No, but to circle back, I agree with what Bri said. I think 10 or 15 years ago, these technologies weren't yet mature, so an economic framework had to be put in place to evolve. Today, I've already spoken on this: terrestrial solar and wind power can survive without necessarily needing us to secure their revenue. And in the French model, actually, as I've often stated, it's ultimately the state that takes on the market risk. And there's a flaw in that: it doesn't incentivize what a producer should be doing, which is trying to lower costs as much as possible. Costs are actually higher in our country because I think that precisely because we're in a subsidized environment, we end up with more expensive land, higher grid connection costs, delays, and so on. So we can revisit all of that.
There is a model that is very different. There, there are zero subsidies, zero aid anywhere. The completely opposite model is the American one, which has tax-based investment support systems, but then once you're on the market, you build your solar plants, you build your batteries. And what I've observed is that there is a virtue to that model: since you don't know what the market price will be when you generate, you find ways to choose the most cost-effective projects, and you are highly incentivized to install batteries quickly to manage fluctuations. There is a virtue in moving toward more hybrid systems, which often corresponds, and that's the point, to what customers are looking for.
Because ultimately, regarding the concept of PPAs, why are they such a success? Our industrial players, even in Europe, are currently looking for price visibility on electricity, and a PPA can give them that visibility over 10 or 15 years. Ultimately, it's a response to what customers want. Beyond that, they don't just want visibility, they want it to be affordable, which is a constant in energy. So it's up to us to do it, and the way to do that is indeed to move toward hybrid PPAs and a combination of what we call clean firm power. We are going to install solar, sometimes a combination of solar and wind which works well, plus possibly supplemented by flexible assets from gas plants, a little bit, to manage the farm. So I think there is a virtue in moving toward that model. It meets a customer demand and it also allows us, I would say, to manage this public money as well as possible.
So I was, I said it to the Jean-Bernard Lévy mission: I think we should move much faster toward that model. You shouldn't be afraid of the unknown from time to time; you have to take the leap. I am totally, let's be clear, I think we must continue to invest in renewables in France, right? That is not my goal, quite the opposite. I even think the lesson I draw from the crisis we've experienced over the last few months is that, fundamentally, we need an abundance of energy. We need an abundance of electricity. The price of electricity in France has remained relatively low, weak, or at least stable. Despite the crisis that other countries may have experienced, it's precisely because we produce a lot of electricity thanks to our nuclear plants that work well, but also thanks to renewable energies, and we shouldn't start saying that because demand isn't keeping up, we're going to slow down. I don't think so; if we want to ensure the affordability of this electricity in France, which is a blessing for our country, we must continue to invest.
So I'm not trying to do less. I think we just need to be honest about where we are, and I think we could have calls for tenders that would be more favorable to innovations like solar-battery hybridization to encourage batteries. The cost of batteries has fallen a lot in the last two years, right? So we see that we have a field for experimentation there. There is one area where we will have trouble doing without CFDs, and that is offshore wind, because we are in a sector where costs are still high and hard to control. But there you go. So my point of view is that yes, we must move toward PPAs, we must push, we must find the means. For example, I find that today, if you want to exit your historical CFD in France that you signed, or rather committed to, in order to switch to a PPA, it is totally prohibitive. The penalties we face are a deterrent. So we are not being encouraged to help the state save money.
I think that is one of the recommendations that was included in the Jean-Bernard Lévy report. Honestly, I think it's a simple approach: if we want to take an asset and put it into the market, open to moving toward contracts, that will save the State money, and I don't see why I should pay penalties to exit that model. There you go, it's a simple idea, and I think we need to provide incentives. Though there won't be a revolution, I'm aware of that, we can study mechanisms that exist in some European countries, like in Portugal. There's a quite clever "cap and floor" system, meaning CFDs where you're guaranteed a notional income on a given capacity. If you produce more, well, you're in the market. In short, we can find methods that strongly incentivize moving toward a market, once again, for technologies that have actually become competitive.
And that's what's needed because what worries me in the current French debate is that, ultimately, we want to question the fact that these renewable sectors are competitive. They are competitive, they are useful. So we must continue the investment. We just need to adapt our methods. It's not like 15 years ago when we really had to launch them; they are established now. So all of us stakeholders need to have confidence in ourselves. We have no problem moving toward development, deploying, and we will find customers if we meet in the market. So I think we need to respond because otherwise, in the end, we have a very biased debate which is dangerous, it's all or nothing. And that's exactly what we must avoid. So it's up to us, as players in the renewable sector, to take our responsibilities.
