Rising energy prices make renewables profitable for public finances

Due to rising energy prices, fees related to subsidizing renewable energies will be negative for the first time in 2023, according to CRE.

On Monday, the French energy policeman indicated that the global rise in energy prices makes, for the first time, the public service fees that will be compensated by renewable energy operators negative in 2023, which means revenue for the state.

The Energy Regulatory Commission noted in a press release issued on Monday that “the costs related to the support of renewable energies in the French capital region are declining due to the exceptionally high level of wholesale electricity and gas prices.”

“In particular, wholesale electricity prices have become on average higher than the tariffs guaranteed by the state in contracts to support renewable electric energies, and therefore what in previous years constituted fees to the state budget represents for the first time a recipe for public finances “, points out the CRE.

Revenues estimated at 8.6 billion for the state budget

The state pays the operators when the market price is less than the guaranteed price, and conversely, the operators must return the revenue to the state when the market price exceeds the guaranteed price. The Investment Committee estimates the amount of fees to be compensated by the state towards operators for 2023 at “11.1 billion euros, a decrease of 18.7 billion euros compared to the assessment made last year for 2022, which amounted to 7.6 billion.” During these two years, the projected revenue associated with renewable electric energies will reach “8.6 billion euros cumulatively for the state budget”.

It is a recipe in which the onshore wind sector contributes mainly, “to the tune of €7.6 billion”, as the PV sector “continues to marginally affect public service costs to the tune of €0.9 billion” in cumulative terms. For this sector, the “heaviness of historical contracts”, concluded at launch “at high prices, has not yet been offset by new contracts that contribute positively to public finances”, adds CRE. Finally, the hydraulic sector makes a positive contribution of €0.8 billion cumulatively for 2022 and 2023.

Leave a Comment