EU investigates state aid to national power firms

The European Commission has launched an inquiry into whether subsidies offered by governments to power companies for providing extra electricity capacity violates competition rules. It will gather information on the […]

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By Priyanka Shrestha

The European Commission has launched an inquiry into whether subsidies offered by governments to power companies for providing extra electricity capacity violates competition rules.

It will gather information on the Capacity Mechanism, which has been introduced in a number of member states, including the UK.

The scheme provides incentives for power plants to continue operating, with the aim of making sure there is enough electricity supply during times of peak demand and avoid blackouts.

The inquiry will initially request information from some member states – Belgium, Croatia, Denmark, France, Germany, Ireland, Italy, Poland, Portugal, Spain and Sweden.

Commissioner Margrethe Vestager, in charge of competition policy said: “My role is to safeguard that public measures to underpin investment in electricity supplies do not unduly favour particular producers or technologies or create obstacles to trade across national borders.

“For example, in some cases it might be more efficient to invest in improving electricity grid connections between EU countries than to build new power stations.”