Posted on Jul 18, 2020, 10:42 a.m.Updated on Jul 18, 2020 at 11:29 p.m.
It is one of the side effects of the health crisis. This year, public support renewable energy electrics will cost much more than expected. According to the latest estimates from the Energy Regulatory Commission (CRE), an additional cost for public finances of billion euros is expected.
An increase linked to the fall in market prices
“This increase is very largely the result of the significant drop in market prices compared to the market prices expected during the assessment of the forecast (- € 18.5 / MWh) due in particular to the state of health emergency” , explains CRE in its deliberation.
Benefiting from priority access to the electricity distribution network, wind turbines and solar panels continued to produce at full capacity throughout the confinement period, even as demand for electricity and prices collapsed. This is all the more so since the winds were particularly favorable to wind energy in the first quarter.
However, thanks to tendering mechanisms intended to accelerate the growth of these energies, these installations benefit from a feed-in tariff for the electricity they produce guaranteed by the State. And at the heart of the health crisis, market prices for electricity have gone into negative territory several times…
In total, according to the regulator’s forecasts, 5.8 billion euros will be necessary to finance aid for renewable electric energies in 2020 against a budget of 4.7 billion originally planned. The phenomenon logically generates an increase in public energy service charges. In addition to support for renewable energies, these charges include the additional costs linked to tariff equalization in areas with little or no connection to the electricity network (ZNI) or other social measures. They should reach 8.851 billion euros in 2020 against 7.929 billion euros initially planned.
For the State, the step to be taken compared to the budgetary charges of 2019 is notable. CRE estimates that the cost of support for electrical renewable energy amounts to 5.167 billion euros in 2019. All the more so than TICPE (tax on petroleum products) and TICC (tax on coal) which finance each year the “Energy transition” special allocation account in the state budget will be much more constrained in 2020, again due to the effects of confinement.
For the regulator, this is only the beginning. With in particular the acceleration of the energy transition and the entry on the network of 6.5 Twh of new renewable electricity production capacities, the costs of the public energy service should reach 9.1 billion euros in 2021.
The cost of support for photovoltaics pointed out
In this context, the regulator warns: “in order to achieve the energy policy objectives, taking into account the amount of charges to be financed by the state budget, it appears necessary to make choices as to the installations to be supported, depending in particular on the cost of their support. “
CRE points in particular to the disproportionate cost of photovoltaic aid: we would like to “stress the weight of the photovoltaic bubble created before the moratorium in December 2010 and the importance that there would be to try to reduce it. In fact, the installations benefiting from a support system prior to the moratorium, whose average purchase price is € 510 / MWh, represent 73% of the charges and 38% of the photovoltaic energy supported for 2019 ”.
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