France first out of the gate with commercial-scale floating wind only tender

Despite slow progress on bottom-fixed offshore wind compared with its neighbors, France beat them to the punch on floating offshore wind, naming the bidders for the largest auction to be held so far solely for the nascent technology.

France's Ministry of Ecological Transition pre-selected 10 bidders for a 2022 auction that will see a subsidized 250-MW floating offshore wind project in South Brittany built, the first of three such tenders for floating wind, according to a 15 September statement.

The pre-selection of bidders follows a government consultation on the South Brittany project last year, and the start of a consultation on two additional 250-MW floating wind farm projects in the Mediterranean, according to the ministry.

The ventures set to bid to build and operate the wind farm—including those of European oil and natural gas players like Shell, Iberdrola, Engie, and TotalEnergies—are competing to build the floating wind project by 2029.

France seems to be neck-and-neck with the UK, which is also seeking to enter the emerging floating wind market after it set a 1 GW floating wind capacity target for 2030.

State-subsidized floating wind tenders are also moving ahead in Scotland and the wider UK, and two of the world's first demonstration-scale floating offshore wind arrays have made progress in the country.

The 50-MW Kincardine project off Aberdeenshire in Scotland started supplying power this week, while Hywind Scotland was the world's first floating offshore wind farm, beginning operations in 2017. But the projects are demonstration size rather than commercial size, said IHS Markit Principal Research Analyst Andrei Utkin.

The Scottish government's recent ScotWind tender for waters off the northern-most part of the British Isles is part of a plan to build up a combination of fixed-bottom and floating offshore wind capacity reaching 10 GW, and the UK is has selected three floating wind projects totaling 300 MW in the Celtic Sea for a future tender.

France's tender has progressed further than these two because it is past the seabed-leasing stage, Utkin told Net-Zero Business Daily.

The French, Scottish, and UK projects will all be subsidized using slightly different contracts-for-difference (CFD) schemes, he said.

While the floating wind concept has long been mulled as a way to reach stronger winds in deeper waters, the cost of manufacturing floating offshore wind foundations has been holding the sector back, according to early wind turbine pioneer Henrik Stiesdal.

French government's targets

France's geographic proximity to deep Atlantic Ocean waters means that there is far more capacity within the country's maritime boundaries for floating offshore wind than for bottom-fixed offshore wind.

The French government wants to install about 1 GW of offshore wind per year through 2028, but it has no commercial-scale offshore wind projects in operation to date. The UK by comparison has over 10 GW of offshore turbines already turning.

The 250-MW floating wind project in South Britany will be the fifth tender by the state and the ninth offshore wind project under development in France, but it will have a lower level of subsidy than some of the others.

In 2018, the government re-negotiated feed-in-tariffs for six offshore wind projects approved in 2012 and 2014 with a combined capacity of 3 GW, after deciding it wanted to pay €150/MWh ($175.90/MWh) not €200/MWh. The subsidy for the floating wind project is capped at €120/MWh for 15 years.

France has set its sights on putting a total of 6.2 GW of bottom-fixed and floating offshore wind capacity into operation between 2020 and 2028. The target was laid out in the 2020 version of its Multiannual Energy Program that will see it tender for a total of 8.75 GW of offshore wind capacity by 2028.

Bidders for floating wind in France

Majors in the European energy sector as well as private equity firm ventures were represented among the pre-selected bidders.

This includes Norwegian state-owned energy company Equinor, which operates Hywind Scotland and is building the larger Hywind Tampen project in waters off its homeland.

Spanish renewables giant Iberdrola, which has bottom-fixed offshore wind projects in operation in the North and the Baltic seas, also pre-qualified. Iberdrola is building a fixed-bottom facility off the French commune of Saint-Brieuc, although a 100-litre oil leak from an offshore vessel briefly paused construction on the project this summer.

Three of the pre-selected groupings have German ties. These bidders include energy company RWE, currently operates 17 offshore wind farms in five countries, as well as a consortium formed by Belgian renewable energy producer Elicio and German developer BayWa r.e.

The shortlist also includes a consortium formed by German renewable developer wpd, Swedish state-owned power company Vattenfall, and Spanish-headquartered BlueFloat Energy, which is owned by US equity firm Quantum Energy Partners.

"Vattenfall's ambition is to develop its renewable production in France by 2030, notably based on offshore wind," said the company in a statement on its pre-selection, noting it has been present in France for 20 years through a retail business.

Four bidders feature French firms. Among these are a joint venture between French utility Engie and renewable energy company EDPR.

Another includes Shell, a subsidiary of German power generator Energie Baden-Württemberg (EnBW), and a subsidiary of a French state investment fund.

The third bidder with domestic ties also involves a Canadian institutional investor. It comprises a project company of the renewable arm of French energy company EDF and an offshore wind investor called Maple Power, which is backed by a Canadian state pension fund.

The final French consortium includes TotalEnergies, Macquarie-backed fund Green Investment Group, and French independent power producer Qair, which operates more than 600 MW of renewable capacity in France.

TotalEnergies and EnBW also secured leases in the UK's February bottom-fixed offshore wind leasing bid round.

The bidders will now work with the government on specifications and how to address concerns that consultation participants raised on the facility's impact on fishing.

Posted 22 September 2021 by Cristina Brooks, Senior Journalist, Climate and Sustainability