Renewable Energy Sources Act (EEG) Compliant with EU State Aid Rules?

The Renewable Energy Sources Act (EEG) is under review for compliance with the EU state aid rules, various newspapers reported. The EEG promotes renewable energy sources by stipulating fixed feed-in tariffs. Due to the costs involved, the EEG feed-in tariff scheme has seen many revisions over the last years. Yet the EEG surcharge for consumers has risen by 47% to 5.277 ct/kWh in 2013, as recently announced.

The Commission is reportedly looking into the feed-in tariff scheme as well as exemptions of energy-intensive companies from the so-called EEG surcharge with which consumers pay for the difference between the fixed feed-in tariffs paid pursuant to EEG for renewable energy fed into the grids and the sale of the renewable energy at the EEX energy exchange by the transmission system operators (TSOs).

1. Feed-in Tariff Scheme

According to the balance sheet on EEG related revenue and spending for 2011, EEG related spending amounted to EUR 16,052,895,079.19 in 2011, EUR 15,787,887,588.05 of which were feed-in tariff payments. Between 1 January and 31 October 2012, EEG payments amounted to EUR 17,668,377,446.96.

In an earlier ruling (ref. no. C-379/98) handed down in 2001 concerning the predecessor of the EEG, the Electricity Feed-in Act (StrEG), the Court of Justice of the European Union (CJEU), decided that “that a statutory provision of a Member State which, first, requires private electricity supply undertakings to purchase electricity produced in their area of supply from renewable energy sources at minimum prices higher than the real economic value of that type of electricity, and, second, distributes the financial burden resulting from that obligation between those electricity supply undertakings and upstream private electricity network operators, does not constitute State aid within the meaning of Article 92(1) of the EC Treaty” (now after amendment Art. 107 TFEU).

The question is whether it is time for a reassessment, in light of recent case law by CJEU. The current situation under the 2012 EEG in many ways differs from the situation under the 2011 StrEG. The EEG is no longer simply about feed-in tariffs. 

The discussion comes at a time when Germany is discussing another overhaul of the EEG. Environment Minister Peter Altmaier repeatedly said that he wanted a revision with broad support in Parliament and by the Federal Council. Hence it looks like an amendment may take place after the national elections in 2013.

In an interview with the magazine Wirtschaftswoche EU Energy Commissionar Günther Oettinger said in November the German energy policy shift towards a renewable energy supply would be easier to implement if Germany cooperated more with its neighbours and brought its policies more in line with the basic principles of the internal market.

2. EEG Surcharge Exemptions for Energy-intensive Companies

Another area of concern is compliance with the EU state aid rules for the exemptions of the EEG surcharge for which energy-intensive companies can apply pursuant to Sections 40 to 44 EEG. In connection with the latest announcement of a 47% rise of the EEG surcharge the exemptions have again come under criticism. Rheinische Post refers to sources at the Ministry of Economics, saying the exemptions will amount to EUR 300 million in 2012.

Source: Handelsblatt; Rheinische Post

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