Almunia Speech on Energy

Dec 03 2013 Published by under European and German energy law

EU Competition Commissioner Almunia has given a speech yesterday on EU competition policy in the energy sector.

He says that the Commission wants to revise the current guidelines on subsidies in the energy sector. Much of the speech is dealing with renewable energy policy. There will be a draft published before Christmas, and people will have an opportunity to comment on that.

I will reserve judgment until I have seen that draft. Right now, I only have two comments.

For one, it is none of the Commission’s or of Almunia’s business how Germany decides to change the Law on Priority for Renewable Energy. We just had an election in Germany. As a result of that election, the enemies of renewable energy FDP have been booted out of Parliament. There is a coalition government between CDU, CSU, and SPD coming up, and they have agreed on how they want to reform that law.

The party I voted for was the Greens. They lost in the election and will not be in the new government.

But nobody, not even one person, voted for Mr. Almunia in the German election. He has zero democratic legitimacy to override what the German voters wanted on election day.

He may also want to take a look at Article 194 of the Treaty on the Functioning of the European Union. That Article guarantees “a Member State’s right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply”.

In my humble opinion, the question on how to set feed-in tariffs is clearly one of “determining the conditions for exploiting its energy sources”. That means that attempts by Almunia and the Commission of unilaterally deciding these issues against the will of German voters are most unwelcome. I think they are illegal.

And, as noted repeatedly here, a feed-in tariff like the German one is no “subsidy” under EU law, since there are no taxpayer funds involved. That point has been clear since the Preussenelektra case of the European Court of Justice.

That said, some of the ideas in Almunia’s speech actually make sense. For example, it may be progress to set feed-in tariff rates by an auction model. And the German coalition agreement actually wants to do exactly that by 2018 (Page 58). Pilot projects for solar should start in 2016 at the latest.

There is nothing wrong with Almunia presenting his ideas on a successful energy transition. Some of them may have merit.

There is everything wrong with Almunia and the EU Commission attempting a power grab and trying to impose their will on Germany unilaterally.

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