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Arnaud Susplugas, founder and CEO of Kyotherm, answered questions from GreenUnivers in the spring of 2020. The online medium dedicated to France’s energy and environmental transition describes the current state of renewable heat in France, through a comparison with the UK and the Netherlands.

Excerpts from the GreenUnivers article:

Kyotherm’s development in the UK

It’s not in France that business is done, but in the UK, Germany, the Netherlands and even on other continents. Such is Kyotherm’s experience. This investor-producer has been able to close 45 MW of new projects in the last 12 months, i.e. half of the 90 MW it has completed since its creation in 2011, on a scope of projects worth less than €50 million. Recent projects include a future 20 MW geothermal power plant near Leeds in England for an industrial buyer, and 9 MW from biomass, again across the Channel.

Gas prices and carbon tax freeze slow French renewable heat market

Gas costs €14/MWh on the futures market. Renewable heat projects are at 60€/MWh. In France, such a gap might have been manageable with a carbon tax trajectory towards €100 in 2030 and investment subsidies from the Fonds chaleur. But today, the only solution lies in a remuneration supplement or feed-in tariff, to support operation rather than investment,” explains Arnaud Susplugas, President of Kyotherm.” 

“The situation is complicated by the fact that European Community rules on state aid cap subsidies at between 45% and 65% of Capex, depending on the size of the project. In practice, a MWh of heat is subsidized to the tune of €15 to €20. The difference in the face of a collapsing gas price is quite simply impossible for the market to bear, says Arnaud Susplugas. Which confirms that the €200 million to €300 million jump in the Fonds chaleur is not enough.

The objectives of the multi-annual energy program are already not being met

Is France’s support policy up to the challenge? The new Multiannual Energy Program reminds us that France has European commitments in this area. The 2020 target for renewable heat of 33% of final heat consumption has been missed, and will not exceed 20%. What remains is a target of 38% by 2030, which is unlikely to be achievable under current conditions.