EDF EN delays solar plant on French law changes

PARIS (Reuters) - French policy changes for the solar power industry have forced EDF Energies Nouvelles to delay the construction of the country’s largest solar panel plant, the renewable energy arm of EDF said on Friday.

David Corchia, Chief Executive Officer of EDF Energies Nouvelles, poses for photographers before the company's 2008 annual results presentation in Paris February 11, 2009. REUTERS/Gonzalo Fuentes

Work at the 90-million euro ($119.8 million) plant was initially expected to start in January 2011 but EDF EN said regulatory changes meant it and U.S. venture partner First Solar now had no firm idea on the project’s profitability.

The French government said earlier this month it sought to end what it called a “speculative bubble” by cutting the number of new projects and the price at which EDF buys the electricity from solar power producers -- marking the government’s third move in 12 months to regulate the budding industry.

Under the latest change, no new projects will be approved until February 2011, when the government decides on a new framework, a moratorium which small and medium-size solar businesses fear may fatally wound the burgeoning sector.

“It (the project) is delayed by two to three months while we see what happens,” EDF EN Chief Executive David Corchia told Reuters in a telephone interview.

The plant, if it goes ahead, will employ 400 people and produce panels with a total annual production capacity of around 100 megawatts, enough to provide electricity to 50,000 homes.

EDF EN had agreed to finance half of the investment and had committed to purchase the plant’s output for the first 10 years.


“But I want to believe that France will take the decisions which will mean that we will find ways to build this factory in France,” Corchia said. “This needs to happen quickly as we will not be able to suspend the project for one year.”

Changes in support policy will delay the solar panel factory but they are unlikely to impact EDF EN’s overall business, Corchia said.

“The short-term impact (of French regulatory change) is almost non-existent... because we are present in 13 countries and because France only makes up 15-20 percent of our business,” he said, adding EDF EN was on track to install 4,200 MW of capacity in green energy worldwide by 2012.

The largest part of this will come from wind. EDF EN had installed only 140 MW in solar power output capacity by June 2010 throughout the world since 2007.

But Corchia acknowledged changes to the support policy were needed.

Renewable energy schemes around the world have been supported by so-called “feed in tariffs” which pay producers of green energy well above the wholesale rate for their input.

“It was not possible to leave things like that, because it’s not good for an industry when purchase tariffs are too high.”

Many other European countries, such as the Czech Republic, Spain or Italy, are also cutting back generous subsidy schemes after connection demand boomed, threatening to swell bills and jeopardize power distribution systems in some countries.

“Everywhere in the world, we bear the brunt of accelerating and slowing down policies which is why we are in so many countries,” he said.

Editing by Marie Maitre and Keiron Henderson