Trésor-Info - Publications de la direction générale du Trésor - Green-transition

The Economic Issues Surrounding Support for Renewable Electricity

2026-02-16T00:00:00+01:00

Renewable electricity, when used to supplement nuclear energy, contributes to achieving the goals of the energy transition. This requires the widespread electrification of uses in transport, construction and industry. Renewables also enable us to reduce our dependence on fossil fuels, which are mostly imported, and thus strengthen our energy sovereignty.

The competitiveness of renewable energy development projects depends on the sector (solar, onshore wind, offshore wind, etc.) and the ratio between their cost and the market price of electricity. In 2025, market prices in France were lower than in most neighbouring countries. While the cost of renewable electricity has fallen sharply in recent years, it has not yet reached the average level of current market prices in France. Hence, the development of these sectors still requires government support.

Support for renewable energy aims to improve the return on investment. Its cost increases when electricity market prices fall, and vice versa. The increase in the volume of renewable electricity receiving support will automatically lead to greater exposure of public finances to market price fluctuations. As a result, support for renewables has had to change, in particular by transferring more of the risks borne by government to producers.

Until 2035, the annual cost of supporting renewable electricity will continue to be dominated by the cost of contracts signed before the end of 2024 (see Chart). As a result of lower generation costs for renewable technologies, the unit support cost for new facilities will be lower than for existing ones. So, for solar and wind power, the average full generation cost for supported facilities should be approximately €80₂₀₂₄/MWh in 2035, compared with €120₂₀₂₄/MWh today, resulting in an automatic reduction in the cost of government support per MWh generated.

The Expected Benefits of the European Recovery Plans Introduced in the Wake of the COVID-19 Pandemic

2023-03-09T00:00:00+01:00

Following the COVID-19 pandemic and the emergency measures implemented to mitigate the loss of income for households and safeguard businesses, European Union (EU) Member States agreed on the NextGenerationEU (NGEU) package which is an unprecedented joint response to support the recovery, making over €800bn available to Member States.

The European recovery plan is financed by common debt for the first time in EU history and by national resources (see chart). The Recovery and Resilience Facility (RRF), NGEU’s centerpiece, funds the Recovery and Resilience Plans (RRPs) comprising reforms and investments determined by the Member States.

European recovery plans are expected to foster the convergence in living standards within the EU since a significant share of RRF funds are allocated to countries with low levels of GDP per capita.

Recovery plan reforms and investment will underpin innovation and productive potential, thereby enhancing potential growth, and bring down structural unemployment, especially in those countries that had larger structural weaknesses prior to the pandemic. The European recovery plan will help take up the challenge of the green and digital transitions to which national recovery plans have to devote a minimum amount of green and digital investments.

The plans of some countries with current account deficits focus on supply-side measures. However, narrowing external imbalances within the EU and the euro area would have been more effective with better coordinated implementation of the European recovery plan: countries with large current account surpluses could have concentrated their plans more on demand-side measures. In this respect, bolstering the macroeconomic imbalances procedure (MIP) could contribute to improved coordination of economic policies in the EU.