Ridiculous Rhetoric About State Aid ... from the Experts on Using Illegal Aid

The ongoing discussion about trying to block the prosumer support in the final law due to "state aid" issues is about an hypocritical as it gets.

PO spokesmen raised this earlier and it appears that the President of Poland may not take the bait. A good decision, since the entire Polish support system has been operating illegally for nine years and the Government has known this for at least three years now.

Similarly, we have been seeing a big bluff on whether the new law must be notified to Brussels.

Everyone privately knows that it must be notified, reviewed and approved. For several reasons, it does not meet the block grant exemption from notification. Most obviously, it continues support in the form of Green Certificates which the European Commission has advised informally to UOKiK are state aid. Aid up to 2017 must be levelized by technology and certainly all of the technologies including in the Polish National Action Plan for 2020 will have to be included. Other aspects of the new law also raise issues, such as requiring projects up to 1 MW to go to an auction, tax exemptions, continued support for co-firing, and some of the procedures included.[1]

My most guess is that all of these issues as well as the historical Green Certificate problem will be in negotiations with the European Commission this year and will be resolved by next year, but not in time for an auction to be held. The 2012 draft law is a good start as a "fix it" measure, but it will also end up being necessary to extend the date that allows new projects to use the Green Certificate system.  Right now, PO just wants to have "happy vibes" about green energy going into the election and assumes that voters are so ill-informed that the details will not be important.

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[1] I personally think that technology-neutral auctions, while in the new guidelines, are anti-competitive at this moment in the European market. Numerous studies draw this conclusion and both the British, French and German auctions have used technology bands. The EC guidelines can certainly be challenged on this grounds.

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