France Launches Review Mission to Control Renewable Energy Costs

France Launches Mission to Review Renewable Energy Costs

The French government has initiated a special mission to evaluate the financial impact and cost structure of renewable energy sources such as wind and solar power. Led by energy experts including former EDF CEO Jean-Bernard Lévy, this initiative aims to propose a more sustainable and effective support system for renewables amid rising public subsidies and evolving market conditions.

Understanding the Current Support System

France currently uses fixed-price contracts guaranteeing producers a set rate for their electricity, regardless of market fluctuations or consumption levels. This can result in surplus electricity and negative market prices during low demand, causing the state to pay producers the difference between the guaranteed price and the market price. In 2024 and early 2025, France saw hundreds of hours with negative pricing, highlighting inefficiencies in the current subsidy model.

Fixed-price contracts cover most wind and solar projects.
Negative electricity prices occurred over 350 hours in 2024.
Public subsidies for renewables are projected to reach around €7.7 billion in 2026.

Financial Implications and Political Context

Renewable energy support costs are a significant part of the French energy budget, amounting to billions of euros annually. The 2026 subsidies are expected to rise by 24% compared to 2025, reflecting increased renewable capacity and low wholesale market prices. This pressure comes alongside France’s broader budgetary constraints and targets to reduce emissions and increase renewable energy’s share to meet EU climate goals.

Politically, this mission coincides with debates about the country’s energy priorities, especially with voices both supporting renewables and critics questioning their costs. Some industry representatives have reacted strongly to the review, highlighting the high costs and delays in nuclear projects as a parallel area for scrutiny.

The Path Forward for Renewable Investments

The mission’s objective is to balance:

Fair distribution of costs between public and private actors.
Efficient subsidy mechanisms that avoid overcompensation.
Support for France’s green transition without excessive financial burdens.

France aims to continue expanding renewable capacity through competitive tenders and evolving support schemes that reduce guaranteed prices and emphasize market integration.

Impact on Consumers and the Energy Market

While subsidies increase, low market prices partially offset higher support costs, helping to moderate electricity bills for consumers. Increased renewable generation also supports France’s goal to decarbonize energy production and boost electricity exports.