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Renewables firm Quadran wants to buy and sell power like EDF
March 24, 2017 / 5:01 PM / 9 months ago

Renewables firm Quadran wants to buy and sell power like EDF

* Start-up Quadran wants to be power market aggregator

* Buyers and sellers now need to pass via EDF

* Quadran wants to sell own and other’s green power

* French market liberalisation decrees not published

By Geert De Clercq

PARIS, March 24 (Reuters) - French renewable energy producer Quadran is pushing for regulatory change so it can sell its own power without having to go through market leader EDF and hopes in the future to be able to sell power from other producers too, its CEO said.

Quadran, which operates about 500 megawatts (MW) of installed renewable energy capacity, in December bought Enel France, giving it access to a portfolio of about 2,000 business and professional clients and making it into one of the few French smaller power generators with a sales network.

Like other French power market start-ups such as Voltalia and Neoen, Quadran is legally obliged to sell the subsidised renewable electricity it produces to EDF under long-term contracts. It cannot sell its own power to its own clients, but needs to buy it from EDF or on wholesale markets.

France’s energy transition law, voted in 2015 includes provisions to end EDF’s monopoly on power market aggregation - the right to buy and sell - but the decrees to implement that part of the law have not yet been published and are unlikely to be before elections in April-May.

Quadran is now lobbying energy regulator CRE to free up power aggregation to make it a more decentralised market like German and other northern european markets.

“We want to be able to sell our own power, just like EDF, and not have to pass via EDF,” Quadran CEO Jerome Billerey told reporters. Asked whether Quadran wanted to become a mini-EDF itself, he said: “Exactly”.

He said Quadran’s power production, 1 terawatt/hour (TWh) per year, is not linked to its sales, which total 2 TWh per year. Total annual French sales add up to about 550 TWh.

Smaller retail specialists such as Direct Energie have also started acquiring generation assets, but they too need to trade via EDF.

For power produced by Quadran’s wind turbines, EDF pays the subsidised rate - about 82 euros - and then recuperates the difference between that rate and the cost of its nuclear power from the state in the form of the CSPE renewables tax.

Carole Lajous, head of Quadran power sales, said Quadran wants to have the right to not only sell its own power, but also wants the right to buy renewable power from other producers and collect the renewables tax like EDF.

Under new market rules that kicked in early last year, renewable power can now be sold directly to aggregators, which can earn a 2.8 euros per MW aggregation fee, but volume in that segment is tiny for now, which is a barrier to market entry.

“For aggregation to work, you need volume,” Billerey said.

Quadran estimates that a liberalised French power aggregation market could be worth an annual 3 billion euros ($3.2 billion) by 2020. ($1 = 0.9258 euros) (Reporting by Geert De Clercq; Editing by Elaine Hardcastle)

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