By Michel Rose

PARIS (Reuters) - France's highest administrative court on Wednesday annulled the decree setting wind power feed-in tariffs, marking the end of a complex legal procedure that has stifled investment in the French onshore wind sector.

The French government has already prepared a new decree, which was cleared by the European Commission in March and will replace the one that has now been annulled.

Pressure group Vent de Colere (Wind of Anger) had seized on the previous government's failure to notify the EU that the original decree subsidising onshore wind power production was state aid. Europe's highest court, which the French court asked for advice, judged last December that the feed-in tariffs were indeed state aid and should have been flagged to the EU as such.

Legal uncertainty over the tariffs, which force utility EDF to buy wind-generated power at above-market costs, had paralysed investment in the French wind sector since 2011.

Wind power capacity reached a total of 8,140 MW at the end of 2013, with growth in the sector slowing for the fourth year in a row, with just 630 MW of new capacity added last year, from a high of 1,247 MW in 2009.

In neighbouring Germany by contrast, new wind power installations accelerated last year, rising 10 percent to 33,730 MW, more than four times French capacity.

French renewable energy lobby SER welcomed the decision, saying the wind sector was now expecting the government to promulgate the new decree.

"After six years of procedure, this new economic framework, which is highly anticipated by all players in the wind sector, will finally give them a secure legal footing necessary to carry on their projects," Jean-Louis Bal, the head of the SER, said.

The French court's decision is retroactive, but existing wind farm owners will not have to reimburse the aid received under the now illegal decree, SER wind specialist Marion Lettry told Reuters.

Un-connected wind parks will have to wait a few weeks before being added to the grid, until the new decree is promulgated around end-June, after a review by French energy regulator CRE.

"We can now expect a pick up in new French onshore wind installations from the third quarter of this year," Lettry said, adding that new regulation to cut red-tape in the sector should also provide a boost to the sector from 2015.

The court, called the Conseil d'Etat, also ruled that the French government should pay 3,000 euros ($4,100) in damages to Vent de Colere.

($1 = 0.7345 Euros)


(Reporting by Michel Rose; Editing by Erica Billingham and Susan Thomas)