Private Renewable PPA’s in France

The French energy market is already used to private power purchase agreements (PPAs) among power producers and intensive energy consumers, but these kind of agreements were so far viable for traditional power providers or hydropower producers.

The new lease of life given to renewable energies by the Macron administration (and also by the previous French government), however, seems to have changed an energy landscape that was almost immutable for decades, and in which nuclear power took the largest share.

Indeed, two major energy consumers – Paris Aéroport (formerly Aéroports de Paris – ADP) and the state-owned French National Railway Company, SNCF – have decided to work with renewable energy providers through two separate invitations for bids, and to utilize the private PPA model to meet part of their huge energy demands.

Commenting these new developments, Xavier Daval, VP of French renewable energy association, SER and CEO of KiloWattsol SAS, told that the French energy market is now ready for such a solution, as the share of nuclear power is expected to fall from around 75% currently, to roughly 50% in 2025.

“The size of nuclear power in the French electric mix has always provided a stable power price over the past decades, but now this is going to change,” Daval stated. “Private PPAs may now become a substitution to this safety-net, as the changes in the energy mix will be associated with price unpredictability, especially during the initial phase.” He expects that power prices will increase in France over the next few years, although in the long-term, the increasing share of renewables may become a factor for a general price drop.

But it is not only about prices and economics, according to Daval. In fact, big corporations in France, as everywhere else in the world, are seeking visibility while committing to becoming greener. “These are first movers, but I am sure that more big energy consumers will follow their steps in the near future,” Daval said.