The European Commission has approved a major reform of France’s electricity capacity mechanism, allowing the country to reshape how it secures sufficient power supply during peak winter periods.
The new system will run for ten years from November 2026, with an estimated budget of €2 billion per year, totalling €20 billion over the decade, the Commission informed in a statement on Monday.
The scheme ensures there is enough electricity available by compensating producers, operators who store electricity, and companies or individuals who can reduce their consumption on demand during periods of scarcity.
The mechanism covers delivery periods from November to March, when electricity use typically peaks, and will be open to all projects that can help meet those needs, including those offering storage or demand-side response — meaning they reduce usage when supply is low.
Successful bids will be selected through two competitive, open auctions: one four years before each supply period and another a year before.
Projects in France and Belgium can participate from the first auctions, with plans to allow neighbouring EU countries to join as soon as possible.
Competition and reliability safeguards
Participants must meet a reliability standard — the maximum level of unmet demand considered acceptable — based on France's national energy assessment and approved by the Agency for the Cooperation of Energy Regulators (ACER), the Commission stated.
The system aims to encourage development of flexibility services like energy storage and adjustable consumption, to support France’s national targets set under EU law.
The European Commission evaluated the measure under EU State aid rules, stating it met requirements for transparency, competitive selection, and limited impact on competition and cross-border trade.
Aid will be awarded only to those projects that offer the most cost-effective contribution per megawatt of available capacity during scarcity events.
The Commission said its approval aligns with guidelines designed to help member states strengthen energy supply while supporting climate and environmental targets.
Capacity mechanisms are tools used to avoid supply shortages by ensuring enough electricity is available at all times.
