Głowacki Law Firm

State aid rules regarding aid involved in optional transitional free allowances for the modernisation of electricity generation – unfeasible for beneficiaries? - Page 2
Thursday, 05 January 2012 22:26

The National Investment Plan should include investments in retrofitting and upgrading of the infrastructure, in clean technologies and in diversification of their energy mix and sources of supply in accordance with the ETS Directive undertaken after 25 June 2009.

Other important parameters for the State aid scheme concerned are:

1) Eligible costs must be limited to the annual investment costs listed in the National Investment Plan corresponding to the market value of free allowances (calculated in accordance with the Commission Decision of 29 March 2011) granted per beneficiary, irrespective of operating costs and benefits of the corresponding installation. Annual investment costs must be calculated as specified in the above-quoted Commission guidance on the methodology to transitionally allocate free allowances to installations for electricity production pursuant to Article 10c(3) of Directive;

2) Maximum aid intensity - aid must not exceed 100 % of the eligible costs;

3) Rules on cumulation - the aid ceilings set out in Guidelines must apply regardless of whether the support is financed entirely from State resources or is partly financed by the Union. Aid deemed to be compatible under Guidelines may not be combined with other State aid within the meaning of Article 107(1) of the TFEU or with other forms of financing from the Union if such overlapping results in an aid intensity higher than that laid down in these Guidelines. However, where the expenditure eligible for aid for measures covered by these Guidelines is eligible in whole or in part for aid for other purposes, the common portion will be subject to the most favourable aid ceiling under the applicable rules.

Considering the requirement that aid deemed to be compatible under Guidelines may not be combined with other State aid within the meaning of Article 107(1) of the TFEU it could be debatable what approach in that regard should be applied to green certificates schemes (TGC schemes) or feed-in tariffs (problem particularly pressing as regards TGC, however potentially capable of significantly complicate legal assessment also with many other respects).

Significant legal setback may be evoked also taking into account interactions of the State aid measure covered by the draft Commission Communication with other State aid programs supporting retrofitting energy infrastructure considering for instance the Commission Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (General block exemption Regulation) (OJ L 214, 9.8.2008, p. 3), as well as Guidelines on National Regional Aid for 2007-2013 (2006/C 54/08) (OJ C 54, 4.3.2006, p. 13).

Pursuant to Article 10c(6) of Directive 2003/87/EC the Commission should assess the applications submitted by Member States regarding free allocations concerned and may reject the application, or any aspect thereof, within six months of receiving the relevant information (the deadline for Member States to submit applications was 30 September 2011).

Taking into account the time-limits at issue it is highly probable that in the near future the problem will explode and considering the amount of free allowances at stake will have a great influence on the market price of emission allowances.




 

Cap-and-Trade Schemes

Flexible Mechanisms

Search

TwitterFacebookLinkedin
Copyright © 2009 - 2019 Michal Glowacki. All rights reserved.
The materials contained on this website are for general information purposes only and are subject to the disclaimer