Se ha denunciado esta presentación.
Utilizamos tu perfil de LinkedIn y tus datos de actividad para personalizar los anuncios y mostrarte publicidad más relevante. Puedes cambiar tus preferencias de publicidad en cualquier momento.

Commissie aanvaardt Vlaamse groenestroomcertificaten

168 visualizaciones

Publicado el

The Commission has accordingly decided not to raise objections to the aid granted to the green energy certificates and combined heat and power certificates schemes on the
grounds that the aid is compatible with the internal market pursuant to Article 107(3)(c).
of the Treaty on the Functioning of the European Union.

  • Hey guys! Who wants to chat with me? More photos with me here 👉 http://www.bit.ly/katekoxx
       Responder 
    ¿Estás seguro?    No
    Tu mensaje aparecerá aquí

Commissie aanvaardt Vlaamse groenestroomcertificaten

  1. 1. Zijne Excellentie de heer Didier REYNDERS Minister van Buitenlandse Zaken Karmelietenstraat 15 B – 1000 Brussel Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111 EUROPEAN COMMISSION Brussels, 16.2.2018 C(2018) 1003 final PUBLIC VERSION This document is made available for information purposes only. Subject: State Aid SA.46013 (2017/N) – Belgium Green electricity certificates and CHP certificates in Flanders Sir, The European Commission wishes to inform Belgium that, having examined the information supplied by your authorities on the matter referred to above, it has decided not to raise objections to the notified aid measures. 1. PROCEDURE (1) Following pre-notification contacts, on 27 October 2017, Belgium notified the Commission, in accordance with Article 108(3) of the Treaty on the Functioning of the European Union (TFEU) two schemes supporting renewable energy (RES) and cogeneration in Flanders. At the request of the Commission, Belgium provided additional information by letter on 18 December 2017. (2) The notification concerns two certificates schemes originally declared as not constituting State aid within the meaning of Article 107(1) TFEU by the Commission in a Decision of 25 July 2001 in case N 550/20001 for the "green electricity certificates ("GECs") scheme" and a Decision of 13 May 2005 in case N 608/20042 for the "Combined Heat and Power ("CHP") certificates scheme". 1 Commission decision of 25 July 2001 in State aid case N 550/2000 – België – Groenestroomcertificaten, OJ C 330, 24.11.2001, p.2. 2 Commission decision of 3 May 2005 in State aid case N 608/2004 – België – Warmtekrachtcertificaten, OJ C 240, 30.09.2005, p.20.
  2. 2. 2 Belgium notified both schemes for legal certainty as it considers that the schemes do not involve State aid within the meaning of Article 107(1) TFEU. (3) On 9 January 2018, Belgium waived its right under Article 342 TFEU in conjunction with Article 3 of the EC Regulation No 1/19583 to have the decision adopted and notified in Dutch and French and agreed that the decision be adopted and notified in English. 2. DESCRIPTION OF THE MEASURE 2.1. Background 2.1.1. The 2001 Commission decision on the GECs scheme (4) In 2000, Belgium notified to the Commission the GECs scheme to support electricity produced from renewable energy sources. The Commission concluded in 2001 that the GECs scheme did not, in principle, constitute State aid and that, even if, contrary to this conclusion, it should constitute State aid, it would be compatible with the internal market. (5) The characteristics of the GECs scheme were as follows: one green certificate is granted to electricity producers from renewable energy sources ("RES producers") for each 1 MWh of green electricity produced. At the end of each year, all Flemish electricity suppliers ("access holders") must possess a certain quota of GECs. The minimum number of GECs corresponds to a percentage of the total electricity supplied by access holders to electricity consumers (based on deliveries in the previous year). This percentage is set by the Flemish authorities. (6) A fine is to be paid by the access holder in case it does not fulfil its quota obligation. Fines would go to an energy fund financing projects in line with the Flemish policy of sustainable energy. (7) The scheme was notified for a period of ten years. (8) In 2006, Belgium notified to the Commission a new separate measure aimed at incentivising electricity production in photovoltaic ("PV") installations through a purchase obligation and a guaranteed minimum price. This notified measure concerns an obligation for the Flemish distribution system operators (DSOs) to purchase the GECs when offered to them, at a certain minimum price. The determined minimum price for a "PV" green certificate was EUR 450 at the time of the notification. This measure did not replace the quota obligation imposed on access holders which remained in place. (9) The DSOs sell the obtained GECs on the market for green certificates with the objective to recover the costs incurred by buying these certificates. If the revenues of the sale are not sufficient to recover the costs there is also a possibility for the DSOs to increase the tariffs for the connection and the use of the grid for the end 3 Regulation No 1 determining the languages to be used by the European Economic Community, OJ 17, 6.10.1958, p.385.
