The feed-in tariffs' level and indexation of the bio-methane injected into the distribution and transmission networks are fixed by the French ministerial decree of 23 November 2011.

How are such feed-in tariffs determined and indexed?

Similarly to the feed-in tariffs applied in France for the purchase of the electricity produced from renewable energy sources and injected into the power grid, these tariffs are calculated taking into account the nature of the facility (whether it is considered to be dangerous or not) and from:

• a base rate, T, which depends on the maximum producing capacity (CMP);
• premiums, PI, which depend on the proportions of certain inputs (wood, sawdust,...) in total supply.

The rate and premiums are doubly indexed:

• Firstly, every year, depending on the date of signature of the contract (multiplication by the K factor);
• Secondly, each year, according to national price indexes since the signing of the contract (by updating the coefficient L).

More precisely, the K and L multiplying factors depend on the INSEE indexes, that represent the labor costs and sector-specific production prices:

• K is fully indexed, each year: 50% of such indexation depends on labor costs and 50% on production prices;
• L is partially indexed (for a 70%, only): 30% is indexed on labor costs and 40% on production prices.

Even if the bio-methane tariff looks very attractive in France, the formula determining its value in function of the equipments chosen and the nature of its supplies appears to be quite complex. Thus, any project developer definitely has to work on various simulations and forecasts related to the plant's future revenues, taking into account several market scenarios, in order to ensure that its project will be profitable.

Our services:

Zelya Energy assist companies for:

• checking the eligibility of a bio-methane project to certain price levels;
• validating the opportunity of injecting bio-methane into the French natural gas network compared to alternative local strategies;
• calculating and siulate future feed-in tariffs;
• detailing the calculation of the purchase prices and redacting a note to be included in the file for the license's request to the prefect.