2023-10-28 11:33:39
The Constitutional Council opposes the State’s desire to capture profits from solar and wind power within the framework of supplementary remuneration contracts.
The Constitutional Council censored a provision of the 2022 amending finance bill which lifted the cap on payments requested by the State from renewable electricity producers once morest a backdrop of soaring market prices.
In its decision rendered Thursday, the institution, seized by the Council of State of a priority question of constitutionality (QPC), “censors the insufficient precision of the provisions” establishing this removal of the ceiling. On the other hand, it does not contest their substantive conformity.
An appeal filed before administrative justice
To support renewable energies, since 2015 the State has put in place “additional remuneration contracts” between producers and EDF, to guarantee them a price.
If market prices rise and exceed this guaranteed price, producers then pay the difference to the State. Some of these contracts, however, set a ceiling on these payments, within the limit of the total aid received by producers, which the government wanted to eliminate from January 1, 2022.
France Renouvelables (formerly France Energie Eolienne) filed an appeal before the administrative courts, contesting the retroactivity of the decision and pointing to “a disproportionate attack on the right to maintain legally concluded agreements”.
In its decision, the Constitutional Council considered that the legislator did not sufficiently specify its provisions, which “are limited to referring to a ministerial decree the setting of a threshold price according to which the payments due are calculated”. Therefore, “the legislator misunderstood the extent of its competence in conditions affecting the right to maintain legally concluded agreements”, he judges.
“An objective of general interest”
However, in substance, “in a context of sharp increases in electricity prices (since the end of 2021 Editor’s note), the legislator intended to correct the windfall effects from which producers who received public support benefited, in order to to mitigate the detrimental effect of this increase for the end consumer. In doing so, it pursued an objective of general interest,” he believes.
Neither Bercy nor representatives of the renewable sector were able to provide an estimate of the shortfall for the state budget. According to Les Echos, this might represent two to three billion euros for 2022 and 2023. For the future, Bercy indicates “studying the decision of the Constitutional Council”, estimating that “it is still too early to make a comment” .
“If there is a rewriting of this provision, it must be done in consistency with the sector”, in particular to define the threshold price, asks Michel Gioria, general delegate of France Renewables, highlighting the “wall of investments” which awaits the sector in a context of inflation and rising interest rates.
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