The European Commission has found the Spanish scheme supporting
electricity generation from renewable energy sources, high
efficiency cogeneration of heat and power and waste to be in line
with EU State aid rules. The scheme will further EU energy and
climate goals whilst preserving competition.
Commissioner Margrethe Vestager, in charge of competition
policy, said: "I am pleased to see the latest Spanish
renewables auctions have shown the positive effects of
competition: companies are ready to invest in new installations
with very low levels of State support. Spain's transition to a
low carbon, environmentally sustainable energy supply is
important and this support scheme will help."
Under the scheme, beneficiaries receive support through a
premium on top of the market price of electricity, so that they
have to respond to market signals. This premium is meant to
help these facilities compensate for costs that cannot be
recovered from selling electricity in the market, and obtain a
reasonable return on investment.
The scheme has been in place since 2014 and applies to new
beneficiaries as well as to facilities that were benefitting
from previous support. In total, the scheme has around 40,000
beneficiaries. In 2016, the annual payments under the scheme
amounted to €6.4 billion.
Since 2016, support to new facilities is granted through
competitive auctions. Different technologies have competed with
each other in the latest auctions of May 2017 and July 2017. In
total, support for capacity of slightly more than 8 gigawatts
was awarded, essentially to wind and solar panel plants. As a
result of these auctions, beneficiaries will receive
compensation only if, in the coming years, the market price
drops to a level significantly below today's market prices.
This protection against an unexpectedly sharp fall in market
prices helps developers to secure project financing, and
therefore complete the projects on time. This will help Spain
achieve its 2020 environmental and climate change objectives.
The Commission assessed the scheme under EU State aid rules, in
particular the Commission's 2014 Guidelines on State
Aid for Environmental Protection and Energy. In particular,
they require competitive auctions for renewables support since
2017. They ensure that the use of public funds is limited and
there is no overcompensation. On this basis, the Commission
concluded that the Spanish measure will boost the share of
electricity produced from renewable energy sources, in line
with EU environmental
objectives, while any distortion of competition caused by
the state support is minimised.
The scheme is accompanied by an evaluation plan to assess its
impact. The results of this evaluation will be submitted to the
Commission by December 2020.
Background
The Commission's 2014 Guidelines on State
Aid for Environmental Protection and Energy, enable Member
States to support the production of electricity from renewable
energy sources (including from renewable waste) and high
efficiency combined heat and power plants, subject to certain
conditions. These rules are aimed at meeting the EU's ambitious
energy and climate targets at the least possible cost for
taxpayers and without undue distortions of competition in the
Single Market.
The Renewable Energy
Directive established targets for all Member States'
shares of energy renewable energy sources in gross final energy
consumption by 2020. For Spain, that target is 20% by 2020.
More information on today's decision will be available, once
potential confidentiality issues have been resolved, in
the State aid register on
the Commission's competition website
under the case number SA.40348.
The State Aid Weekly
e-News lists new publications of State aid decisions
on the internet and in the EU Official Journal.