To share our recent history in energy with you, much more recent than EDF's. In 2020, we said to ourselves, we're going to aim for 35 GW of gross capacity. We reached it. We had set ourselves targets by country. There is one country where we didn't reach our target at all, and I regret it: it's France. And conversely, we were much more successful than we thought in the United States or in other countries like Brazil and India. And in France, why? Well, it's not for a lack of effort, because I have large teams, we even unfortunately had to downsize them a bit. It's just that the projects aren't very large, land is expensive, procedures are long, and so, where we told ourselves "we'll do 5 GW," we did two, and I still have five years to go. And I have many frustrated teams because they have a significant pipeline and they show us every time how long it takes to clear the appeals. So there is an extremely long process.
Now, I know that at one point a minister said we were going to have a simplification law. Unfortunately, with the simplification law, we invented more committees that didn't really simplify things, or at least, I haven't seen the effects on the ground. So it is frustrating because it's not a financing problem at all. We are ready to finance, on the contrary. I would even say, looking at a chart to illustrate the price issue, why we have a problem in France, I was looking at onshore wind. This year, we came out at a low rate of €77 per MWh. Germany is at €55 per MWh, Italy 72, Spain 43, Portugal 32; that's for onshore wind. We didn't have a call for tenders this year, but last year we were at 79, it will probably go down. 47-48 in Germany, 56 in Italy, 32 in Spain, 11 in Portugal. So we have an issue, and why? Because all of this reflects a succession of costs.
There is the cost of grid connections in France. The connection cost represents nearly 25% of the module cost in a solar installation. In Germany, it's 10%. Well, it's a choice of equalization regarding how we distribute connection costs, but we have to deal with it. Then you have rules. When doing repowering in France, we can do up to 2.8 MW. In Germany, 5.1 MW. Why? Because there are military, aeronautical, and landscape constraints on repowering, even though repowering is obviously an extremely easy way to increase capacity. The masts are already there, we install them, finally. And, well, even then, I actually had to fight myself: there was a change to the circular to go from 30 to 33%. Because, for 3%, I obtained that one day while speaking to the Prime Minister. You see, it just goes to show I think of you! What I discovered: for 3% in a circular, we were excluding turbines and losing output.
No, but there are still plenty of little things here and there, as Jean-Bernard said, that if we made an inventory of them and managed to get willing people around a table, wouldn't cost any money. It's not about costs, it's about freeing up energy, to use the expression, and moving forward. So those are, I would say, a sum of things that make a difference, and it helps a lot. And once again, I refer back to my own concept. So, since we have a fairly comfortable CFD system, these costs ultimately translate into high strike prices. So for the State, which is currently looking to act, it's simple: if we eased these constraints, the strike prices would automatically drop, and we could generate as many megawatts with less public money. That is what I believe. So that's a good way to go.
Now, as for what follows, I find that, let's implement the measures suggested by the Jean-Bernard Lévy and Nitou report. Let's implement them and listen to the stakeholders who, frankly, have plenty of little things that would, once again, allow us to lower costs and continue to develop within a budget while consuming less money.
I'm going to have a slightly different take on this subject based on the experience we had when we first entered this sector. We started opening all the doors, and notably, for example, regarding offshore wind, we said, let's look at floating wind, it floats. We know how to make platforms float, so we should be able to manage this. And then, five years later, we realize that the word "transition" actually means something, and that we have clients in front of us, and that we must produce decarbonized energy that is affordable for our clients. As a result, to be honest, we've tended to close some doors. For example, we are no longer interested in floating wind today. I say this because, first of all, there is plenty of fixed-bottom offshore wind to do. It's a bit like the history of oil; we started by going after oil in shallow water before going down to 3,000 meters deep. So we shouldn't want to do everything at the same time.
