EU Subsidy Probe Threatens Green Energy And Industry

  • Date: 16/12/13
  • Barbara Lewis, Reuters

A formal enquiry by EU regulators into German energy subsidies, expected this week, threatens to hand heavy industry a multi-billion euro bill and jeopardises Europe’s shift to green energy, campaigners and lawyers say.

Across the European Union, subsidies to help achieve an overall 2020 target to get 20 percent of energy used from renewable sources have been blamed for pushing up fuel costs.

On Wednesday, the European Commission is expected to announce an enquiry into Germany’s management of subsidies as it executes its Energiewende, or transition from fossil fuel and nuclear to renewable power.

To help them deal with costs, thousands of German intensive energy users have been exempt from a green surcharge ordinary customers have to pay. The Commission, the EU executive, is examining whether that was unfair and should be paid back.

A 51-page letter from the Commission to the German government seen by Reuters spells out concerns that the waiver was unlawful state aid.

No-one from the German government was immediately available for comment. Hans Juergen Kerkhoff, president of Germany’s Steel Association, said the discounts merely served to balance out distortion in global competition and were not illegal aid.

The final outcome still might be benign. Germany could be cleared or just asked to meet certain conditions in order to fall in line with EU internal energy market and competition rules.

But the enquiry alone into one of the most sophisticated green energy laws could shatter investor confidence in renewable energy, such as solar and wind, across Europe and it could drag on for months or even years.

HALT TO THE ENERGIEWENDE?

Doerte Fouquet, a Brussels-based lawyer at Becker Buettner Held, said the implications went far beyond the industry waiver, which the new German government would tackle.

“The problem is that with such a state aid investigation decision, the whole renewable energy system may break down. This could immediately affect running projects,” she said.

The European Renewable Energies Federation (EREF), which represents green energy, has urged the Commission to reconsider.

“With an opening of a full investigation procedure, the German Energiewende would come to a halt with immediate effect,” Rainer Hinrichs-Rahlwes, EREF president, wrote in a letter to the European Commission.

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