European court supports national subsidy schemes

A positive development for renewables and wind energy in the EU arena is the recent Court of Justice of the European Union (CJEU) ruling of September 2014, which supports national green energy certification schemes favouring local energy producers. The decision confirmed an earlier ruling that EU member states have the right to promote green energy over common market rules. In this case, Flemish electricity supply company Essent had tried to meet its green energy obligation with power produced in Denmark, the Netherlands and Norway, but this was refused by the authorities and the company was subsequently fined around €1.5m. Essent appealed the decision on the basis of a claim of breach of the free movement of goods. However,the CJEU, to which the case was later referred, ruled that the Flemish regulator’s decision to restrict its green certificate scheme to local producers was “justified by the public interest objective consisting in promoting the use of renewable energy sources with a view to protecting the environment and combating climate change”.

The ruling comes two months after a similar decision against the Finnish wind energy producer Ålands Vindkraft’s plea for Swedish green certificates.

The judgements are welcomed by the renewables industry, including the European Wind and Energy Association (EWEA), as reassurance that green certificate subsidy schemes could continue to favour national producers in the short term to avoid disrupting the local renewable energy markets. The decisions properly reflect EU law, as the Renewable Energy Directive gives member states the right to determine which projects are eligible for support, whether these are within national borders or outside.

Sources: Judgment of the Court (Fourth Chamber) of 11 September 2014 (request for a preliminary ruling from the Rechtbank van eerste aanleg te Brussel — Belgium) — Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt (Joined Cases C-204/12 to C-208/12):
ENDS Europe, 12 September 2014

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