Wind turbine construction costs rise, France lets new parks sell at market prices

The French government has approved an 18-month deferral during which new wind farms may sell electricity directly on the wholesale market. The safeguard measure is intended to increase power generation revenues and thereby offset higher construction costs.

Rising wind turbine construction costs, driven mainly by post-Covid inflation, the war in Ukraine and increasing material prices, have already required intervention by the French government. It has adopted a regulation under which projects with no more than six turbines may sell electricity directly on the wholesale market for up to 18 months.

During this period, operators of smaller wind farms can secure higher revenues than they would receive under the support scheme, which in this case is provided in the form of a contract for difference (CfD). The government hopes the measure will minimise the number of projects that ultimately fail to go ahead because of higher costs.

Rising wind turbine construction costs are illustrated, for example, by the average selling prices of one of the leading manufacturers, Danish company Vestas. While the average selling price of an onshore wind power plant was 830 000 EUR/MW in 2021, it had reached 1 060 000 EUR/MW by the third quarter of 2022.