The Green Tank contributed with comments to the European Commission’s public consultation on the revised Climate, Environmental protection and Energy Aid Guidelines.
State aid is important to achieve Just Transition, the cornerstone of the European Green Deal. The provision of state aid can contribute its attainment, acting in support of other European funding sources.
Specifically, the suggested guidelines on State aid do not acknowledge the specific characteristics and the important role of Renewable Energy Communities (RECs) and do not correspond to the Clean Energy Package and REDII. This is reflected in the lack of provisions for supportive measures for the RECs’ projects, at a time when Just Transition is one of the greatest challenges for the whole Europe.
The revised guidelines should mention explicitly the RECs as an emerging business sector that can benefit from state aid under specific restrictions and requirements. That would be truly supportive for their reinforcement and their recognition as a crucial lever of Just Transition.
On the aforementioned basis it is proposed that the guidelines:
- Should provide for the use of state aid specifically for nonprofit RECs that aim to cover the energy needs of their members. Specifically, the guidelines could for the use of subsidies to cover part of the installation cost of renewable power generation systems or heating systems from RES or energy efficiency projects or small scale energy storage projects for the non-profit RECs that aim to cover their own energy needs. The reason for this is the fact that such schemes have practically no access to funding while members of the energy community are not able to self-finance or find other own resources to cover the corresponding cost.
- Should allow the design of specific competitive scheme for renewable energy projects only for energy communities. With such a scheme equitable terms of their participation in competitive bidding procedures among energy communities will be ensured while creating a safety net to help their development and possibly avoiding problems that emerged in several member states. The experience from Germany, where the implementation of competitive bidding procedures since 2016 has actually driven RECs out of the energy market, can offer useful conclusions on how to improve the competitive bidding schemes. In this direction the Irish Renewable Electricity Support System, could serve as a prototype to be integrated in the revised guidelines showing the way that the member states should follow in order to establish a custom renewable energy supportive scheme with citizens’ participation.
- Should increase the threshold exempting small renewables production installations from the requirement to participate in competitive bidding to 1MW until the aforementioned special schemes for competitive bidding procedures for RECs are established and become operational. This provision should be included under the condition that all the projects of this category should have a capacity lower than a threshold that is defined by each member state.
The Green Tank’s contribution to the consultation is available here.