  3. 3. 3 consumers with the objective to recuperate the expenditure for the purchase of the GECs. (10) The GECs eligible for DSO purchase at a minimum guaranteed price are those granted for PV installations operational after 1 January 2006. The green certificates can be granted for the expected economic life time of the installation which is until 20 years after it became operational. (11) The Commission concluded in 20064 that this new measure on the purchase obligation and the minimum price guaranteed for GECs issued for each 1 MWh of electricity produced from PV installations did not constitute State aid within the meaning of Article 87(1) EC Treaty5 . 2.1.2. The 2005 Commission decision on the CHP certificates scheme (12) In 2004, Belgium notified to the Commission a combined heat and power certificates scheme to support energy efficiency. The Commission concluded in 20056 that the CHP certificates scheme did not constitute State aid within the meaning of Article 87(1) EC Treaty7 . (13) The characteristics of the CHP certificates scheme were as follows: a CHP certificate is defined as a transferable intangible good which proves that the related CHP installation, in the mentioned year, achieved 1 MWh of primary energy saving realised. At the end of each year, access holders must possess a certain quota of CHP certificates. This quota obligation is sanctioned by a fine if it is not met. (14) The scheme was notified for a period of ten years. 2.2. Legal basis of the notified GECs and CHP certificates schemes (15) The legal basis of the GECs and CHP certificates schemes is the so-called Energy Decree of 8 May 20098 , modified by the Decree of 27 November 2015 on various energy provisions9 and the Decision of the Flemish government laying down general provisions on energy policy (the "Energy Decision") of 19 November 201010 . 4 Commission decision of 24 October 2006 in State aid case N 254/2006 – België – Fotovoltaïsche panelen , OJ C 314, 21.12.2006, p.80 5 Article 107(1) TFEU. 6 See footnote 2. 7 Article 107(1) TFEU. 8 "Decreet houdende algemene bepalingen betreffende het energiebeleid" of 8 May 2009 – hereafter "the Energy Decree". 9 "Decreet van 27 november 2015 houdende diverse bepalingen inzake energie" published in the Belgisch Staatsblad/Moniteur belge on 10 December 2015. 10 "Besluit van de Vlaamse Regering houdende algemene bepalingen over het energiebeleid" of 19 November 2010 – hereafter "the Energy Decision".
