France’s offshore wind expansion includes 14.2 GW of new capacity over the next two years, with 6.7 GW coming from floating wind projects.
PARIS (AURORA ENERGY RESEARCH)—France’s latest offshore wind tenders AO4 (Fixed Offshore) and AO6 (Floating Offshore), are set to provide a major boost to consumers, potentially saving nearly 18 billion € in electricity costs in 30 years, according to power analytics provider, Aurora Energy Research.
The findings come as France has awarded the contracts for two 250 MW floating wind farms, located in the Mediterranean (Project 1: Occitanie, Project 2: PACA), under its most recent offshore wind tender (AO6), in addition to the 1 GW of fixed wind offshore (AO4) in Normandy. This is a move aimed at boosting renewable energy capacity and lowering electricity prices. While the government guarantees a 20-year Contract for Difference (CfD) to the winners of such tenders, Aurora examined whether costs outweigh the benefits.
Although France’s energy regulator CRE estimates that the government will face a net cost of 1.3 billion € for the AO6 project, Aurora’s revised projections show a far smaller cost of 150 million € for the state under its Central scenario, which is Aurora’s most up to date forecast. For the AO4 project, CRE predicts that the government will have a net gain of 4.8 billion €, while the candidate’s business plan estimates 3.4 billion €. In Aurora’s Central scenario, the projected net gain is 3.0 billion €, closely aligning with the candidate’s business plan estimate.
The addition of these wind farms is expected to reduce wholesale prices, benefiting consumers through lower electricity costs. Aurora’s estimate for the indirect benefits to consumers distinguishes between two cases: in the first case, Aurora’s model sees new capacities being built or prolonged to fill the gap left by the absence of the wind farms. In the second case, Aurora estimates the impact on electricity prices if no additional capacity is built. In both cases, Aurora computes the difference in total electricity costs to consumers with and without the offshore wind farms.
In the second scenario, where no new capacity is built as replacement, electricity prices would be higher by up to 24.6 billion € for AO4 and 12.3 billion € for AO6. In this case, the power missing from the offshore wind is compensated by increased imports mostly as well as increased gas and nuclear power generation. In the first scenario, new solar capacities are built, and gas power plants are kept open for longer, resulting in additional costs to consumers of 12.8 billion € for AO4 and 5.1 billion € for AO6.
France’s offshore wind expansion includes 14.2 GW of new capacity over the next two years, with 6.7 GW coming from floating wind projects. Aurora estimates the government’s long-term investment in floating wind energy to deliver substantial rewards for consumers, positioning France as a leader in the global renewable energy transition.
Pierre Dennery, Head of France, at Aurora Energy Research, stated:
“Our analysis shows that offshore wind tenders significantly impact French power prices. While AO4 offers net gains for the state, AO6 entails costs—though lower than official estimates. Crucially, AO4 and AO6 combined reduce consumer power costs by nearly 18 bn € over the lifetime of the projects.”
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Established in 2013, Aurora Energy Research is a leading global provider of power market forecasting and analytics for critical investment and financing decisions. Headquartered in Oxford, we operate out of 15 offices worldwide covering Europe, North & South America, Asia, and Australia. Our comprehensive services include market outlook packages for energy industry participants, advisory support, and innovative software solutions. We foster diversity with a team of close to 1000 experts with backgrounds in energy, finance, and consulting, offering unparalleled expertise across power, renewables, storage, hydrogen, carbon, and fossil commodities. Our mission is to facilitate the global energy transition through widely trusted quantitative analysis and high-quality decision support.
