High energy prices are finally making wind turbines profitable

At a time when the two finalists in the presidential election want to back down from onshore wind power, the sector fears for its future. And because of while Emmanuel Macron has lowered his ambitions on the subjecthighlighting the landscape preservation “Marine LePen calls purely and simply for the dismantlingin addition to a moratorium, which would therefore directly endanger existing facilities.

Faced with these proposals and while 13.7 GW of projects are currently being examined, professionals in the sector intend to make themselves heard. And this time brandish the economic argument, until now many times used against him. Because the budgetary equation has been inverted, they say: subsidized for a long time, these giant shovels that dot the French territory, in particular in the north and east of the country, could in fact relieve public finances in these times of exploding prices. energy, says the association France Energie Eolienne (FEE). And thus allow the State to redistribute the ” Profits » obtained, in order to « protect purchasing power “citizens.

A net income for the State from 2025

In 2021, the wind sector has effectively delivered to the State all of the 1,800 million euros in subsidies that it had received, and therefore ” ceased to be a burden on public finances “, welcomes the association. Above all, if we are to believe their forecasts, the sector should even generate exceptional recipes in 2022, as there will be a surplus of 3.7 billion euros. Therefore, it will bring back this sum. equivalent to the budget of the Ministry of Culture “to the State at the end of the year, underlines FEE, which calls for leaving” postures of certain politicians accusing wind energy of being expensive and unnecessary ».

“By the end of the year, the wind sector will have donated 34% of what it has received since the beginning of the aid in 2003”, specifies its president, Anne-Catherine de Tourtier.

Above all, the calculation must well benefit the budget of France, which has so far put the sector on a trickle to support its development. Because the equivalent of all the public support it has received since 2003” will have been donated by the last quarter of 2024 “, or about 11 billion euros, if prices remain in line with the forecasts of the Energy Regulation Commission (CRE).

By 2035, wind power will even generate an estimated net income of €18 billion for France, if the country meets the ambitious targets it has set for itself in this area, says FEE. What pushes the candidates to reconsider their positions and encourages them to massively develop this source of renewable energy, expects Anne-Catherine de Tourtier.

Wind power benefits from rising prices

But this new profitability does not come out of nowhere. In fact, it is due to the explosion in the “spot” price of electricity, which has gone from about 50 euros per MWh on average to more than 250 euros today. This has made wind turbines very competitive against fossil fuels, which until now were considered cheap but whose prices are skyrocketing. Added to this is a more structural downward movement in the costs of renewables, as they have plummeted throughout the decade. Traded for a long time at 200 euros per MWh, offshore wind power has even fallen to just 45 euros (purchase price of the future Dunkirk park), well below current market prices for fossil gas.

Three questions to understand the rise in electricity prices in France

However, the contracts provide financial compensation to the renewable energy operators when the “spot” prices are lower than a target price, set during the calls for tender, but also, in return, the payment of the surplus to the electricity public when these prices are higher. ” A win-win mechanism for wind power and the State “, presumes FEE today, since wind energy producers can now take advantage of the crisis to pay their “debt”.

And if the association estimates that everything will have been reimbursed by 2025, it is simply because prices in the electricity market should remain high, and hover around 200 euros per MWh until that date, before stabilizing around 90 euros per MWh. in the next ten years, according to the CRE’s perspective. ” In terms of orders of magnitude, FEE’s estimates of wind revenue appear realistic “, confirms a CRE source to The galery.

uncertain forecasts

However, these figures are still estimates, and no one knows today how to accurately predict price developments in the coming months. The government had long claimed that the price increase was only ” cyclic “and would calm down with the arrival of spring, before admitting that it will last” most likely for a long time, without mentioning a date. The outcome is all the more uncertain as the war in Ukraine, which started almost two months ago, is destabilizing the markets a little more, leaving analysts unarmed.

“The CRE calculates the charges for the public energy service once a year, and the next settlement will be published only in July, while the work is in progress,” specifies one to the CRE.

The international situation could also weigh heavily on the wind industry, as the steel used for offshore towers is currently selling for more than $2,000 a tonne, about three times more than a few months ago. ” The state of the supply chain is […] unhealthy right now […] because we have an inflationary market that exceeds what nobody predicted even last year “, This was recently warned by Sheri Hickok, general director of GE Renewable Energy (French subsidiary of the American General Electric). And to emphasize that the war has all messed up for onshore wind power, the cost of which could rise.

War in Ukraine: after oil, gas… the price of steel skyrockets