  4. 4. 4 2.3. The notified GECs and CHP certificates schemes (16) The two notified schemes are the result of numerous amendments of the initial schemes notified to the Commission in 2000 and 2004. Their current features are described below. 2.3.1. The green electricity certificates scheme (17) The main objective of the GECs scheme is to promote the production of electricity from renewable energy sources, in order to contribute to reaching the Belgian target laid down in the RES Directive11 of at least 13% share of renewable energy from gross final consumption by 2020. By means of an internal agreement, the target of 13% has been divided between the three regions of Belgium (Flanders, Wallonia and Brussels) and the federal level. At Flemish level, the target was fixed at 25.074 GWh of final energy from renewable sources by 2020. (18) Under the current GECs scheme, RES producers operating an installation with a starting date as of 1 January 2013 receive, for 1 MWh of electricity generated from renewable energy sources, a number of GECs equal to 1 multiplied by a so- called "banding factor". RES producers receive GECs only during the amortisation period of their installations (see "lifecycle" row in the Tables below). (19) Belgium presented the banding factor as the factor determining the number of certificates the RES producer receives in relation to the amount of electricity produced, i.e. if the banding factor is equal to 1, the RES producer receives 1 GEC per 1 MWh of electricity produced and if the banding factor is lower than 1, the RES producer will need to produce more than 1MWh of electricity to receive 1 GEC. The banding factor is adjusted by the Energy Agency to reflect changes in the investment costs, fuel prices, the electricity price, etc. (20) The Table below presents the various parameters, including costs and revenues, used by Belgium to determine the level of support to be granted to RES producers per type of technology eligible under the GECs scheme. Belgium indicated that the calculation is mainly based on data from market research and is regularly updated by the Flemish Energy Agency. Belgium explained that, for some type of installations, there is a substantial gap between the LCOE12 and the total revenues mainly due to the fact that i) the banding factor is capped to 1 and thus, some projects receive less support than needed to reach the predefined internal rate of return (IRR)13 , and ii) the energy costs savings that companies can realise by avoiding costs in their electricity and heat consumption can be higher than the market prices used for the calculations. 11 Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 in the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (OJ L 140, 5.6.2009, p.16). 12 Levelised Cost of Energy 13 Predefined IRR to be used for the LCOE's calculations are set in the Energy Decision.
  5. 5. 5 Table 1 – Typical parameters for PV and onshore wind installations Supported technology PV 10-250kW14 PV 250-750kW onshore wind turbines 10kW- 4MW Technical input parameters operating hours per year 899 899 2250 gross electric power (kWe) 139 444 2500 lifecycle (years)15 15 15 15 Costs investment costs 161,111.00 462,222.00 3,275,000.00 total operational costs 51,945.00 163,920.00 1,759,519.00 Income Market prices:  electricity (€/MWh)16 27.28 27.28 30.82 Green certificates (GEC):  minimum price GEC (€/GEC) 93 93 93  banding factor 0.481 0.441 0.629  total revenues GEC (€/GEC) 44.733 41.013 58.497 Total revenues 72.01 68.29 89.32 IRR 5% 5% 8%17 LCOE (€/MWh) 141 127 90.10 Source: Flemish authorities (21) At the end of each year, all Flemish access holders must possess a minimum number of GECs, which they can obtain by producing renewable electricity themselves or have to purchase GECs from RES producers. Each access holder has the statutory obligation to transfer an amount of certificates corresponding to its quota obligation to the Flemish electricity market regulator, the VREG18 , at the end of each year (Article 7.1.10 of the Energy Decree). (22) The quota obligation of an access holder corresponds to a percentage of the electricity consumption by its customers. Article 7.1.10 of the Energy Decree set the formula used to establish the minimum number of GECs per access holders: 14 Belgium indicates that the category of PV installations between 10 and 250 kW does not include PV for households. The “household PV” category (below 10 kW) is not eligible anymore for support due to a decision of the Flemish Government of 29 May 2015 (in force since 14 June 2015). 15 On 15 December 2017, the Flemish authorities adopted a Government Decision (not yet published in the Belgian Official Journal) stipulating that for PV projects with a starting date as of 1 April 2018, the depreciation period would be 10 years, and for onshore wind projects with a starting date as of 1 January 2019, the depreciation period would be 20 years (Articles 18, 6° jo. 25). 16 Belgium indicated that the reference electricity price used in the calculation takes into account the value of the electricity produced from PV and wind installations in comparison with the general market price. It explains why the reference electricity price is different for PV and wind installations compared to other types of installations. 17 On 15 December 2017, the Flemish authorities adopted a Government Decision (not yet published in the Belgian Official Journal) stipulating that for projects with a starting date as of 1 January 2019 there will be a reduction of the IRR for onshore wind from 8% to 7.5 % (Articles 18, 6° jo. 25). 18 Vlaamse Regulator van de Elektriciteits- en Gasmarkt.