And the climate emergency pushed us to open all the doors. Simply put, we also need to reduce emissions more effectively. I spent 10 days in China this summer and was quite surprised to see that they were all working on a very concrete topic: hybridizing solar, batteries, and the grid. They were adding the grid dimension. How to optimize it? They are deploying it massively, doing so on a huge scale out there in Inner Mongolia. When I say massively, it's beyond what you can imagine; it's absolutely square kilometers, hundreds of square kilometers of solar, wind, and batteries. And I was struck because we are working on solar-battery hybridization, but we hadn't added the grid. Yet, grids are becoming essential if we want to optimize all our investments to provide, let's say, affordable energy to customers. So, we were wrong, and today we decided to invest, especially in digital and electricity.
There are plenty of things to do, but rather: how can we better use these mature technologies and make them even more efficient, instead of chasing future technologies? Because, once again, this isn't a criticism, it's just my observation, but even making fixed-bottom wind power competitive is a challenge. Well, EDF is much better at it than we are, but we're having a bit of trouble right now making it competitive and being market-ready. In France, it's a bit special because it turns out the grid connection to offshore is handled by RTE. In most other countries, we are the ones who have to handle the offshore connection. I mean, our experience hasn't been easy with offshore connections in the US, that's why we returned the license, or elsewhere. But with floating offshore wind, we're talking about a 3x scale. Basically, we're talking €100 versus €300, just to give you an idea. Someone might say €200, but that doesn't really matter. I will be interested to see what prices people submit in future tenders.
So, it really is a question of where we put our public money to foster the most efficient new systems, knowing that the end goal is to lower emissions, not just to create technological innovations. It's about how to be as effective as possible in reducing emissions. So, we have decided that we will allocate capital, and I continue to invest 3 to 4 billion a year in all these decarbonized energies, but we will prioritize the systems where we see that, broadly speaking, the cost per ton of CO2 abated seems, let's say, most efficient for the community. That doesn't mean we don't have advanced research in certain areas, but we cannot pursue every single path. Anyway, there you have it.
So, I am, therefore I think that, for example, I think we should do, to return to the CRE tenders, innovative CRE tenders for the solar plus battery model, push for hybridization now, because we have to, we are close now, we can incentivize all stakeholders, and we will actually have utility regarding the whole debate: wind power, renewables, it's intermittent, it messes up the grid. No, it doesn't mess up the grid that much if we pair them with batteries. We manage to be a bit smarter than that. So we must convince people that all this is useful. Basically, we need to move toward a megawatt that is more useful for the consumer and for the grid.
Once again, I insist on the notion of the grid because what we observe everywhere in the world is that there is a limit, a kind of ceiling to wanting to develop renewables. When you reach 40 to 45%, at a certain point, the legacy grids can no longer absorb it. And then we run into absolutely terrible curtailment phenomena that destroy the value of our investments, by the way. So I think there is a coupling dimension. We cannot ignore that they are intermittent. So I defend them because they are useful, they are decarbonized. But we must take, in fact, for me the next step is how we make them, I would say, not just intermittent but sustainable 24/7.
There are some very fine projects being carried out in Abu Dhabi right now, which are very interesting to follow, coupling a lot of solar and wind with batteries. But I think that this is a path that seems very promising to me because it holds the potential to actually make renewable energy that is available all the time. And that is what we must seek to do, in my view, because we have the maturity for it. There you go, once again, but I admire people who are forward-thinking. So,
I think we answered that question about ten years ago. I used to produce solar panels in Europe. Then one day, it was explained to me in Brussels and Paris, for that matter, that no, ultimately what was good for the consumer was the cheapest solar panels. They were Chinese, and so there would be no more taxes on Chinese panels. Well, I had to close several solar panel factories in Europe. So, I'm happy for us to ask the question again, and I think that in this matter, we are confusing sovereignty with autarky, and somewhere the question for us is not to depend on, not to have hyper-dependency on a single supply chain for our renewable energies.
We may also want to promote in certain sectors, how should I say, European manufacturers that build using European installation capacities. Our tender for the Centre-Manche offshore wind farm that we won, we won it in part because we wrote that we would use turbines manufactured in Europe. Well, it wasn't extraordinary. The factory isn't far away. So, I mean by telling ourselves, after having studied the Chinese wind turbine market, that it was perhaps not a sure thing to bring them to Europe and that we could see the political obstacle in doing so. Which, by the way, is proving to be the case; apart from the English, they have more trouble setting up in Germany and probably here with us. Well, but these are choices made at the level, I would say.
