CMS | State aid in the energy sector

State aid issues are under focus and under pressure across the energy markets of Europe. They arise along the entire supply chain from generation to driving an electric car. Against the background of the challenging and hotly debated issues of how to incentivise change on the demand side, implement smart technologies, achieve increasingly ambitious climate change targets and fully integrate European markets, developers need certainty to be able to take investment decisions today. State aid matters to everyone in the sector.

This update on current issues begins with a look at energy issues in the European Commission’s State Aid Modernisation project, in particular at the new General Block Exemption Regulation and the 2014 Environmental Protection and Energy Guidelines. Since energy is a priority area across the Commission, we then review some important steps taken by other Brussels directorates and consider the key State aid issues in delivering the internal market.

The new Environmental Protection and Energy Guidelines reinforce the authorities’ approach to the assessment of whether State aid exists and whether aid is compatible with the EU internal market. This is reflected in our table of common principles in State aid assessment.

The convergence of current priorities and themes create opportunities, but also present challenges and uncertainties for investors and contractors. We review some of these under the heading “trends and issues”. This section (and this update) concludes with a brief look at some of the main points in a State aid notification procedure, which can be unclear to the beneficiary.