  6. 6. 6 C = Gr x Ev Where: C is equal to the number of GECs to be transferred to the VREG in the year by a specific access holder; Ev is equal to the total quantity of electricity, expressed in MWh, drawn from year n-1 from offtake points in the Flemish Region at which the access holder concerned was registered as access holder in the access register of the electricity distribution system operator, operator of a closed distribution system, operator of the local electricity transport system or operator of the transmission system. In this respect, the quantity drawn per offtake point is limited to the quantity drawn during the period in which the person concerned was registered as access holder; Gr is equal to: 0.205 in 2018; 0.215 in 2019 and beyond. (23) Belgium indicated that the VREG is an independent body which establishes the number of GECs per Flemish access holder each year by means of the formula set out above. It also verifies the authenticity of the GECs and registers all GECs in a central database. The following data are recorded for each certificate: details of the owner, production year and place, technology used, rated power, date of commissioning of the renewable energy technology, registration number and aid received for the production installation (Article 6.1.14 of the Energy Decision). (24) Normally, GECs are transferred to the VREG at the end of the obligation year (31 March). By being transferred to the VREG, they are removed from the market. However, access holders can keep the GECs and choose to transfer them to the VREG at a later date. The GECs are valid for a period of ten years (Article 7.1.5 of the Energy Decree). (25) Access holders failing to achieve their annual quota must pay an administrative fine to the VREG (Article 13.3.5 of the Energy Decree). The revenue of these fines is transferred to the so-called Energy Fund which is used by the Flemish government for the purpose of implementing its energy policy and, in particular, financing the VREG, public service obligations in the energy field, its social energy policy, its rational energy use policy, its cogeneration policy, its policy on renewable energy sources and financing the energy-related costs of the Flemish government (Article 3.2.1 of the Energy Decree). (26) Belgium indicated that the objective of the fine system is two-fold: it creates an incentive for access holders to buy GECs while at the same time it sets a cap to the GEC price, such that there can be no overcompensation even if GECs become too scarce. Belgium considers that the fine can therefore not be regarded as a penalty. (27) The price of the fine is set in Article 13.3.5 of the Energy Decree at EUR 100 for each missing GEC.
  7. 7. 7 (28) The quota obligation for access holders is reduced when part of the electricity drawn from their offtake points is consumed by energy-intensive undertakings. These reductions are not part of the present decision and will be notified separately. (29) According to Articles 7.1.6 and 7.1.7 of the Energy Decree, the DSOs also have the obligation to purchase at a minimum price the GECs offered to them by producers of renewable electricity. They can sell them on the GECs market in order to recover their costs. The costs incurred by the obligation to purchase GECs at a minimum price are divided between DSOs pro rata the volume of electricity distributed by each DSO during the year concerned. (30) The minimum price of one GEC is set at EUR 93 for all installations starting operation as of 1 January 2013 (Article 7.1.6 of the Energy Decree). 2.3.2. The CHP certificates scheme (31) The main objective of the CHP certificates scheme is to support energy efficient CHP production with the objective to reduce greenhouse gas emissions. (32) Tables below present the various parameters, including costs and revenues, used by Belgium to determine the level of support to be granted to CHP installations per type of technology eligible under the CHP certificates scheme. Belgium indicated that the calculation is mainly based on data from market research and is regularly updated by the Flemish Energy Agency. Belgium explained that, for some type of installations, there is a substantial gap between the LCOE and the total revenues mainly due to the fact that i) the banding factor is capped to 1 and thus, some projects receive less support than needed to reach the predefined IRR, and ii) the energy costs savings that companies can realise by avoiding costs in their electricity and heat consumption can be higher than the market prices used for the calculations.
