State aid shaping new energy market environment

The European regulatory framework and, in particular, new guidelines set by the European Commission for state aid in energy and environmental protection for 2014 to 2020, have shaped an entirely new environment for the European energy market, it was concluded at a recent workshop held in Athens.

The event, “Modernization of the Regulatory Framework for State Aid – Challenges for the Greek Public Administration”, co-organized by the Hellenic State Aid Institute (EIKE), the Finance Ministry’s state aid department, and the Center of International and European Economic Law (CIEEL), was streamed live by energypress.

The presentations delivered at the event made clear the importance and advanced penetration of state aid in the energy sector, while also highlighting problems encountered in matters such as industrial energy pricing policy, the “disruption management” plan – to enables energy cost savings for major-scale industry in exchange for a reduction in energy consumption whenever required by the system, if overloaded – legal restrictions in the renewable energy source (RES) sector, and the shaping of the Capacity Assurance Mechanism.

Participants at the one-day event, held last Thursday, included authorities from both the public and private sectors, members of Greece’s academic community, as well as European Commission officials who analyzed new EU regulations concerning state aid, as well as the significantly revised framework for energy investment state aid, new guidelines, and the challenges faced in implementing these.

The new guidelines, enforced last April, reflect the increased penetration of RES producers in recent years. They note that unnecessary government intervention should be avoided to keep additional taxpayer costs to a minimum.

The new regulatory framework’s content includes a plan for the gradual introduction of RES payment mechanisms adjusted to market regulations, and replacement of feed-in tariffs with feed-in premium systems.

Other subjects discussed at the event included state aid cases linked with major energy-related topics in Greece, such as energy cost for industry, as well as the New Deal, introduced as a solution to the renewable energy sources (RES) special account deficit at LAGIE, the country’s Electricity Market Operator.

The EIKE president, Prof. Dr Antonis Metaxas, offered a timely analysis on the legal protection possibilities for energy players in state aid matters, as well as on the application of state aid regulations by national courts.