The start of green power generation in Northern France (La Française de l'Energie)

LFDE announced the first production of green power with a 1.5MW asset in Lourches, in Northern France. LFDE generates electricity with the gas that is accumulating in former coal mining galleries (a network of more than 100,000km in Northern France). The company captures this gas which otherwise would be released into the atmosphere.

LFDE has installed green power generators at three other sites in the NPdC region, which should also start production over the next few days.

The green power capacity is set to reach 9MW by the end of June. This is tantamount to the energy needs of a city of 40,000 or the production of 18 wind turbines and should contribute around €4m of guaranteed revenues.

LFDE has managed to start green power generation ahead of schedule. This highlights the company’s robust project management capabilities and its effectiveness in delivering on the business plan.

The green power is sold under a 15-year Feed in Tariff (FiT) to EDF Obligation d’Achat. The FiTs guaranteed by the French State will allow the group to be protected from market volatility, providing maximum long-term visibility to the company and its shareholders. Moreover, the Northern France green power revenues are protected for loss of performance from electric motors.
Hence, this activity is highly de-risked and provides the group with a predictable, steady and growing cash flow generation which should cover the whole cost base of the company from 2018 onwards and contribute, at a later stage, to the financing of other investments of LFDE.

The green power generation business benefits from a modular and quickly replicable model, and LFDE is identifying sites for further deployment. Therefore it is possible that the group could outdo our long-term estimates for power generation in Northern France.

The start of green power generation in Northern France confirms the opportunity presented by this leading clean energy player.