German Energy Ministry Published Complete EU Commission Power Grab Document

Dec 21 2013 Published by under European and German energy law

The German Energy Ministry has published the complete complaint about state aid the EU Commission approved this week (in German). Again thanks to this tweet by Heiko Stubner for the link.

That full complaint explains in much more detail than the press release I blogged about a couple of days ago why the Commission thinks it can get away with the idea that the German Law on Priority for Renewable Energy is state aid under European Union Competition law. Very shortly summarized the Commission thinks that the German system has evolved a lot since the 2001 PreussenElektra Court of Justice decision.

The German government thinks otherwise. I support their point of view, but this may not be so one-sided as I thought before reading the whole thing.

The main disagreement seems to be on the industrial exceptions. The Commission doesn’t object to having a feed-in tariff. They see it as state aid, but think it is allowed for environmental reasons.

The Commission objects to the reduced surcharges for utilities fulfilling a certain quota of renewable energy (Article 39 of the Law), but the German Government plans to abolish that anyway.

The industrial exceptions will be the main point to discuss, if one doesn’t assume that the EU Commission doesn’t have any competence in this field in the first place.

These questions are complex. For the time being, I have only one short comment:

In the short term, German industry has to pay more for electricity because of the Law on Priority for Renewable Energy. I fail to see how a net increase in electricity cost can be possibly seen as an unfair advantage for German industry under state aid rules.

In the middle and long term, German industry will profit massively from the energy transition.

Compare the German industry’s situation with Japan, one of the big competitors. Japan has much less renewable capacity. They are far behind in the transition.

That means that Japan depends on expensive fossil fuel imports to a much larger extent than Germany does, which is a structural disadvantage for its industry compared to Germany.

And one could argue that this actually is state aid for the German industry. That would still have to get around the fact that no state resources are used for the energy transition. But it would at least make some kind of sense.

In contrast, the Commission complaint doesn’t make any sense at all. They essentially complain that the German industry has an unfair competitive advantage because they get to pay higher electricity costs.

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