Law No. 2023-175 on the acceleration of renewable energies deployment dated 10 March 2023 introduces new contracts available to French public purchasers.
Power Purchase Agreements (“PPAs”) are long-term contracts allowing direct sales of electricity produced from renewable energy sources from the producer to the consumer. PPA contracts represent an efficient way to support the production of green energy without further impinging on the State’s budget.
One of the main obstacles to the development of PPAs for public purchasers was article L.2112-5 of the French Public Procurement Code. It provides that all contracts need to be established for a duration that considers the nature of the services and the necessity for a periodic competitive tender procedure. The obligation to consider a renewed bidding of the contract probably held public purchasers back from using long-term PPAs.
Article 86 of the law introduces the possibility for French public purchasers to conclude PPAs.
Such contracts will be governed by the provisions of the French Public Procurement Code, and as such, shall be signed after having been awarded following a tender procedure.
The concrete implementation of such possibility will however raise different questions from a public procurement perspective.
The impossibility for public purchasers to select a locally based electricity provider should be favourable to bigger producers who will be able to offer energy on a more competitive scale. Moreover, the duration of these long-term contracts is not entirely specified, and it seems difficult to conclude PPAs for a specified duration of 8 or 12 years, without having any guarantee from the administrative judge or the French Authorities regarding the compliance of such duration with the French Procurement regulations.
For the Law, please see here.
“Responsible Purchase” Guide issued on 14 April 2023 by the State’s Purchases Department
Implementing the use of public procurement contracts as a ladder towards sustainable development, the French State’s Purchases Department, related to the Ministry of the Budget, published the 3rd edition of its guide on responsible public purchase for public purchasers.
This guide comes after the amendments that were made in May 2022 to article R.2152-7 of the French Public Procurement Code, which will require the award of public procurement contracts on criterion considering the environmental aspects of the offer from 21 August 2026. This reform lacked in precisions regarding what should be understood behind the notion of “environmental aspects” (for a more in-depth article, see here).
The document prompts public purchasers to take into consideration the diversity of environmental, sustainable or social criterion at every stage of the tender process, from their needs’ definition to the selection of their co-contractor.
Pursuant to the Guide, environmental and social requirements shall be explicitly laid down in the procurement contract documentation. These requirements need to be realistic, applicable and measurable during the contract’s performance.
It gives examples of requirements that can be used while preparing for the contract’s negotiation and performance (for example: requesting for environmental labels for certain sensitive products; equal pay for women and men within the company; etc…), thus helping public purchasers see what notions like “environmental” or “social aspects” could entail.
It also warns public purchasers about “greenwashing” behaviors, when operators present an environment friendly policy while in reality not enforcing certain standards.
Although these precisions can be useful, the Guide is still very broad and generic, relying on technical notions that public purchasers are not always well equipped to implement. Publishing specific guides for the different sectors concerned by public procurement contracts could be a concrete way to help public purchasers see how they could implement these broad principles.
The current “Green Industry” draft bill which intends on accelerating the public procurement reform towards climatic transition should be a mean for the government to define more detailed obligations that public purchasers will need to follow when awarding their contracts.
Still in development, the draft aspires to create environmental labels that companies can use to rationalize public purchasers’ selection processes, in particular by implementing one “Triple E” environmental standard. It also intends on allowing for the exclusion of companies from public tenders if they do not comply with environmental transparency obligations.
Dec 06 2023