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Earlier this month, we presented a review of the main provisions of the French Energy Transition Act. These provisions are likely to have a direct or indirect impact on companies. We discussed the publication of decrees on the national low-carbon strategy and the multi-year energy plan, building construction and renovation, employee travel, and thecircular economy and waste.
In this new article, we take a look at the new measures concerning :
- 1. The economic mechanisms of energy management in the energy transition,
- 2. Electricity generation from renewable sources,
- 3. Greenhouse gas (GHG) emissions reporting
1.economic mechanisms for energy management in the energy transition
Electric-intensive and gas-intensive consumers - Decrees no. 2016-141 of February 11, 2016 and no. 2016-1518 of November 9, 2016
Eligibility criteria for electro-intensive and gas-intensive consumer status have been defined. They also set out the terms and conditions enabling the companies concerned to benefit from reduced tariffs for use of the electricity and gas transmission and distribution networks. Eligibility criteria are based on :
- the ratio between annual gas or electricity consumption and the added value produced by the company or site,
- the company's or site's exposure to international competition,
- the quantity of electricity or gas consumed by the company.
Electricity consumption balancing systems- Decree no. 2016-1132 of August 19, 2016 and Order of December 22, 2015
New mechanisms for balancing electricity supply and demand to ensure continuity of power supply have been defined.
1. Electricity consumption reduction
Load shedding" consists in temporarily reducing or interrupting the electricity consumption of certain voluntary consumers, in order to manage occasional imbalances between electricity supply and demand. In practice, companies can enter into contracts with "load shedding" operators, who are responsible for :
- identify potential for reducing consumption during peak periods or network contingencies
- to provide financial compensation for load shedding
Load shedding can also be integrated into certain electricity supply offers.
2. Interruptibility
The interruptibility system enables the operator of the public electricity transmission network(RTE) to cut the consumption of large industrial sites with back-up power sources in a matter of seconds. In exchange for helping to reduce the risk of power system failure, the sites concerned receive financial compensation of up to €70,000 per megawatt of interruptible power.
The order of December 22, 2015 details:
- technical details of the interruptibility system
- conditions for RTE approval of sites with instantaneous interruption profiles
- the conditions under which RTE compensates approved final consumers
Energy saving certificates (CEE) - Decree no. 2015-1823 of December 30, 2015
As a reminder, the CEE scheme primarily concerns energy suppliers (electricity, gas, LPG, heating and cooling, domestic heating oil and automotive fuels), who are subject to energy-saving obligations over multi-year periods.
To meet their obligations, energy suppliers must carry out energy-saving operations for consumers. In return, they are awarded energy saving certificates.
This gives energy-consuming companies the opportunity to enter into partnerships with energy suppliers to carry out energy-saving actions that can be valorized in the form of CEE. The process for obtaining CEE over the period 2015-2017, and in particular the categories of operations eligible for CEE, has been defined. Standardized energy-saving operations that can be carried out on industrial sites are still concerned (e.g.: heat recovery system on a cold production unit, low-pressure screw or centrifugal air compressor).
2. Electricity generation from renewable sources
A number of provisions relating to the production of electricity from renewable sources offer new opportunities for companies embarking on this approach.
Authorizations to operate a facility producing electricity from renewable sources - Decree no. 2016-687 of May 27, 2016
The thresholds for renewable energy electricity generation facilities to be deemed authorized under the Energy Code without having to take any steps have been raised:
- Photovoltaïque, Biomasse animale ou végétale, Biogaz, Géothermie : autorisation sans démarche pour les installations de puissance < ou = à 50 MW contre 12 MW auparavant.
- Eolien : autorisation sans démarche pour les installations de puissance < ou = à 50 MW contre 30 MW auparavant.
The decree also simplifies the content of the authorization application file and the administrative procedures to be carried out for facilities whose power exceeds these thresholds.
Obligation d'achat and complément de rémunération - decree no. 2016-682 of May 27, 2016
The conditions under which electricity production facilities from renewable sources can benefit from the new remuneration supplement scheme and continue to benefit from the feed-in tariff are specified. The remuneration supplement is an alternative mechanism to the purchase obligation created by the LTE. It involves selling electricity generated from renewable sources directly on the market, in return for payment of a premium by EDF.
The "obligation d'achat" system, which pre-existed the LTE, enables renewable electricity production facilities to sell the electricity they produce to EDF under regulated tariff conditions. Several new features have been introduced:
- certain facilities can benefit from a second purchase obligation contract. One proviso: carry out an investment program for this facility.
- the main installations eligible for the remuneration supplement scheme are set out below:
- the procedure for benefiting from the remuneration supplement, and its relationship with the feed-in tariff, are defined.
3. Reporting greenhouse gas (GHG) emissions
Non-financial reporting - Decree no. 2016-1138 of August 19, 2016
The "significant items of greenhouse gas emissions generated by the company's activity, in particular through the use of the goods and services it produces" are included in the information required in the non-financial report of all companies concerned (listed/unlisted).
The inclusion of data on greenhouse gas emissions indirectly generated upstream and downstream of activities (Scope 3) becomes, in principle, mandatory from the financial year ending December 31, 2016.
GHG emissions balance - Order no. 2015-1737 of December 24, 2015, Decree no. 2015-1738 of December 24, 2015, and Order of January 25, 2016
The changes are as follows:
- the frequency for updating greenhouse gas emission reports is increased from 3 to 4 years. Objective: align with the frequency of regulatory energy audits
- failure to complete the assessment is punishable by a €1,500 fine
- balance sheets must be published on an IT platform managed by ADEME
- groups of companies now have the option of drawing up a consolidated GHG balance sheet for all their companies. These must have the same level 2 French activity nomenclature (NAF) code.
In the end, there are still some thirty measures in the Energy Transition Law for which the implementing decrees have not yet been published. Among these, the draft decree on obligations to improve energy performance in existing commercial buildings is perhaps the most eagerly awaited.
As a reminder, in accordance with Article L. 111-10-3 of the French Construction and Housing Code, existing commercial buildings must undergo energy performance improvements by January 1, 2020, and then every 10 years until 2050. The level of performance to be achieved will be increased each decade, with the aim of achieving a reduction in final energy consumption of at least 60% by 2050, compared with 2010 levels, for the entire tertiary building stock concerned. The decree announced today will set out how this obligation will be applied by 2020.
The last major deadline in preparation is the 2018 Thermal Regulations (RT), which will target the development of positive-energy and low-carbon construction. To prepare for these new regulations, the "energy-carbon" label was launched in September 2016.
The energy transition in conclusion
While the energy transition is necessarily a long-term process, spanning several decades, the adoption of over 80% of the law's implementing decrees less than sixteen months after its publication already represents an important first step. However, despite this major regulatory effort, uncertainties persist as to whether the ambitious objectives of the Energy Transition Act will be met. This is due in particular to the fact that the first PPE was published, in part inconsistent with these objectives, and to the fact that the immediate application of these measures is still limited in scope.