European Commission to Probe State Aid Plans for Power Capacity in 11 EU Nations

The European Commission Wednesday launched a sectoral inquiry into state aid plans to supply electricity capacity in 11 EU nations.

"This sector inquiry sends a clear signal to member states to respect EU state aid rules when implementing capacity mechanisms," EU competition commissioner Margrethe Vestager said.

The EC said it would send different sets of questions to selected public authorities and market participants in Belgium, Croatia, Denmark, France, Germany, Ireland, Italy, Poland, Portugal, Spain and Sweden.

Those are the countries that either have or are considering a capacity mechanism, the EC said.

The UK is not involved as the EC formally approved its capacity mechanism under the 2014 EU energy and environmental state aid guidelines last July.

The EC said it planned to invite comments on its preliminary findings from the inquiry by end-2015 and publish the final results mid-2016.

It said it would look for design features that may distort competition between capacity providers or cross-border trade, and promote "competitive and market-based" mechanisms that complement the EU's internal energy market rather than divide it.

The results will also feed into the EC's plan to develop an EU-wide framework for assessing generation adequacy and ability to meet demand.

The EC has said it planned to propose "ambitious" new electricity market design legislation by the end of next year.

(Platts)