New EU rules ‘restrict state aid for renewable energy’

The proposed guidelines for renewable energy subsidies “risk undermining the EU’s commitment” to clean energy, Europe’s local and regional authorities have warned. They are calling for new rules on state […]

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By Priyanka Shrestha

The proposed guidelines for renewable energy subsidies “risk undermining the EU’s commitment” to clean energy, Europe’s local and regional authorities have warned.

They are calling for new rules on state aid to promote green energy and continue to allow governments to provide subsidies for renewables. The EU’s Assembly of Regional and Local Representatives believe the rules “restrict the number of green energy companies able to receive state aid”.

The Committee was responding to the European Commission’s draft energy state aid – aimed at promoting sustainable growth and strengthening the internal market – which is expected to be finalised this week.

It questions the Commission’s proposal to make the Feed-in Tariff for renewables – where green producers receive a fixed price per kWh – the exception and focus instead on green certificates which can be traded. The Committee argues this will “compromise confidence among investors and undermine Europe’s decarbonisation plans”.

It suggests the ceiling for renewable energy companies to be eligible for subsidies should be raised from the proposed 1MW to 5MW and 15MW for wind power while subsidies for fossil fuels should be axed and governments should also be blocked from subsidising nuclear energy.

Gusty Graas, member of the Municipal Council of Bettembourg and Luxembourg’s National Parliament said: “State aid for renewables must contribute to a safer and more secure energy supply, a cleaner environment and a stronger job market. At the same time, it is clear that innovative technologies can only prosper under fair and competitive market conditions. We need to take a pragmatic approach that involves the local level and focuses on the sustainable development of both the economy and ecology.”