France awards its largest offshore wind project to date in successful AO8 auction, while AO7 received no bids. A partly successful auction is positive news in a time where projects on the edge are at risk.
In September, the results of the AO7 and AO8 in France were announced, covering two fixed-bottom projects with capacities of 1 GW and 1.5 GW, respectively. Both auctions were launched in 2022 during a time where many developers were lining up for the same opportunities, reflected in multiple pre-qualified bidders announced in 2023.
🔹 AO8 was successfully awarded to a consortium of TotalEnergies and RWE, which secured the 1.5 GW site at a winning strike price of 66 EUR/MWh.
The site, which attracted two bids, will become the largest offshore wind project in the market.
🔹 AO7, targeting the Oléron 1 site, on the other hand, was unsuccessful as it received no bids.
Multiple factors potentially contributed to the unsuccessful outcome of AO7. As one of the deepest fixed-bottom projects, challenging site fundamentals add significant uncertainty and risks, resulting in less attractive economics despite the 20-year CfD support. This shows a more cautious approach by developers toward higher risk projects.
🔹 The market is now looking ahead to AO9, covering three floating sites, and which offers a feasible support budget for offshore wind’s new cost reality.
While waiting for the AO9 bidding to begin, a budget of EUR 11bn has been approved for two-sided 20-year CfDs, showing the French government’s willingness to support offshore wind and ensure its feasibility in the current climate.
Aegir Insights’ clients have access to a new Insights report, diving into the French auction outcome, analyzing factors contributing to the unsuccessful AO7, as well as the successful outcome of AO8, and can access analysis on the upcoming AO9 auction round.
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