Technology-Neutral Auctions for Renewable Energy: EU Law vs. Member State Reality

An Assessment of the EU Environmental and Energy State Aid Guidelines 2014–2020 and Their Application

In: Journal for European Environmental & Planning Law
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  • 1 Aurora Energy Research GmbH
  • | 2 Navigant Energy Germany GmbH
  • | 3 Navigant Energy Germany GmbH; Karlsruhe Institute of Technology (KIT), Germany
  • | 4 Neon Neue Energieökonomik GmbH (Neon), Germany; Mercator Research Institute on Global Commons and Climate Change (MCC), Germany

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European Union competition law, intended to thwart subsidies paid out by national governments, plays an important role in shaping EU Member States’ support schemes for renewable energy. The Environmental and Energy State Aid Guidelines 2014–2020, which formalize the European Commission’s take on subsidies in the electricity sector, prescribe technology-neutral auctions as the standard mechanism to determine support levels. In this study, we have assessed the formal decisions of the Commission with respect to technology-neutrality between July 2014 and May 2018. It turns out that 16 out of 18 schemes are not technology-neutral and figure high degrees of technology-differentiation. We have also studied the exemption clauses invoked to justify technology-discrimination, finding that the most ambiguous clause is used most frequently, and that the application and level of scrutiny varies strongly from case to case. The State Aid Guidelines are meant to increase transparency and legal certainty. We find that with respect to technology-neutral auctions for renewable energy, the Guidelines fail to deliver on their purpose.