal interest in bringing proceedings or suppression of the benefit of the two-stage procedure.

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