Leaked memo reveals EU infighting over renewable energy support

Windmills at dusk. Kimmel Bay, Wales. [Aaron Crowe / Flickr]

EXCLUSIVE / A draft compromise struck between the European Commission and the German government over future support for renewable energies in Europe has come under attack by legal experts in the Commission’s own competition directorate, euractiv.com has learned.

The compromise deal struck between the EU’s Competition Commissioner, Margrethe Vestager, and Vice-Chancellor Sigmar Gabriel, allows member states more wiggle room to support renewable energies after 2020, under certain conditions.

Initially negotiated between Gabriel and Vestager, the compromise deal was endorsed by Maroš Šefčovič, Commission Vice-President in charge of the Energy Union and Miguel Arias Cañete, the EU’s Climate Action Commissioner, EU sources told EURACTIV.

Article 4 of the draft renewable energy directive stipulates that member states “may apply” support schemes for renewable energy projects, “granted in an open, transparent, non-discriminatory tender procedure” and “without prejudice to state aid rules”.

Exceptions may, however, be granted “for small scale installations and demonstration projects as defined in the applicable state aid rules,” reads the draft directive, seen by EURACTIV.

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Claudes Turmes, a veteran Green MEP from Luxembourg who follows energy policy in the European Parliament, said the compromise was supposed to end years of “guerrilla” between the Commission’s competition directorate and the German government over the approval of support schemes for wind farms and other renewable energy projects.

But officials at DG Competition, backed by the Commission’s legal service, have attacked the compromise text on legal and political grounds, saying it allows too much room for EU member states to fund the projects they want. They argue it undermines the Commission’s ability to approve or reject particular projects based on EU state aid rules.

“DG COMP is concerned about parts of Article 4 of the draft directive which contains provisions on support schemes” for renewables, according to an internal memo seen by EurAcitv. EU treaties give the Commission “exclusive competence to determine whether state aid measures are to be considered compatible with the internal market,” the memo underlines.

Such provisions “should, therefore, be deleted”, reads the internal note, signed by Céline Gauer, director at Vestager’s DG Competition.

The infighting at the Commission comes as the EU executive puts the finishing touches to a revision of the EU’s Renewable Energy Directive, which is expected to be presented on 30 November as part of a “jumbo package” of energy laws.

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The new directive will frame how renewable energy support will take place over the coming years, as Europe faces increasing competition from China and the US in the renewable energy sector.

“Vestager understood that DG Competition cannot continue overruling member states on energy policy, without consulting the European Parliament,” Turmes said referring to the EU’s strict state aid guidelines for approving renewable energy projects.

Turmes said Vestager had shown political flair by accepting to break the state aid straightjacket, but is now facing a rebellion from angry officials who believe she is giving away key EU competences in the process.

“Gabriel is not amused” that the political compromise was being questioned internally at the Commission, said Turmes, adding that the German government was preparing a response to the DG Competition memo.

But Turmes was not optimistic about the European Commission’s determination to counter the internal rebellion. “I feel the Commission is not ready to counter this attack. Šefčovič was supposed to take a leading role on this but he has been really weak so far. He should put his foot down,” he said.

EU rules out ‘harmonisation’ of renewable energy support

The “active participation” of citizens and local communities in the supply and demand of electricity will be “the leitmotiv” of new energy proposals the European Commission is preparing for the end of the year, according to a senior EU official who ruled out harmonisation of national support schemes for renewables at this stage.

More broadly, Vestager’s apparent willingness to relax EU state aid rules on renewables can be seen as a way to even out Commission approval for so-called “capacity mechanisms”, which have allowed member states to support coal, gas, or nuclear projects for security of supply reasons.

“In political terms, ‘Brussels’ is always portrayed as the bad guy for blocking a particular project in a member state, based on some principled decision,” said Georg Zachmann, a senior fellow at Bruegel, an economic think tank.

“That’s not a role that Brussels can sustain politically for a very long time,” he told EURACTIV.

  • 28 November:  Commission chiefs of cabinet meeting
  • 30 November: 28-strong College of Commissioners expected to approve Winter Package of EU energy laws

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