The European Commission published its new EU Guidelines on State Aid for Climate, Environmental Protection and Energy. The new Guidelines allow National Governments to hold technology specific auctions and endorse revenue stabilisation mechanisms notably 2-sided CfDs.
These are pre-conditions for the accelerated deployment of wind energy towards climate neutrality. The EU Guidelines on State Aid for Climate, Environmental Protection and Energy (CEEAG) define the measures National Governments can take to grant state aid in line with internal market rules notably when it comes to renewables.
The revised State Aid Guidelines allow National Governments to hold competitive auctions for renewable energy projects. Importantly they offer Member States the flexibility to hold technology-specific auctions.
The Guidelines specifically mention revenue stabilisation mechanisms in the form of two-sided Contracts for Difference (CfD) as a good model to support the further expansion of renewables. Price will continue to be the lead criterion for allocating public support to wind energy projects, but not the only one. The European Commission decided to allow for up to 30% of non-price-based criteria to be introduced to national auctions. The State Aid Guidelines are broadening the scope of State aid to allow for different decarbonisation technologies to be supported. This includes that storage and renewable hydrogen projects are eligible for State support.
Pilot and demonstration projects are essential to innovation in wind turbine technology. With the new State Aid Guidelines, they can receive direct aid aside of auctions, if Member States can prove that there is not sufficient competition for those very specific projects. This now also applies to wind energy projects with turbine sizes of more than 6 MW, crucially allowing for the latest turbine technology to be used.
The new EU State Aid Guidelines will enter into force in the first quarter 2022. Member States will have a two-year transition period to adjust their national support frameworks to the new Guidelines.
