Stiftung Umweltenergierecht On Commission Guidelines

The Stiftung Umweltenergierecht has published an 89 page analysis (in German language) explaining how the recent move by the European Commission to violate Germany’s legislation competences is illegal. Thanks to this Tweet by Heiko Stubner for the link.

This study was commissioned by the think tank Agora Energiewende.

The main reasons why they think the Commission’s guidelines are illegal:

1. The Commission fails to provide any reasons for their opinion that a transition to a “competitive bidding process” is needed to avoid distorting competition (which is the Commission’s job).

2. The guidelines violate Article 194 of the Treaty on the Functioning of the European Union. I recall having made a similar argument. My argument was based on my opinion that the German feed-in tariff is not State aid in the first place.

Their argument is wider. They note that with a technology-neutral bidding model, Member States may end up with an energy mix different from that they would get if they were free to decide about their policy. That, in their view, is incompatible with Article 194, even if the feed-in tariff was State aid.

3. The guidelines are incompatible with the Renewable Energy Directive.

Article 3 of Directive 2009/28 says that Member States may apply support schemes. And Article 2 gives a definition of the term “support schemes”, which reads:

‘support scheme’ means any instrument, scheme or mechanism applied by a Member State or a group of Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green certificates, and direct price support schemes including feed-in tariffs and premium payments;

That means the combination of Article 3 and this definition gives Germany the right to use a feed-in tariff to support renewable deployment. If the Commission does not like that, they are free to propose an amendment to the Directive. But they can’t just go ahead and abolish this right Germany has unilaterally without worrying about a majority in Council and Parliament.

I think this third argument is a very worthwhile addition to the debate. And I am pleased that it helps my point of view.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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