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In-depth Investigation of Germany’s Renewable Energy Act to be opened before Christmas?

According to recent press reports [1], EU Competition Commissioner Joaquín Alumia has announced that the European Commission will open an in-depth investigation of Germany’s Renewable Energy Act (Erneuerbare-Energien-Gesetz, “EEG”) before Christmas. The EEG promotes renewable energy sources by stipulating fixed feed-in tariffs. In order to ensure that in particular industrial customers with a high level of energy costs and which are subject to international competition are not forced to close done operations in Germany, the EEG allows for certain exemptions of energy-intensive companies. It still seems unclear whether the European Commission only will continue its investigation regarding these exemptions or also regarding further elements of the  feed-in tariff scheme of the EEG.

The European Commission had opened the first part of state aid proceedings, a preliminary investigation, into the EEG [2]a year ago.  In addition to that, in March this year the Commission already opened an in-depth investigation to find out whether exemptions for large electricity consumers from network charges granted in Germany since 2011 constitutes unlawful state aid. [3]

Since then, the level of feed-in tariffs as well as the level and scope of exemptions has increasingly been questioned in Germany, and the new coalition has agreed [4] on measures to cut back on exemptions so that only companies which indeed are subject to international competition benefit from these.

During the discussions on the coalition agreement, the leaders of the energy working group, Environment Minister Peter Altmaier and Hannelore Kraft, Head of the North Rhine-Westphalian Government, and thus a state where many of German large industrial consumers are located, had met with EU Commissioner Alumnia [5] to discuss which amendments might be required to accommodate concerns from the European Commission.

The opening of in-depth investigations does not mean that the exemptions are ultimately found to be state aid, or even if they are state aid that they have to be repaid. However, an in-depth investigation could force the new federal government to move faster in order to avoid that German industry is adversely affected by potential state aid risks.

Sources: Spiegel online [1],

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