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European Union Implements New Guidelines On State Support For Renewable Energy

The European Union’s executive body, the European Commission, announced new guidelines Wednesday that would govern the public support for renewable energy projects in an attempt to integrate the burgeoning (and, arguably, relatively mature) industry into the market-proper.

According to the Commission, the new guidelines “will support Member States in reaching their 2020 climate targets, while addressing the market distortions that may result from subsidies granted to renewable energy sources.” Commission Vice President Joanquin Almunia said that “It is time for renewable to join the market.”

As the AFP put it in their news piece on the decision, “the new guidelines … require the bloc’s 28 member countries to gradually replace ad hoc renewable energy subsidies with a competitive bidding process for allocating public support.”

The Commission noted that the recent growth in the renewable energy industry “has helped to make progress on environmental objectives but has also caused serious market distortions and increasing costs to consumers.”

These new guidelines will dismantle some existing state-specific renewable energy subsidy programs in favour of a European Union-wide market-driven bidding process for allocating public support, but allowing for specific circumstances in each state.

The guidelines also allow for “supporting cross-border energy infrastructure to further the Single European Energy Market” which will help to develop a power grid capable of spanning borders and multiple generation techniques. Another factor of this will allow countries under a “real risk of insufficient electricity generation capacity” to seek aid, promoting the idea of generating excess energy for use elsewhere rather than shutting down.

“Europe should meet its ambitious energy and climate targets at the least possible cost for taxpayers and without undue distortions of competition in the Single Market,” Almunia said. “This will contribute to making energy more affordable for European citizens and companies.”

The EU Commission contends that the EU renewable energy industry and economy has suffered from policies that keep renewable energy prices higher than they would be using the bidding process that is promoted in the new guidelines. It should be noted that this is being rather hotly debated by experts in certain EU countries.

Oddly, nuclear power is not being subject to the same guidelines. “The guidelines also steered clear of intervening in the United Kingdom’s controversial state support of a nuclear energy project, with Almunia claiming the Commission’s ‘lack of expertise’ meant the guidelines would not cover nuclear energy.”


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