Wednesday

26th Apr 2017

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.

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.

Opinion

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.

Member states vary in EU 'polluter pays' rules

An EU directive aimed at supporting the "polluter pays principle" has resulted in a patchwork situation, but the European Commission is not yet ready to propose a change.

Column / Crude World

Nord Stream 2: The elephant in the room

The European Commission should provide a thorough impact assessment of Nord Stream 2, a project that appears to go against all of its Energy Union objectives.

News in Brief

  1. Hungary's Orban will participate in EU parliament debate
  2. Malta floats cash-for-refugees plan
  3. Ivanka Trump to meet Merkel at Berlin women's conference
  4. Arctic Ocean could be ice-free in 20 years
  5. Nord Stream 2 to get €4.8bn from European energy firms
  6. Defeated Fillon retires from French politics
  7. Hollande: Vote Macron to avoid 'risk' for France
  8. Italy misses deadline on air quality warning

Stakeholders' Highlights

  1. UNICEFRace Against Time to Save Millions of Lives in Yemen
  2. Nordic Council of MinistersDeveloping Independent Russian-Language Media in the Baltic Countries
  3. Swedish EnterprisesReform of the European Electricity Market: Lessons from the Nordics, Brussels 2 May
  4. Malta EU 2017Green Light Given for New EU Regulation to Bolster External Border Checks
  5. Counter BalanceCall for EU Commission to Withdraw Support of Trans-Adriatic Pipeline
  6. ACCAEconomic Confidence at Highest Since 2015
  7. European Federation of Allergy and Airways60%-90% of Your Life Is Spent Indoors. How Does Poor Indoor Air Quality Affect You?
  8. European Gaming and Betting AssociationCJEU Confirms Obligation for a Transparent Licensing Process
  9. Nordic Council of MinistersNordic Region and the US: A Time of Warlike Rhetoric and Militarisation?
  10. European Free AllianceEFA MEPs Vote in Favor of European Parliament's Brexit Mandate
  11. Mission of China to the EUXinhua Insight: China to Open up Like Never Before
  12. World VisionViolence Becomes New Normal for Syrian Children

Latest News

  1. Russische schwarze Kassen bedrohen EU Demokratie
  2. Libya commanders in Brussels for migration talks
  3. Mixed review for EU asylum spots in Greece and Italy
  4. France still anxious over possibility of Le Pen win
  5. Free wifi plan backed by MEP committee
  6. Report: Germany blocks post-Dieselgate reform
  7. Russia suspected of Macron hack
  8. EU to exclude financial services from post-Brexit deal