The decree of March 14, 2011—commonly referred to as the "renovation decree"—grants eligibility for feed-in tariffs beyond 2012 to hydroelectric plants that have undergone or will undergo qualifying renovation investments. It provides operators with the opportunity to once again benefit from state-guaranteed tariffs for electricity sales, subject to the completion of investments validated by the administration.
The main issues and key questions currently facing operators include:
- Assessing the eligibility of their plants under the decree by determining the applicable thresholds based on past and planned investments
- Optimizing the reference investment period and modeling the feed-in tariffs they can secure
- Managing and completing the required administrative procedures: negotiating grid access terms with the network operator, obtaining the feed-in tariff certificate from the DREAL, and notifying EDF
New Tariffs
The complexity of the tariff formula introduced by this decree requires particular attention. As with other renewable electricity schemes, optimizing future revenues depends on:
- The indexation of the initial contract tariff: the effective contract start date is critical and may significantly—and irreversibly—affect the plant’s long-term revenues
- The accurate inventory of investments to be included in the official declaration
Additional Considerations
Other factors also play an important role, depending on the power and specific characteristics of each hydro plant.
In some cases, despite the introduction of this decree, operators may still choose the competitive market. By partnering with electricity suppliers, brokers, or wholesalers, they can avoid certain investment requirements while still benefiting from favorable market prices.
Ultimately, the evolution of wholesale electricity prices—shaped by the implementation of the new Electricity Law (NOME)—is expected to weigh heavily on operators’ choices. Many are likely to delay their decision for several months, given the complexity and long-term implications involved.
