16 August 2010, Bloomberg New Energy Finance, By Marc Roca

• France Opens $1.75 Billion Support Program for Renewable Energy Industries*
  France is following the footsteps of other European governments in providing a combination of loans and grants for high cost, emerging renewable energy
  The French government has opened a program aimed at giving 1.35 billion euros ($1.75 billion) in financial support to the renewable energy and biofuel-chemistry technologies by 2014.

The Environment and Energy Management Agency’s program is the first of several sustainable development-related plans set out in the country’s future investments bill passed in March. It was detailed on Aug. 8 in France’s official bulletin of new regulations, a spokeswoman for the agency said by e-mail.

The renewables program, known as demonstrateurs energies renouvelables et chimie verte, will allocate 450 million euros in subsidies and 900 million euros in loans. Funds will go to industries including solar, marine, geothermal, carbon capture and “green chemistry” for biofuels, the spokeswoman said.

“France is following the footsteps of other European governments in providing a combination of loans and grants for high cost, emerging renewable energy technologies,” said Charlie Hodges, an industry analyst at Bloomberg New Energy Finance in London. “While the French government has historically backed mature, low cost, emission-free technologies like nuclear and onshore wind, these funds will directly assist companies at the other end of the energy cost spectrum.”

The support will focus on three key stages between the research phase of the project and commercial development. They include research demonstration projects, pre-commercialization experiments and technological testing platforms, according to the bulletin. A total of 190 million euros are earmarked for 2010 and 290 million for each of the next four years.

Technology Boost
The agency will publish “road maps” with more details about its requirements before it invites expressions of interest from companies and research institutions. It’s aiming to attract 2 billion euros from private companies to complement the government funds.
The environment agency plans to open two other programs under the bill, including a 1 billion-euro plan to develop sustainable transportation and a 250 million-euro measure to develop smart-grid technologies, the spokeswoman said.

The measures follow the agency’s more modest four-year research demonstration fund program created in 2008 out of France’s first major environmental law, or Grenelle 1, she said. That 325 million-euro fund focuses on transport, energy and housing, also aiming to help the country reach its future carbon reduction and renewable goals.
The programs also follow the final approval in late June of France’s second major environmental law, or Grenelle 2, which enacted policy in a sectors ranging from transport to agriculture, waste and energy.