Draft Guidelines allow state aid in the renewable energy sector

The draft Guidelines will replace the existing State Aid Guidelines on Environmental Protection, which entered into force in 2008 and cover the period until the end of 2014. The Commission proposes to extend the scope of the existing guidelines beyond the environmental field and into the energy area. The Commission also proposes to exempt certain categories of aid from prior scrutiny under the state aid rules by including them in the General Block Exemption Regulation.

The Commission has identified a number of environmental and energy measures for which state aid under certain conditions may be compatible with European law. The measures would not apply to nuclear power. These exemptions include (see Article 1.2. of the draft Guidelines):

• investment and operating aid for energy from renewable sources
• investment aid for environmental studies
• investment and operating aid for energy-efficiency
• investment and operating aid for cogeneration installations
• investment aid for resource efficiency and waste management
• investment aid the remediation of contaminated sites
• operating aid in the form of tradable permits
• investment aid for CO2 capture, transport and storage (CCS)
• investment aid for energy infrastructure

According to the Commission, the measures set out in the draft Guidelines will contribute to reaching the EU’s ambitious climate change and energy sustainability targets. The Commission aims to enhance the bankability of renewable energy projects by providing more clarity on the state aid framework.

The goals set out in the Dutch Energieakkoord can also benefit from the proposed measures if the Dutch government decides to grant aid to, for instance, wind energy projects. According to the draft Guidelines, aid to energy from renewable sources can be granted as investment or operating aid.

For the first time, the draft Guidelines include rules for assessing infrastructure support, in particular to enable investments in cross-border infrastructure. The draft Guidelines also provide for aid to energy-intensive industry in order to meet their increasing electricity costs, for aid for energy-efficiency measures, including cogeneration, and for carbon capture and storage projects. The draft Guidelines also include rules on state aid to secure generation adequacy which may be of interest to electricity generators and other players active in energy production.