  8. 8. 8 Table 2 – Typical parameters for biogas and biomass CHP installations Supported technology agricultural- industrial biogas CHP 10kW-5MW biogas GFT19 -waste CHP 10kW-5MW agricultural- industrial biogas CHP 5MW-20MW solid biomass CHP 10kW-20MW liquid biomass CHP 10kW-20MW waste biomass CHP 10kW-20MW Technical input parameters operating hours per year 7770 7200 7770 6800 3000 7600 gross electric power (kWe) 2800 1300 7000 10000 800 10000 lifecycle (years)20 10 10 10 10 10 10 Costs investment costs 10,640,000.00 16,250,000.00 25,690,000.00 46,000,000.00 1,248,000.00 43,000,000.00 total operational costs 22,300,813.00 37,055,459.00 59,118,384.00 87,188,912.00 5,354,998.00 42,491,676.00 Income Market prices:  electricity (€/MWh) 34.1 34.1 34.1 34.1 34.1 34.1  heat (€/MWh)21 n/a22 30.2 n/a 11.6 31.05 11.6 Green certificates (GEC):  minimum price GEC (€/GEC) 93 93 93 93 93 93  banding factor 1 1 1 1 1 1  total revenues GEC (€/GEC) 93 93 93 93 93 93 CHP certificates (CHP Cs): 19 GFT: bio-waste from households. 20 On 15 December 2017, the Flemish authorities adopted a Government Decision (not yet published in the Belgian Official Journal) stipulating that for projects with starting dates as of 1 April 2018 the support and depreciation period for biogas and biomass installations will be 15 years. The reason for this change is because the important components of these installations have a lifespan of at least 15 years (instead of 10 years). The depreciation period of the CHP-categories was not adjusted. (Articles 18, 6° jo. 25). 21 Belgium indicated that the reference heat price differs between the categories of installations because the heat price is linked to the purchase price for natural gas: the market value for heat is decided on the basis of the avoidance of costs for purchasing gas to fulfil the demand of the heat consumer. Given that the costs for purchasing gas differ for different categories of consumers, the market value for heat differs as well. Belgium used the gas prices from Eurostat data to determine the market value for heat. Belgium also uses a "factor to convert heat price" so as to convert the caloric value of the heat (€/MWhcal) into an electric value (€/MWhe). This factor varies from one type of installation from another because of the ratio of the thermal efficiency compared to the electrical efficiency. As an example, Belgium indicated that a CHP steam turbine (see Table 4 below) has a very high thermal efficiency and quite low electrical efficiency, therefore, the factor to convert heat price for this type of installation is very high. 22 There is no heat price for agricultural and industrial biogas installations because the heat produced by these installations is fully used by them.
  9. 9. 9 Supported technology agricultural- industrial biogas CHP 10kW-5MW biogas GFT19 -waste CHP 10kW-5MW agricultural- industrial biogas CHP 5MW-20MW solid biomass CHP 10kW-20MW liquid biomass CHP 10kW-20MW waste biomass CHP 10kW-20MW  minimum price CHP Cs (€/CHP C) 31 31 31 31  banding factor 1 1 1 1  primary energy saving 168.0% 202.5% 168.0% 102%  total revenues CHP Cs (€/CHP C) 52.1 62.8 52.1 n/a23 31.7 n/a Total revenues 179.1 220.0 179.1 138.7 189.8 138.7 IRR 12% 12% 12% 12% 12% 12% LCOE 187.40 344 186 268 332 148 Source: Flemish authorities 23 Solid biomass and waste biomass CHP installations do not qualify as high-efficiency CHP and therefore are not eligible to CHP certificates.
