The French government has signed amendments to power purchase agreements with three offshore wind farms, giving them the ability to limit or completely stop generating power during periods of negative market prices. This measure reflects the growing need for the energy system to adapt to new realities: more renewable generation against a backdrop of stable or declining electricity demand.
Until recently, the offshore wind farms at Fécamp and Saint-Nazaire, controlled by Electricité de France (EDF), as well as the Saint-Brieuc wind farm owned by Spain’s Iberdrola, sold their electricity at fixed prices under government subsidies. This meant that even during periods when market prices fell below zero, the state continued to buy electricity from them, sometimes at a price higher than it could be sold on the market.
Changes in the contracts allow production to be switched off during periods of negative prices, which reduces the load on the energy system and financial losses. It also makes the market work in a more balanced way and paves the way for a more flexible model of renewable energy regulation.
The government has also announced that the largest onshore wind farms operating under the old feed-in tariffs will soon be able to participate in similar arrangements. While new renewable energy facilities already operate under a feed-in premium system that incentivises shutdowns in the face of negative prices, older installations have until recently continued to operate regardless of market conditions.
