New state aid guidelines for energy and environment

European Commission –

The European Commission has published its new guidelines for state aid rules for energy and the environment, following the consultation that closed earlier this year (please refer to EDSO Internal News Update No. 7 (2014) for more information). In its response to the consultation, EDSO called for the guidelines to allow state aid funding for smart grid development at distribution level, even if not a Project of Common Interest (PCI) or within an assisted region (under the Cohesion policy regional divisions). The new guidelines now clearly include smart grids alongside the PCIs and assisted regions, allowing for easier government spending on such projects, and allow the possibility for 100% cost coverage by the state.

Final guidelines

“The Commission considers that tariffs are the appropriate primary means to fund energy infrastructure. However, in the case of Projects of Common Interest, smart grids and infrastructure investments in assisted regions, State aid may be considered an appropriate instrument to partially or wholly finance that infrastructure.

Also positive is the addition of the term “smart grids” to the definition that clearly describes the characteristics of a smart grid (1.3 (31e)). In his press conference speech announcing the new guidelines, Commissioner for Competition, Joaquin Almunia, said the guidelines “facilitate the granting of support to infrastructure in assisted regions with under-developed energy networks and to Smart Grids which promote energy savings across the entire energy system.”

The new guidelines replace the 2008 guidelines and were adopted, in principle, by the EC on April 9th 2014. The formal adoption will follow shortly, ahead of the entry into force date of July 1st 2014. Later in the Spring/ Summer, the EC will release its proposal for the new General Block Exemption Regulation (GBER). EDSO will follow the development of this regulation.