French News Archive

Money & Finance

Turbulence Over Wind Power Charges

Wednesday 02 July 2014

Wind power electricity tariffs have been judged to be illegal, but there will be no change in your French electricity bill for the extra charges you pay for it.

The tariffs fixed by the French Government for the obligatory repurchase by EDF of electricity generated from wind power amount to a State subsidy, according to a recent judgement of the European Court of Justice (ECJ).

These tariffs are considerably higher than the market price for electricity generation.

The ECJ decided that as France did not comply with the notification procedure to the EU regarding State aid when they introduced the tariffs in 2008, this rendered the tariffs illegal.

Last month annulment of the tariffs was duly confirmed by the French administrative court, the Conseil d'Etat.

The decision might have been one that was of little interest to the consumer, except for the fact that the extra costs to EDF of buying electricity from wind power producers at the higher tariff is compensated to them through a charge on consumers.

This charge is called the Contribution au service public de l’électricité (CSPE), which is shown separately on electricity bills.

However, the French energy regulator has decided that the charge in respect of these tariffs will not be refunded, arguing that the revenues from it did not have a direct influence on the level of State aid.

The CSPE amounts to around 7% of an average electricity bill, although the part relating to wind power accounts for 5% of the charge.

The decision of the regulator will come as a disappointment to a leading English language newspaper in France, which has been running an extensive front page campaign on the issue, urging readers to make early application for a refund of overpaid charges.

However, according to the leading consumer rights group in France, Que Choisir, there was never a realistic prospect of these charges being refunded, as the case before the ECJ only concerned the expenditure generated by the tariffs, not the CSPE itself. According to established case law, the annulment of a State aid does not invalidate the tax that finances that aid.

It is perhaps because of this that there has been a surprising lack of interest in the issue from the main consumer groups in France, none of whom have campaigned for reimbursement of the charge.

In anticipation of the decision, the French Government have confirmed the continued use of the existing tariffs on the basis of an earlier decree, pending the outcome of consultations with the EU Commission on a new regulatory framework.

Accordingly, producers of electricity from wind power will be permitted to use the current tariffs, which will also continue to be recovered through the additional charge on consumer electricity bills.

The legal action to the ECJ was brought by the anti-wind power campaign group Vent de Colère.

Related Reading

Thank you for showing an interest in our News section.

Our News section is no longer being published although our catalogue of articles remains in place.

If you found our News useful, please have a look at France Insider, our subscription based News service with in-depth analysis, or our authoritative Guides to France.

If you require advice and assistance with the purchase of French property and moving to France, then take a look at the France Insider Property Clinic.