Austria and Poland in the firing line as EU to punish energy law breaches

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A plan by the Austrian government to enable energy-intensive businesses to avoid enduring the costs of subsidizing renewable power has come to the attention of the European Court of Justice.

The ECJ is to take action against Vienna for the move, which they look upon as a breach of European Union state aid rules, while Poland faces daily financial penalties for failure to bring through renewable energy legislation.
European Court of Justice
Austria has come under scrutiny for its proposed Green Electricity Act, yet to enter force, which is designed to help heavy industry to avoid the full cost of a fixed price for renewable energy that is higher than the market price.

Austria had appealed the European Commission's (EC) finding to the General Court of the EU, which dismissed the case on Thursday.

The Luxembourg-based court agreed with the Commission's assessment. Since the surcharge for green energy has been mandated by the Austrian government, partially exempting energy-intensive industries from paying it results in lost revenue and is therefore state aid, the court said.

Furthermore, Austria's law hands out the exemption selectively - only to energy-intensive businesses - while others are forced to pay the full surcharge for green energy. This skews competition and makes the government's help illegal, the court concluded.

Meanwhile, in a separate development the Polish government has been ordered to pay a daily fine after the EC found that it had continued to fail to implement EU renewable energy law in full.

Poland has been ordered to pay a daily fine of €61,000 ($76,000), as the Commission steps up its efforts to complete the single EU energy market.
Robert Rysbski
Robert Rybski, (pictured) climate and energy lawyer, of non-profit environmental law organisation ClientEarth Poland told Power Engineering International, that the decision to penalize Poland for failure to implement the Renewable Energy directive is long overdue

“Poland has not transposed the RES (Renewable Energy Sources) Directive completely and the bill is now overdue four years at this point. This delay has come about through lack of political will to support renewable energy development in Poland.”

Rybski added that coal power’s hegemony was being maintained through the government’s actions more or less obstructing green power’s progress.

“Constant changes to the Bill like changing the support scheme from green certificates (with quotas) to a tendering system have brought about such investment uncertainty that it effectively blocks any new investments. Thanks to this, coal-based generation does not receive competition from new generating RES units.”

“As a result, only one renewable-technology – on-shore wind- has been able to adapt and develop. Apart from it, lack of new regulation prolongs support for co-firing biomass with coal and old hydroelectric power stations.

Client Earth Poland added that the failure to bring in regulation in the area has had a particularly detrimental effect on small-scale renewable generators.

“It offers almost nothing to renewable sector microgeneration and prosumers. In that regard the beneficiaries of the support scheme will only be big energy utilities. But even those energy utilities are not treated equally as it is not technologically neutral. Finally, the bill does not provide full implementation of the RES Directive e.g. in regard to grid access – the Bill only foresees guaranteed grid access to winners of tenders – but in the light of the Directive all RES installations should get guaranteed grid access.”

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