Reform of French capacity mechanism for security of electricity supply greenlighted
The Commission has approved the reform of the French electricity capacity mechanism aimed at safeguarding security of electricity supply during peak demand periods. The reformed market-wide mechanism will run for 10 years from November 2026 and ensure that sufficient capacity is available to produce, store, or flexibly consume electricity during winter delivery periods. The mechanism will allocate support through competitive, transparent and non-discriminatory auctions held four years and one year ahead of delivery.
With an estimated budget of around EUR 2 billion per year, the scheme will initially allow participation of operators from France and Belgium, with the objective of expanding to other neighbouring Member States, while supporting the development of flexibility services in line with EU energy legislation.
The Commission approved the reformed mechanism under the Guidelines on State aid for climate, environmental protection and energy 2022 (‘CEEAG’) finding it necessary, appropriate and proportionate to meet France’s reliability standard, as established through its national resource adequacy assessment and approved by ACER. Moreover, the Commission considered that it aligns with the best practices for capacity mechanisms laid down in the Clean Industrial State Aid Framework (‘CISAF’).
For more information, see the Commission’s PR.