So on that, I think that with India, for example, we have developed today... India has gone all in on the production of solar panels and they are extremely efficient. They are even, by the way, they are so all in that they are almost in overcapacity. So they are starting to export them, and our strategy consists of diversifying. Above all, not depending solely on Chinese suppliers who, coincidentally, from time to time start raising prices and creating problems for us. We must diversify; to believe that we will reinstall all this industry in Europe, I think that here we must, we must... it's not true, we are telling ourselves stories.
So after that, there are critical elements, we see that we are trying to make efforts on batteries, and I am not in that other project, I am in another project. It's not a sure thing. It's not a sure thing because there, too, we are facing Chinese competition, in this case, which is very good technologically. They are very good, so how do we make up for the time we've lost? It's not simple, especially since the market, for batteries in this case, is here tomorrow morning because electric cars need to be on the road right away. So there is a synchronization problem there.
I think what is important for us in Europe is diversification and, above all, not being dependent on a single source. So we need to diversify our supply sources and then identify certain areas, not nuclear, I'm not the expert, Béatrice, to build on that, areas where we have real expertise that we must preserve and maintain. It's not worth thinking that we're going to be autonomous and self-sufficient in every sector. This idea that Europe is going to become self-sufficient is a bad one; that is not what sovereignty is. Sovereignty consists of diversifying and being able to maintain our supply, regardless of what happens during various crises around the world. That's how I see the subject.
Starting a small project, you know, in the Mediterranean, 30 MW, and I can tell you the cost per megawatt is not cheap, you know, but still. But actually, we are happy; in fact, I had put it in the research and development category, not in production. So it's running, it's producing, we're observing it, we're watching it, we're watching the floating wind turbines.
But I agree, it's a real issue, a choice between price and constraints. Anyway, once again, I think we need to go gradually, so that we have a minimum amount of European content. Yes, let's give ourselves the choice of knowing what the arguments are. We are getting into subjects that are far too detailed, with devilishly complex specifications. In the end, we can't do everything. So, I think I understand the approach. I am rather in favor of a "Buy European" policy. After all, it is public money that is being spent. So, for public money to be used to help finance the creation of jobs in Europe, I can only agree with that.
Simply put, it doesn't happen overnight, and making regulations that are too complicated, well, in the end, it's a choice, it's going to cost a bit more. So we all have to accept that. In the United States, since Trump put tariffs on all Chinese solar panels and batteries, I can tell you that yes, there are supply chains. But as for the prices, the prices of renewable energy in the U.S., and since he doesn't like them, he's consistent, he drove the prices up. Well, it remains competitive, we're managing despite everything. We manage to make them competitive, we're actually managing to grow remarkably in the United States in line with our plans. But even so, everything, everything went up, you know.
So then, it's a choice between the consumer and, at a time when Europe says we have a competitiveness problem with our energy costs and renewable energies must, which they can do, by the way, the CRE report says so, contribute to lowering electricity costs. Be careful not to take, as you say, I like contradictory injunctions. So there, it's not easy, but I remain convinced that in the end, I prefer prices and quite transparent tenders. To be honest, I don't really like non-economic criteria where you wonder what's going on, which results in the CRE, you submit a file, then you get the answer three months later. I don't know what they do for three months. For me, there are countries where when I submit a file, I mean, I work in Brazil, I submit a file in Brazil and, well, I have a screen that gives me the answer 10 minutes later. So, I prefer the latter. There you go. So, there's perhaps also the fact that transparency is good too.
I defended this idea because I don't believe in the simplification of rules in our country. I don't believe in it. Sometimes when we look at a file, we add one to simplify, and then we add two more. So, I think we lack the resources today to speed up the processing of these files. That's it. That's what I think.
I think that the more civil servants there are, the more complicated the procedures will be.
That is the point of view of an interlocutor here in Paris. But if you are in Kuala Lumpur or Nairobi, you never ask yourself that question. Today, the truth is that yes, we Westerners use too much energy per capita and we must make efforts to lower our energy consumption. There are plenty of countries on the planet, there are five billion people who lack energy, and for them, it's just vital for their development. So, planetary boundaries, we don't see them the same way depending on whether you live in Paris or in Kalump. That's what I think. But that's a point, I agree, but I think everything we're trying to do with the development of these technologies should help avoid using natural resources and move toward other ways of developing. But to believe that we will manage to control energy demand on a global scale, we are very far from that.
