Commission accused of attacking aid for green electricity

"We have been in a legal dispute with the Commission for some time already," a Luxembourg government source, who preferred not to be named, told EurActiv. The system, called feed-in tariffs, "is criticised by the Commission because it is assimilated to state aid", the source said.

In July this year, the Commission delivered a ruling which said that feed-in tariffs in Austria had to be assimilated to state aid. However, it noted that the scheme was in compliance with the EU directive on the promotion of green electricity and authorised it. But it also ordered Austria to strip the scheme of a levy paid by final consumers on their electricity bill as it considered that this was leading to discrimination against imported electricity which did not receive the aid.

"What's important is that we can keep a firm base to support renewable energies," the Luxembourg source underlined, saying "there are EU objectives that we need to achieve". "We have difficulties understanding what the priorities are. This will not reassure investors."

Claude Turmes, a Green MEP from Luxembourg, says that there are internal disputes at the Commission over what kind of support scheme Brussels should publicly endorse. He says the dispute pits the competition and enterprise directorates against environment and energy.

"This is a political manoeuvre," says Turmes, who points out that if the Luxembourg feed-in pricing system collapses, the German one will follow. "In Germany, power utilities do not like the feed-in tariff system because it allows many new companies to enter the market." This, Turmes says, resulted in a 6% loss of market share representing "millions of euros of business". "DG Competition is wasting its time attacking 5% of the market share," he added.

In November 2005, the preliminary findings of a Commission inquiry highlighted lack of competition in the energy sector as a cause of major concern and criticised member states for keeping their markets closed to foreign competitors.