19th Mar 2018

Alarm over EU proposal to cut loose renewable energy firms

  • The commission says its time to phase out state aid to renewable energy producers (Photo: David Huang)

European Commission proposals on Wednesday (9 April) to phase out subsidies for renewable energy producers have met with accusations of a "corporate capture" of EU policymaking.

Speaking to reporters in Brussels, competition commissioner Joaquin Almunia said the subsidies, partly paid through levies on big energy intensive industries, are distorting the internal energy market and increasing consumer costs.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

“Our objective now is to ensure renewable support is sustainable by gradually integrating the electricity generated through renewables into the market,” he said.

Almunia described the larger solar and wind energy sectors as mature enough to enter the open market.

“It is time that these technologies respond to market signals and that public support is allocated through a competitive process,” he said.

The six-year plan or the so-called energy and environmental state guidelines kicks off in July, replacing existing 2008 rules.

The guidelines were adopted a day after Germany’s government passed legislation to scale back its renewable energy ambitions in an effort to stem rising electricity prices.

Almunia’s plan drops to a fraction, if member states want to, the surcharges on energy intensive industries. The money is used to help prop up renewables.

Burdened by the contributions, Almunia says some of the companies face stiff international competition and risk moving their activities outside Europe.

For his part, Luxembourg Green MEP Claude Turmes says such companies account for 15 to 20 percent of all electricity consumed in Europe but will only have to pay 1.5 percent of the total bill of the transition towards cleaner energy targets.

“This is going away from the polluters pay principle and introducing, the more you pollute, the bigger the gifts you get from government,” he noted.

Turmes said the guidelines had been “hijacked” by Business Europe, a trade association representing the largest corporations in Europe and by the pan-Euro association of electricity producers, Eurelectric.

He accused the EU commissioners for energy, transport, budget, and commission President Jose Manuel Barroso for siding with Business Europe to drop the subsidy levies on big business.

“What is happening with Barroso II is corporate capture as I have never seen it in the last 15 years I have been Brussels,” he said.

He said Almunia should be focussing, as competition commissioner, on the unfair market advantages given to the EU’s coal, gas and nuclear industries instead of undermining the growing green energy sector.

Almunia’s guidelines also call for other changes.

They mean that from 2016 onwards, renewable energy companies will have to shift from a fixed-tariff rate to feed-in premiums.

A year later, they will be required to enter a competitive bidding process in order to receive any aid.

Both are said to create risks and uncertainties that are likely to off put investors and slow down the overall production of green energy in favour of coal and nuclear industries.

The guidelines exempt small installations or technologies at an early stage of development.

Turmes is not alone in voicing criticism.

Brussels-based Climate Action Network Europe, a coalition working on climate and energy issues, said the new EU rules “favour large scale, incumbent, traditional fossil-fuel based energy producers.”

In a rare move, Almunia’s proposal was also voted on by the roundtable of European commissioners on Wednesday.

Almunia said three commissioners abstained. One commissioner voted against.

Green groups unhappy with EU climate proposals

The European Commission’s latest climate proposals fall short of the mark, say pro-green groups, following a UN report, which warned of irreversible consequences of a warming planet.


Massive EU gas investment a mistake

Europe's massive investment plan – some €200 billion – in gas-related infrastructure is a huge misstep that does not address the challenge of Europe's energy demands or climate change commitments.

New pesticides committee begins work on EU approvals

The new European Parliament committee will try to restore citizens' trust in the procedure after the glyphosate affair. Its 30 members have some experience on pesticide issues - but different positions.

News in Brief

  1. Sweden emerges as possible US-North Korean summit host
  2. Google accused of paying academics backing its policies
  3. New interior minister: 'Islam doesn't belong to Germany'
  4. Hamburg 'dieselgate' driver wins case to get new VW car
  5. Slovak deputy PM asked to form new government
  6. US, Germany, France condemn 'assault on UK sovereignty'
  7. MEPs accept Amsterdam as seat for EU medicines agency
  8. Auditors: EU farm 'simplification' made subsidies more complex

Stakeholders' Highlights

  1. Counter BalanceConmtroversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  2. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  3. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  4. Martens CentreEuropean Defence Union: Time to Aim High?
  5. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  6. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  7. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  8. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  9. EPSUWill the Circular Economy be an Economy With no Workers?
  10. European Jewish CongressThe 2018 European Medal of Tolerance Goes to Prince Albert II of Monaco
  11. FiscalNoteGlobal Policy Trends: What to Watch in 2018
  12. Human Rights and Democracy NetworkPromoting Human Rights and Democracy in the Next Eu Multiannual Financial Framework

Latest News

  1. Brexit and trade will top This WEEK
  2. Dutch MPs in plan to shut EU website on Russian propaganda
  3. Four years on – but we will not forget illegally-occupied Crimea
  4. Evacuated women from Libya arrive newly-pregnant
  5. Merkel in Paris for eurozone reform talks
  6. Commission rejects ombudsman criticism over Barroso case
  7. Western allies back UK amid Russian media blitz
  8. Meet the European Parliament's twittersphere

Stakeholders' Highlights

  1. Mission of China to the EUDigital Cooperation a Priority for China-EU Relations
  2. ECTACompetition must prevail in the quest for telecoms investment
  3. European Friends of ArmeniaTaking Stock of 30 Years of EU Policy on the Nagorno-Karabakh Conflict: How Can the EU Contribute to Peace?
  4. ILGA EuropeCongratulations Finland!
  5. EUobserverNow Hiring! Sales Associate With 2+ Years Experience
  6. EUobserverNow Hiring! Finance Officer With Accounting Degree or Experience
  7. UNICEFCyclone Season Looms Over 720,000 Rohingya Children in Myanmar & Bangladesh
  8. European Gaming & Betting AssociationEU Court: EU Commission Correct to Issue Guidelines for Online Gambling Services
  9. Mission of China to the EUChina Hopes for More Exchanges With Nordic, Baltic Countries
  10. Macedonian Human Rights MovementCondemns Facebook for Actively Promoting Anti-Macedonian Racism
  11. Nordic Council of MinistersGlobal Seed Vault: Gene Banks Gather to Celebrate 1 Million Seed Collections
  12. CECEIndustry Stakeholders Are Ready to Take the Lead in Digital Construction