French Economy Minister Bruno Le Maire and Agnès Pannier-Runacher, the nation's energy transition minister, said on Nov. 10 that the government will set up a guarantee fund to support power purchase agreements for renewables. By covering default risks for industrial buyers, the fund will help to facilitate the signing of long-term PPAs with industrial companies.

“This is a major step forward that will make it possible to remove one of the main obstacles to the development of long-term energy supply contracts,” said Pannier-Runacher. “This system is complementary to the measures that we are taking in favor of PPAs within the bill to accelerate renewable energy.”

French financial services provider Bpifrance will run the system, with the aim of securing the first contracts in 2023. The fund will enable the closing of contracts for up to 500 MW of cumulative installed power.

“Our ambition is there,” said Roland Lescure, the minister delegate in charge of industry. “And it is only the beginning.”

The terms of the compensation granted to contracts in default will operate on a mode close to additional remuneration. The fund will be self-funded by the premiums paid by guaranteed contracts and the recovery of part of their excess income, in the event of high market prices.