EPIA: EC guidelines on state aid could prevent states from reaching renewable energy goals

The latest draft guidelines on state aid by the European Commission have drawn criticism from the European Photovoltaic Industry Association (EPIA), claiming they could “constrain member states’ capabilities to reach their 2020 binding renewable targets”.

A public consultation period on the draft guidelines is open until 14 February. Meanwhile, The Solar Trade Association's (STA) head of public affairs, Leonie Greene, also offered a criticism of the guidelines, calling them “incredibly ill-informed” and arguing their implementation could seriously damage STA members' businesses.

The draft was put forward in November last year and suggested replacing feed-in tariffs with feed-in premiums to reflect market prices. The EC also recommended the use of reverse auctions for tendering processes for projects in order to encourage competition. Additionally the guidelines advised against retroactive measures including the cutting of support programmes.

EPIA's head of policy, Frauke Thies, originally raised concerns around the EC draft guidelines in November, including the fear that reverse auctioning processes would neglect small-scale generation installations and the lack of support offered to self-consumption PV users.

EPIA has this week offered direct replies to two aspects of the draft which are included in the public consultation process. One is a reply to the more general Guidelines on Environmental and Energy State Aid for 2014-2020, the other a reply to a draft regulation declaring certain categories of aid compatible with the internal market.

In replying to the Guidelines on Environmental and Energy State Aid for 2014-2020, EPIA head of regulatory affairs Alexandre Roesch argued that “State Aid rules should not replace energy policy.” Roesch said that the EC’s current proposals on renewable energy went “far beyond the framework defined in the relevant European legislation.”

According to Roesch and EPIA, technology-neutral bidding processes in particular that member states would have to implement in granting support to “deployed” renewable energy technologies. EPIA argues that technology-specific support is the best way to avoid overcompensation. The organisation argues that the adoption of a technology-neutral bidding process could constrain the choices of member states from helping energy technologies to mature and “achieve their full competitive potential.” EPIA believes this provision should be abandoned from the guidelines.

The trade association’s response also argues against a distinction made by the EC between “deployed” and “less deployed” technologies, calling it “arbitrary and unnecessary”. EPIA also argues for a threshold of 5MW to define small-scale generation, so that the co-operative driven projects can qualify for support – the association feels that many of the provisions laid out by the EC’s proposals appear to be aimed specifically at large-scale generation. In making the distinction, EPIA still regards the feed-in tariff as a viable form of aid for small-scale installations, and believes the Commission Regulation should “explicitly recognise” this.

EPIA feels that the State Aid regime should not be used to facilitate the integration of renewable energy sources and that this purpose is better served by Renewable Directive 2009/28/EC which is already in place.

While EPIA welcomed the opportunity to offer comment to the consultation process, it also identified what it called “several clerical mistakes” and said “some key concepts are not properly defined”. In EPIA’s estimation this makes it difficult and often “confusing” for stakeholders to fully understand the Commission’s proposals.

EPIA welcomed the Commission Regulation’s objective of clarifying exemptions to investment aid. However, again one of the main points raised by EPIA is the confusing nature of the guidelines and its definitions of aid and technologies.

The STA's Leonie Greene last week strongly urged members to respond to the public consultation and said, “if you care about the future of the renewables industry across Europe, let the Commission know what you think.”

In related news, a group of 91 companies and trade associations, including the Solar Trade Association, EPIA, IKEA, Juwi and Younicos made a statement yesterday addressing the need for binding renewable energy target framework for 2030. The statement stressed how the EU’s “liberalised energy markets strongly depend on reliability”, with the group asking for a legally binding target on renewable energy for 2030. The statement spoke of the need for new climate and energy framework for the EU based on “mutually reinforcing tools and targets,” asking for support from policymakers for such a framework.