Oettinger on Ålands Vindkraft

The German newspaper Welt has collected some reactions by Energy Commissioner Oettinger on the Ålands Vindkraft decision of the European Court of Justice I blogged about yesterday. Thanks to this Tweet by Heiko Stubner for the link.

The headline is that Oettinger asks for a EU-wide “subsidy scheme” as a consequence.

That impresses me as kind of cheeky. The Court of Justice just said a couple of days ago that no, Member States are free to restrict their support schemes to renewable energy generated inside of their territory, so as to be able to plan the cost for those schemes exactly, and in consequence make sure that those schemes stay in place over the long term, to achieve investor confidence in the stability of these support schemes.

So how is that ammunition for the Commission position in their useless and harmful “Guidelines on State aid for environmental protection and energy 2014-2020” (Paragraph 122) that Member States are required to open their support schemes?

The logic goes like this. Since the Court has made it clear that there is no legal obligation to open these markets, it is all the easier to get Member States to cooperate voluntarily with this position.

I agree. Much of my opposition to the EU Commission’s position here is motivated by an intense distaste for the fact that they think they get to decide on these matters instead of the Parliaments of the Member States, who are actually elected by citizens and have the competence to decide about these matters under current European Union rules. If the Commission drops this position and argues for their point of view on the merits, it’s a completely new situation.

And there actually may be some merit to open support schemes. All things equal, having an internal market leads to more competition and more efficient production. That is true for renewable energy as well as for any other sector.

The decisive reason against doing this right now is, as noted by the Court, that Member States need to make sure the cost of their support schemes remains under control.

The way to deal with that problem is to have some kind of mechanism to distribute costs. If there is a lot of wind energy from Denmark coming into the German market, that would not be a problem if Germany and Denmark agree on how the associated costs are distributed between the two countries. Such agreements are possible under Directive 2009/28 already, which addresses this question in recital 25:

Member States have different renewable energy potentials and operate different schemes of support for energy from renewable sources at the national level. The majority of Member States apply support schemes that grant benefits solely to energy from renewable sources that is produced on their territory. For the proper functioning of national support schemes it is vital that Member States can control the effect and costs of their national support schemes according to their different potentials. One important means to achieve the aim of this Directive is to guarantee the proper functioning of national support schemes. as under Directive 2001/77/EC, in order to maintain investor confidence and allow Member States to design effective national measures for target compliance. This Directive aims at facilitating cross-border support of energy from renewable sources without affecting national support schemes. It introduces optional cooperation mechanisms between Member States which allow them to agree on the extent to which one Member State supports the energy production in another and on the extent to which the energy production from renewable sources should count towards the national overall target of one or the other. In order to ensure the effectiveness of both measures of target compliance, i.e. national support schemes and cooperation mechanisms, it is essential that Member States are able to determine if and to what extent their national support schemes apply to energy from renewable sources produced in other Member States and to agree on this by applying the cooperation mechanisms provided for in this Directive.

Articles 6 to 8 of the Directive provide the framework for joint support mechanisms, and Article 9 extends that to joint projects with third countries (for example Northern African countries building capacity in the Sahara desert, Desertec).

Published by kflenz

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

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