A new program of state support for projects in the environmental and energy sectors will come into force on July 1, 2014. The program was revised and adopted by the European Commission in April of the current year. Thus, the European Commission has published rules that define the conditions for providing financial assistance to member states in order to achieve their energy targets. The program is valid until December 31, 2020.
In particular, the rules cover support schemes for biomass, capacity mechanisms, renewables, energy infrastructure, carbon capture and storage, etc.
The main target of the program is to promote a gradual move to market-based support for renewable energy. Herewith the measures should be cost-effective for society and not lead to distortion of competition or fragmentation of the energy market.
The program's authors also believe that it is important to identify those industries that are eligible for some exemptions to electricity charges to support renewables.
The draft of the program lists varies principles concerning assessing aid by the Commission. These principles include having a clear objective, the need for state appropriateness and intervention. According to the program support should be limited to the minimum but encourage energy entities to effective action. The project must meet the requirements of openness and transparency as well.
According to the program from 2016 producers must sell electricity on the market. They will have an obligation to compensate for short-term deviations from their previous delivery commitments. In 2015-2016, member states will start implementing competitive bidding procedures for some share of their new capacity from renewables. These countries undertake to replace feed-in tariffs by feed-in premiums or certificates as well. From 2017, member states must set up tenders to grant support to all new renewable installations.
So, the European Commission has revised the rules for state support in the environmental and energy sectors that were adopted in 2008. According to the program member states will abolish subsidies for electricity and establish cost based on market-based pricing system both for industry and the public.
Author: Ivan Prokhorov
