21st Oct 2016

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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.


A world without waste

A garbage crisis in Naples, Italy, gave birth to the "zero waste" movement, but is the rest of Europe brave enough to change the way it thinks about trash?

News in Brief

  1. Canada and Wallonia end talks without Ceta deal
  2. Juncker hopes for Canada accord in 'next few days'
  3. Romania drops opposition to Ceta
  4. Difficulties remain on Ceta deal, says Walloon leader
  5. Brexit could lead to 'some civil unrest' in Northern Ireland
  6. ECB holds rates and continues quantitive easing programme
  7. Support for Danish People's Party drops, poll
  8. Spain's highest court overturns Catalan ban on bullfighting

Stakeholders' Highlights

  1. EFADraft Bill for a 2nd Scottish Independence Referendum
  2. UNICEFCalls on European Council to Address Plight of Refugee and Migrant Children
  3. ECTAJoin us on 9-10 November in Brussels and Discover the new EU Digital Landscape
  4. Access NowCan you Hear me now? Verizon’s Opportunity to Stand for Global Users
  5. Belgrade Security ForumMeaningful Dialogue Missing Not Only in the Balkans, but Throughout Europe
  6. EASPDJoin the Trip! 20 Years on the Road. Conference & Photo Exhibition on 19-21 October
  7. EuropecheEU Fishing Sector Celebrates Sustainably Sourced Seafood in EU Parliament
  8. World VisionWomen and Girls Urge EU Leadership to Help end Gender-based Violence
  9. Dialogue PlatformIs Jihadism Blind Spot of Western Intellectuals ? Wednesday 26 October
  10. Belgrade Security ForumGet the Latest News and Updates on the Belgrade Security Forum @BelSecForum
  11. Crowdsourcing Week EuropeMaster Crowdsourcing, Crowdfunding and Innovation! Conference 21 November - 10% Discount Code CSWEU16
  12. EJCEU Parliament's Roadmap for Relations with Iran a Massive Missed Opportunity