The State Aid Guidelines on Energy and the Environment were initially release to adapt the rules on public support for the energy sector from a competition law perspective to reflect notably the framework of the 2020 EU Climate and Energy objectives. The purpose of this review is to put the State Aid framework in line with the 2030 Clean Energy for All European package, and reflect the changing market dynamics in the energy sector.
In general, the guiding principles of the EEAG should be:
➢ Correct market imbalances leading to closed market and a stop to the energy market openness. That gives a dominant position to fossil fuels in the European energy market: phase out of fossil fuel subsidies, allowing renewable technologies to reach market maturity…
➢ Allow competition in the European energy market through technology specific tenders, that are crucial for the emergence of different renewable energy technologies, for a resilient, competitive European energy market that guarantees security of supply.
➢ Going beyong a competition based on simple metrics such as the levelised cost of electricity towards a greater inclusion of the positive and negative externalities in the design of auction;
➢ The heating and cooling market is by nature a local market: as such notification thresholds should only apply to the very largest projects.
➢ Capacity Remuneration mechanisms must incentivise the development of flexibility resources in line with the EU’s energy priorities, for instance flexible renewables, not constitute a lifeline to existing fossil or nuclear assets.