France Plans to Launch 82 GW Long-Term Electricity Capacity Auction

en.Wedoany.com Reported - On October 9, the French energy regulatory authority CRE published its recommended parameters for the first round of long-term electricity capacity auctions for the winter of 2030–2031, proposing a target procurement capacity of 82 GW, of which 3 GW could be procured through multi-year contracts. The regulator also recommended maintaining two capacity price caps, at €72/kW and €15/kW respectively, and proposed capacity certification parameters applicable to generation, energy storage, and demand response resources.

These parameter recommendations were developed based on the assessment report submitted by the French transmission system operator RTE. RTE has conducted consultations with market participants and carried out calculations on the adequacy of future winter electricity supply. Its assessment results show that under different scenarios, 0 to 2.5 GW of additional electricity capacity may be needed for the winter of 2030–2031. This additional capacity requirement and the total target capacity of the proposed auction are based on different statistical scopes.

The new capacity mechanism adopts an arrangement combining long-term and short-term auctions. Long-term auctions are in principle organized approximately four years before the start of the delivery period, while short-term auctions are held approximately one year in advance. On July 6, 2026, RTE completed the first round of short-term capacity auctions for the winter of 2026–2027. Subsequent long-term auctions will cover generation facilities, battery energy storage systems, and demand response resources capable of reducing load during peak electricity consumption periods.

Regarding the price mechanism, CRE recommends continuing to use the general price cap PPG and the intermediate price cap PPI. The two caps will be applied respectively to the corresponding capacity bids and cost control rules, with the final applicable conditions to be determined by the official auction documents. After obtaining contracts, capacity operators are required to provide available capacity during periods of electricity system stress as agreed, and RTE pays corresponding remuneration based on capacity availability performance.

CRE specifically studied the conditions for battery energy storage participation in capacity certification this time, incorporating batteries into the parameter design as an important technology category of the new capacity mechanism. The regulatory document also clarifies that capacity remuneration covers eligible generation, energy storage, and load reduction capabilities, and does not use new photovoltaic or wind power installations as the sole procurement target.

According to the transitional arrangements of the new mechanism, market participants need to first make capacity commitments for the winter of 2030–2031, and then successively determine the capacity contract arrangements for the previous three winters. CRE has submitted the demand curve formulation methodology and related techno-economic parameter recommendations to the minister responsible for energy affairs, and will subsequently adjust some parameters based on auction results and feedback from market participants.