On 15 April 2016, France's Supreme administrative Court, the Conseil d'Etat, ruled once again on the matter of the subsidies granted to wind power generators under Ministerial Order of 17 November 2008.

In two previous decisions of 15 May 2012 and 28 May 2014, the Conseil d'Etat had declared that this Ministerial Order was void due to the lack of prior notification to the EU Commission of the state aid granted to wind power generators. The Ministerial Order was cancelled with retroactive effect, but was soon to be followed by a new Order passed on 17 June 2014 that maintained the same tariff paid by EDF to wind farms.

The French government tried to limit the consequences of the cancellation on wind power generators.

EU regulations impose that an illegal state aid must be reimbursed by its beneficiaries, in order to give full effect to state aid rules. This reimbursement obligation, however, is limited when it applies to an illegal state aid that was ruled compatible with the European market. This was the case for the state aid in the Ministerial Order of 17 June 2014, which was considered compatible by the EU Commission on 27 March 2014.

In such cases, the state must only request the reimbursement of the "interest which would have been paid by generators on the amount in question of the compatible aid, had it had to borrow that amount on the market pending the Commission’s decision" (EUCJ, 12 February 2008, CELF, C-199/06).

In the case at hand, such interest is due on the price paid by EDF to wind power generators under Ministerial Order of 17 November 2008 and that must be regarded as state aid, from the date it was paid until 27 March 2014.

The French government has six months to request the reimbursement from wind power generators, i.e. before 15 October 2016. Failing this, the government will be charged €10,000 per day of delay.

The exact conditions under which the government must implement this obligation are not yet determined. For each wind fam, the French government could issue revenue orders (titres de recettes) indicating the amount to be reimbursed. EDF could also be involved in the process.

This decision is of paramount importance for wind farms currently being operated on the basis of Ministerial Order of 17 November 2008. Although its consequences could be limited for projects commissioned in 2013 and 2014, they should nonetheless be assessed as soon as possible, in particular for older projects.

By Véronique Fröding and Pierre-Adrien Lienhardt

___

^{This Client Alert is a free electronic publication, edited by the law firm Gide Loyrette Nouel (Gide), intended to provide non-exhaustive, general legal information. This client alert is not intended to be and should not be construed as providing legal advice. The reader/addressee is solely liable for any use of the information contained herein and Gide shall not be held responsible for any damages, direct, indirect or otherwise, arising from the use of the information by the reader/addressee.}