State Aid: Commission approves support schemes for renewable energy in Luxembourg and Malta
The European Commission has found plans by Luxembourg and Malta to support power generation from renewable sources to be in line with EU state aid rules. The schemes will increase electricity produced from renewable sources, in line with EU energy objectives, without unduly distorting competition.
In September 2015, Luxembourg notified its plans to support renewable energy production. The Luxembourg scheme introduces premium payments to support operators of wind, solar, biogas, hydropower and biomass installations. The total budget of the measure will be approximately €150 million, allocated between 2016 and 2020.
In December 2015, Malta notified plans to support operators of solar photovoltaic and onshore wind installations. Aid would be granted in the form of a premium payment on top of the market price. According to the plans, onshore wind developers can also tender for support if an eligible site receives development consent during the lifetime of the scheme. The total budget of the measure will be approximately €140 million, allocated between 2016 and 2020.
The Commission assessed the plans under the 2014 Guidelines on state aid for environmental protection and energy, which allow Member States to support the production of electricity from renewable sources under certain conditions.
The Commission found that the measures will encourage the deployment of renewable electricity installations and help Luxembourg and Malta achieve their 2020 renewable energy targets. In line with the Guidelines, operators above 500kW receive no feed-in tariff but market based premium payments. Both schemes ensure that the potential distortion of competition brought about by the public financing is minimised.
Under the Renewable Energy Directive, Luxembourg has a renewables target of 11% of gross electricity consumed by 2020. Luxembourg had an existing scheme for supporting renewables installations but notified the new measure as an alteration and extension of that scheme, which expired on 31 December 2015.
Under the same Directive, Malta has a renewables target of 10% of gross electricity consumed by 2020. By the end of 2014 Malta had achieved 4% renewables share. This new measure is meant to help it realise the remaining 6%.