WRITTEN QUESTION P-3047/98

by Dietrich Elchlepp (PSE) to the Commission

(2 October 1998)

Subject: Criticism of the German power supply law

1. Is it true that, in a letter to German Economic Affairs Minister Günter Rexrodt, EU Commissioner Karel Van Miert has criticised the German rules on power supply remuneration for disrupting competition in the EU?

2. Does the Commission realise that in making such a statement, it comes into conflict both with the EU Directive for the internal market in electricity and with its own strategy, set out in the White Paper on renewable energy sources, of doubling the proportion of non-polluting sources - solar energy, wind, hydroelectric power and biomass - by 2010?

3. How does the Commission assess the statement that German supply remuneration arrangements could disrupt competition among power producers and end the practise of passing on any additional costs in a liberalised power market to customers, when the separation of supply and transport networks, on the one hand, and power production, on the other, is the very hallmark of a liberalised power market?

4. Does the Commission not know that the German power supply law amended in spring 1998 clearly places the sale and remuneration obligation on network operators and that the latter can reflect the costs in usage charges, so that competition between power producers is not disrupted in any way?

5. What objective grounds can the Commission give to support the claim that the statutory minimum price for wind power in Germany - currently 16,79 Pfennig per kilowatt-hour - represents "overcompensation"?

Does the Commission not know that a scientific measurement and evaluation programme carried out by German Government departments calculated average costs to be 16,60 Pfennig/kWh and that over the next few years, because of the link with average prices, supply remuneration in Germany will fall by 30 % to 14-15 Pfennig per kWh anyway?

Answer given by Mr Van Miert on behalf of the Commission

(28 October 1998)

1. The Stromeinspeisungsgesetz has been approved by the Commission as state aid in 1990, after having been notified by the Federal government. The EC Treaty not only obliges the Commission to control new state aid, but also to continue to assess state aid previously approved for its further compatibility with state aid rules. In this context a letter was sent in autumn 1996 asking the German government whether the developments in the sector were still in line with the autorization decision of 1990, in light of several complaints received by the Commission.

2. The position of the Commission is not in contradiction with the objective laid down in the white paper on renewable energies(1) to increase the market share of renewable sources of energy. The white paper in principle does not affect state aid rules, as far as state aid for the promotion of renewable energies still falls under the general state aid rules of the EC Treaty. At the same time, the positive attitude of the Commission towards the promotion of renewable energies is also shown in its state aid policy. The guidelines of the Commission for environmental protection foresee that aid for renewable energies is treated like environmental aid. When assessing whether an aid is exceptionally justified for environmental reasons, the Commission in principle takes a positive approach. In the examination of each case also environmental concerns and competition aspects have to be balanced.

3. The position of the Commission is not in contradiction with the directive on common rules for the internal market for electricity. This directive in principle does not affect state aid rules. When assessing the Stromeinspeisungsgesetz under state aid rules, one has to take into account that this directive will have to be implemented by the Member States by February 1999 and that the Commission presently envisages presenting a proposal for a directive for the harmonization of the treatment of renewable sources of energy. For these reasons, it seems appropriate to first await the further development.

4. The Commission knows that the Stromeinspeisungsgesetz as amended in spring 1998 imposes the purchase obligation and the payment obligation on the electricity companies which operate a net for general supply.

5. The Commission does not question that support is still necessary in order to compensate for competitive disadvantages of wind energy. However, considering the progressive development of wind energy since 1990, it has to be assessed - especially in the light of several complaints - whether the level of support is still in line with state aid law requirements.

(1) COM(97) 599 final.