Public consultation on the EU State Aid Guidelines for Energy and Environmental Protection

Summary of Energy Cities’ response

We advocate for an EU State aid legal framework that supports a flexible, efficient, sustainable and locally-driven energy market. State Aid rules must be a tool to drive the decarbonisation of the energy markets and the implementation of renewables and energy efficiency solutions. We believe that well-designed State aid schemes and measures can ensure that the EU meets its commitments under the Paris Agreement, and empower local authorities to accelerate their energy transition to support the EU in meeting these commitments.

State aid rules therefore have to:

• Promote the financial investment and use of renewable energy, demand-response and energy efficiency;

• Prevent the granting of aid that promotes carbon lock-in through investments in unsustainable projects and stranded assets;

Taking this into account, it is critical that:

• A new set of Energy and Environmental Protection State aid Guidelines (EEAG) for after 2020, is aligned with the EU’s commitment to create a decarbonised, sustainable and Paris-proof energy market;
• The new EEAG should also be fully aligned with the Clean Energy for all Europeans package, in particular as regards the provisions on citizen energy communities and renewable energy communities.

The new EEAG should facilitate the integration of small-scale operators and of non-conventional, decentralised business models such as citizen /renewable energy communities. The exemption rules laid down under paragraphs 125 and 127 EEAG were, and remain, necessary for ensuring deployment of these indispensable market operators. However, as these stakeholders are still deploying and as many face barriers for integrating into concentrated energy markets dominated by incumbents, the level of thresholds should be adapted (increased, and in any case certainly not lowered) so as not to hinder those market operators that are exceeding the thresholds, but are still too small to effectively bid in competitive processes (e.g. auctions), from receiving support.
Special conditions for citizen/renewable energy communities will enhance the deployment of this business model and contribute to the objective to empower citizens pursued by the Clean Energy for all Europeans package.

Read our full response to the public consultation in the attached policy document: