Engie and Neoen collaborate on 1GW solar and storage project

Matthew Farmer 12 January 2021 (Last Updated January 14th, 2021 11:39)

French energy companies Engie and Neoen have announced a collaboration to construct a 1GW solar and storage project in south-west France.

Engie and Neoen collaborate on 1GW solar and storage project
The collaboration between Engie and Neoen would work outside of the French government’s tender system. Credit: Engie.

French energy companies Engie and Neoen have announced a collaboration to construct a 1GW solar and storage project in south-west France.

The Horizeo project would cover 1000 hectares near the town of Saucats, in Nouvelle-Aquitaine. On this site, the companies would create the solar park, battery storage, and an area “combining agriculture and photovoltaic electricity generation”. The project would also build and power a data centre and hydrogen electrolyser to fuel “opportunities for individual and collective mobility”.

The project will not rely on a fixed energy tariff, instead using over-the counter sales contracts. Because of this, the project will not have access to public support mechanisms.

Development of the planned site would require the felling of part of a pine forest. As such, the development would need environmental authorisation. The companies have pledged to replant more forest than the project would cut down.

In order to give local residents input on the plans, the companies have announced a public debate, overseen by the French National Commission for Public Debate. An Engie press release says the park would supply power for more than 600,000 people.

Engie renewables CEO Gwenaëlle Avice-Huet said: “The Horizeo project is unique in its capacity to produce renewable energy and use it with technologies of the future on a single site. It is also ambitious for its economic model, valued through sales contracts from companies, outside the tender procedures of the state and associated grants. This is a real break with the current economic model of renewable energy in France.”

The companies have not given an estimate of their investment in the project, or how they plan to jointly manage the park.

Neoen deputy CEO Paul-François Croisille said: “Horizeo is a large-scale project that will demonstrate that accelerating France’s energy transition is possible by offering competitive renewable energy directly to companies.

“The project is designed as a low-carbon energy platform, combining solar with technological innovations, such as electricity storage. In keeping with the unprecedented scale of the project, the public consultation will allow us to involve locals and the general public as widely as possible.”

Operating renewable assets outside of government frameworks would mean more adaptability and volatility in income from the farm.

The French Government held its most recent renewables auction in October 2020. It approved 100 solar and wind projects with a combined capacity of 600MW. Of these, 45 were ground-mounted solar projects, with an average tariff of $68.10/MWh. This meant a 7.4% fall on tariffs from the previous auction.

Engie and Neoen are giants within French generation. In its 2020 annual report, Engie noted its position as the largest solar producer in France, with a 7% annual EBITDA growth. At the time, it had 2.6GW of photovoltaic solar generation installed worldwide across the group, with 1.1GW of this in Europe. A significant amount of this came from bids on French government projects, as the company won 165MW of solar bids in the year before April 2020.

In its half-yearly report, Neoen reported EBITDA growth of 58% in the first half of 2020, compared to the same time in 2019. The majority of this change in earnings came from new solar projects in the Americas. In France, the company launched three solar plants with a total capacity of 15MW at peak. In the October renewables auction, the company won contracts for another 14MW of solar and wind.