EU State Aid Guidelines: Huge Problems Ahead

I have done a full analysis with detailed references on the problems with the new EU State Aid Guidelines for Renewable Energy. The paper will be published in the May edition of the European Energy Journal.  It is also being presented at the PowerGen 2015 conference in Amsterdam on June 10, 2015.

My take is that the guidelines are an effort to try to mitigate threats to power energy utilities. They push support into auctions, a mechanism proven to be bias in favor of large established utility bidders. They will hurt smaller investors and equity investment funds. They bungle the support for energy storage (electricity stored from renewable sources is not considered green after it is stored!). They hurt distributed energy by requiring sources over 500 kW to feed to the grid. The create massive uncertainty over 2020 targets by changing all the rules in the last lap of the race. They tie up renewable energy efforts by restricting what is financially feasible and environmentally desirable.

The issues that the guidelines try to address , i.e. overcompensation, can be addressed just as readily and maybe better by adjusting traditional support on new projects as technology cost change over time. The Commission's own study concluded that auctions were still in the experimental stage and that technology-neutral auctions were problematic at this point.

These issues arise due - in my opinion - to the weak green energy lobby in Brussels. Most associations in renewable energy have conventional energy companies as their biggest members. They are co-opted in regulatory proceedings and in mounting legal challenges to bad rules.

Europe needs a "green" green energy alliance that is comprised entirely of companies outside conventional energy corporate interests.

Anyone who would like a copy of the paper can email me: randymott  (at)


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