State aid: Commission approves Greek support scheme for renewable electricity and cogeneration

 The European Commission has found the new Greek support scheme for renewable electricity and high efficiency cogeneration to be in line with EU state aid rules. The scheme will help Greece to reduce CO2 emissions, in line with EU energy and climate goals, without unduly distorting competition.

In July 2016 Greece notified plans to support electricity from renewable energy sources and high-efficiency cogeneration. The Commission found that the Greek scheme promotes the integration of such electricity into the market, in line with the Commission's 2014 Guidelines on State Aid for Environmental Protection and Energy. The Commission concluded that the scheme was likely to increase the proportion of green electricity and reduce pollution, while limiting distortions of competition due to the state support. The scheme will help Greece to meet its 2020 target of producing 18% of its energy needs from renewable sources.

The scheme includes state support either through a feed-in tariff or through a price premium in line with the Guidelines. Support with a feed-in tariff will be limited to small installations and installations on non-interconnected islands. Installations with a capacity above 500 kilowatt (KW) will, over a period of 20 to 25 years, receive a premium on top of the market price of electricity. Greece has demonstrated that the aid is limited in line with the Guidelines. This will minimise potential distortions of competition created by the public funding.

Today's decision approves aid to larger installations (above 1 000 KW) for the year 2016. Under the Guidelines, as of 1 January 2017, aid to larger installations has to be granted through competitive tenders to ensure that energy is produced at minimal cost for taxpayers. Greece will organise a pilot tender for photovoltaic energy and has committed to use competitive bidding processes for all aid granted to large installations as of 2017.

The Greek scheme will be financed through the renewables support levy currently in place in Greece. In order to avoid any discrimination against foreign renewable energy producers resulting from the financing mechanism, as of 2017 Greece will partially open up the renewables support scheme to foreign producers.

 

Background

The Commission's 2014 Guidelines on State Aid for Environmental Protection and Energy allow Member States to grant state aid for electricity from renewable energy sources and cogeneration, 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.

For more information on the 2014 Guidelines on State Aid for Environmental Protection and Energy, see also the Commission's Policy brief on "Improving State Aid for Energy and the Environment.

More information on the decision will be available, once potential confidentiality issues have been resolved, in the State aid register on the competition website under the case number SA.44666. The State Aid Weekly e-News lists new publications of state aid decisions on the internet and in the EU Official Journal.

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