WRITTEN QUESTION E-3248/00

by Laura González Álvarez (GUE/NGL) to the Commission

(20 October 2000)

Subject: Guidelines for state environmental aids and the existing energy premium system

Renewable energy sources are undergoing a significant development in the Spanish state. In particular, wind energy is no longer marginal, having achieved a total installation volume of 1500 megawatts by the end of 1999, thus accounting for 2 % of current electricity production.

This development is based on the Spanish law governing the electricity sector, the plan for the promotion of renewable energy sources, and a number of mechanisms which ensure preferential access to the electricity grid for renewables and the preservation of premiums for this type of energy production.

According to the experts, the incentive system needs to be continued if the objective of doubling renewable energy production is to be achieved, thus complying with the Kyoto targets. The proposal for a European Parliament and Council directive on the promotion of electricity from renewable energy sources in the internal electricity market(1) favours continuing the existing support arrangements.

However, it appears that no system of incentives will be provided for under the Community guidelines for state environmental aids which are being prepared by the Commission. In the case of Spain, this would put a considerable brake on the development of renewable energy sources.

Does the Commission not believe that a suitable system of incentives should be maintained with a view to the development of renewable energies?

Does the Commission consider that the new guidelines for state environmental aids should ensure the continuation, under current conditions, of the renewable energy premiums system?

(1) COM(2000) 279.

Answer given by Mr Monti on behalf of the Commission

(12 February 2001)

The Commission agrees with the Honourable Member on the need to create conditions conducive to the development of renewable energy sources. That is why the new guidelines on state aid for environmental protection, adopted by the Commission on 21 December 2000(1), allow aid to be granted on the following terms:

Investment aid is allowed at the basic rate of 40 % of eligible costs. A further 10 percentage points may be added to the basic rate for small and medium-sized enterprises (SMEs), where the investment provides an entire community such as an island with energy, or for firms located in regions eligible for regional aid.

Member States also have the folliwing options for granting operating aid:

- Aid may be granted to cover the difference between the costs of producing renewable energy and the market price of that energy. Such aid is not limited over time but must cease once the investment has been written off. Where necessary, the amount of the investment may also take account of financial costs and a fair return on capital.

- Member States may also grant support using market mechanisms such as green certificates or tenders.

- Aid may also be granted on the basis of external costs avoided.

- Lastly, Member States may grant degressive operating aid for a period of five years.

The Commission considers this approach to be generous in terms of state aid but justified by the need to allow Member States to take every step to develop environmentally friendly sources of energy. It is an approach that is fully consistent with the proposal for a Parliament and Council Directive on the promotion of renewable energy sources(2).

(1) OJ C 37, 3.2.2001.

(2) COM(2000) 279 final.