The EC state aid regime regarding renewables: opportunities and pitfalls

Article abstract:

This article analyses the integration of a Community priority, renewable energy sources. Member States nowadays financially support renewable energies, but have to comply with the state aid provisions of the European Community Treaty (EC Treaty). Therefore the European Community has created an entire legal framework aiming at promoting and supporting the use of renewables, which will be discussed in this article. Besides the different Directives and proposals promoting renewable energies in various ways, the Commission has also devised a set of guidelines on state aid for environmental protection where the current version of 2001 has extended their application more precisely to renewable energies. The article analyses these guidelines and their application with regard to renewable energy sources. Review of the new guidelines reveals that Member States are offered several new possibilities to promote renewable energies while complying with the state aid rules of the European Community. The article outlines the PreussenElektra judgement of the European Court of Justice (ECJ) and its political attractiveness with regard to the promotion of renewables. The article concludes that the European Community has provided a favourable manual of guidance but there is still a long way to go if we are to achieve an equal footing between renewable energy and conventional energy.