WRITTEN QUESTION P-2771/00

by Neil MacCormick (Verts/ALE) to the Commission

(2 August 2000)

Subject: Climate-change levy and hydro power

I refer to Mrs de Palacio's Answer to my Written Question E-1811/00(1) concerning hydrogenerated electricity, and in particular to her statement that hydro power is clearly a renewable energy source, but electricity from large hydroelectric installations mldr is in general competitive and does not need particular support.

In the case of large installations whose mechanical components are nearing the end of their useful life, maintenance of this power source clearly requires substantial expenditure on new plant. For example, in Scotland most relevant installations are over 40 years old. Has the Commission any evidence that the cost of refurbishing installations of this age is such that hydro power can continue to be competitive with other renewables in the event of the latter receiving advantages withheld from hydro power?

If the Commission has such evidence, will it please supply that evidence or any published source in which it may be discovered? If the Commission has no such evidence, will it reconsider its position in respect of hydro power installations nearing the date at which refurbishment of mechanical components is essential?

Does the Commission agree that its own strategy concerning climate change would be defeated if one consequence of its proposals was the closure of existing hydro installations in Scotland and other parts of the EU similarly situated?

(1) OJ C 89 E, 20.3.2001.

Answer given by Mrs de Palacio on behalf of the Commission

(28 September 2000)

The Honourable Member inquires about the continuous competitiveness of large hydro power installations in the specific case when these installations are over 40 years old and undergo refurbishing.

The Commission first of all would underline the importance of refurbishing hydro power to increase its efficiency and environmental standards.

The Commission does not have at its disposal any study giving average values of the cost of refurbishing in relation to the competitive position. In this context the Commission would point out that the costs of refurbishing are site specific and the costs will depend very heavily on the type of refurbishing involved.

The Commission's state aid policy as regards renewables is primarily aimed at focusing public support towards renewable energy technologies that are not yet mature enough to penetrate the market on their own. On the contrary, the Commission thinks that pure replacement investment, such as refurbishment of large hydroelectric installations, should in principle be carried out on the basis of commercial criteria, such as future demand for electricity or the availability of financial reserves which have been built during the lifetime of the hydro installation. Under the State aid rules, Member States only can under certain conditions encourage investment into installations that goes significantly beyond mandatory environmental standards.

In conclusion, the Commission thinks that its policy in favour of renewable energy sources does not lead to the closure of hydroelectric installations and that its state aid policy is supporting the combat against climate change while preventing inefficient use of public resources.