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France: Decree dated 14 December 2016 enhances regulatory controls on renewable energy plants and power purchase agreements

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Following our e-briefing dated 22 December 2016 on the new Feed-in-Premium (FiP) scheme for onshore wind power projects in France, it should be noted that in 2017 those projects will be subject, when above 6 masts, to competitive tendering procedures. The FIP calculation methods and terms of payments will be determined in the specification of each call for tenders. To date, the French government has not fixed any implementation timetable yet. 

2016, filled with new renewables regulations, ended with the publication of another important text, Decree n° 2016-1727 of 14 December 2016 on the commissioning, controls and applicable sanctions of particular electricity-generating plants (« Control » Decree).

A greater completion date flexibility

In order to benefit from the June 2014 feed-in tariff, a Decree dated 28 May 2016 set a deadline for the completion of facilities (3 years from the complete application for a contract or 18 months after entry into force of the Decree, 30 November 2017). The new « Control » Decree allows to postpone this deadline in the event of delays related to connection work, litigation or force majeure. Additional time will be provided by the Minister of Energy. This flexibility meets the expectations of many ongoing project holders.

An annual review of the purchase conditions

The conditions of purchase and of the FiPs defined for each energy source by Ministerial Orders will be reviewed on a yearly basis, and updated where appropriate, regarding the costs and profits of the facilities, and also the audits conducted by the Regulatory Commission of Energy (CRE). These amendments will not impact ongoing contracts. Yet enhancing the ability to adjust should not be achieved at the expense of the legal certainty of investment.

The creation of a specific administrative body related to electricity-generating plants

The prefect (representative of the State) is now given significant powers to supervise and to impose sanctions. He can suspend the execution of contracts, or even terminate them, for instance in case of failure to notify to Electricité de France (EDF) changes that have occurred regarding the terms of the contract, or in case of non-compliance with the general or particular requirements specified by the purchase obligation, the FiP or the tender specifications. He also has the authority to demand the reimbursement of the sums received since the start of the breach, or to impose financial penalties.