  10. 10. 10 Table 3 – Typical parameters for natural gas CHP installations Supported technology natural gas CHP 10-200kW natural gas CHP 0,2-1MW natural gas CHP 1-5MW natural gas CHP 5-10MW Technical input parameters operating hours per year 4000 3930 4940 5170 gross electric power (kWe) 70 500 2000 6400 lifecycle (years) 10 10 10 10 Costs investment costs 152,600.00 560,000.00 1,546,000.00 4,864,000.00 total operational costs 448,520.00 2,188,601.00 9,479,154.00 25,760,863.00 Income Market prices energy:  electricity (€/MWh) 34.1 34.1 34.1 34.1  heat (€/MWh) 59.9 44.1 42.8 27.4 CHP certificates (CHP Cs):  minimum price CHP Cs (€/CHP C) 31 31 31 31  banding factor 1 1 1 0.731  primary energy saving 79.7% 96.6% 118.5% 122.0%  total revenues CHP Cs (€/CHP C) 24.7 29.9 36.7 27.6 Total revenues 118.7 108.1 113.6 89.1 IRR 12% 12% 12% 12% LCOE 251.85 160.36 129.17 104.43 Source: Flemish authorities
  11. 11. 11 Table 4 – Typical parameters for other types of CHP installations Supported technology CHP biogas landfill gas 10 kW - 5MW CHP gas turbine 1-20MW CHP steam turbine 1-20MW CHP CCGT24 1-20MW CHP gas turbine 20-50MW CHP steam turbine 20-50MW CHP CCGT 20-50MW Technical input parameters operating hours per year 4600 7470 5700 7330 7470 5700 7470 gross electric power (kWe) 500 7000 5000 9000 30000 30000 37000 lifecycle (years) 10 10 10 10 10 10 10 Costs investment costs 765,000.00 13,860,000.00 5,800,000.00 19,260,000.00 40,800,000.00 31,200,000.00 78,440,000.00 total operational costs 1,049,859.00 64,150,884.00 80,226,847.00 75,734,587.00 186,201,721.00 462,128,952.00 244,447,489.00 Income Market prices energy:  electricity (€/MWh) 34.1 34.1 34.1 34.1 34.1 34.1 34.1  heat (€/MWh) 12.1 60.2 193.6 48.2 30.6 193.6 30.6 CHP certificates (CHP Cs):  minimum price CHP Cs (€/CHP C) 31 31 31 31 31 31 31  banding factor 1 1 0.697 1 1 0.92 1  primary energy saving 13.9% 93.4% 135.0% 70.1% 54.8% 116.8% 54.8%  total revenues CHP Cs (€/CHP C) 4.30 28.95 29.16 21.73 16.98 33.31 16.98 Total revenues 50.5 123.2 256.9 104.0 81.6 261.0 81.6 IRR 12% 12% 12% 12% 12% 12% 12% LCOE 97.86 163.45 314.55 162.63 116.72 302.51 140.29 Source: Flemish authorities 24 Combined Cycle Gas Turbine
  12. 12. 12 (33) Belgium presented the CHP certificate scheme as similar to the green certificates scheme. The following specificities can however be noted regarding the CHP certificates scheme: i. The minimum price of one CHP certificate amounts to EUR 31, as set out in Article 7.1.7 of the Energy Decree; ii. The CHP certificates do not have a limit of their period of validity; iii. The price of the fine for each missing CHP certificate is set at EUR 38 (Article 13.3.5 of the Energy Decree). iv. According to Article 7.1.11 of the Energy Decree, the following formula is used to establish the quota obligation of CHP certificates per access holders: Cw = W x Ev Where: Cw is equal to the number of CHP certificates to be transferred to the VREG in the year by a specific access holder; Ev is equal to the total quantity of electricity, expressed in MWh, drawn from year n-1 from offtake points in the Flemish Region at which the access holder concerned was registered as access holder in the access register of the electricity distribution system operator, operator of a closed distribution system, operator of the local electricity transport system or operator of the transmission system. In this respect, the quantity drawn per offtake point is limited to the quantity drawn during the period in which the person concerned was registered as access holder; W is equal to: 0.112 in 2018; 0.112 in 2019 and beyond. 2.4. Financing of the schemes 2.4.1. Financing of the quota obligation for access holders (34) Access holders can pass on the costs of the quota obligation to the end consumers. Belgium explained that the Flemish Region on the one hand has sole competence for the policies on renewable energy and rational energy; on the other hand it has no competence regarding end tariffs which is a federal responsibility. As a result, the Flemish authorities cannot implement any ban on passing on the costs of the quota obligation to the end consumers. 2.4.2. Financing of the purchase and transfer obligation for DSOs (35) Belgium indicated that DSOs receive a compensation for the obligation to purchase surplus of GECs issued for renewable electricity or CHP certificates
  13. 13. 13 issued for energy savings from high-efficiency CHP installations connected to their network and to closed distribution networks. (36) Belgium described the situation on the certificates market as characterised by a surplus of certificates as, since 2006, there are more certificates available than the number of certificates to be collected by access holders under their quota obligation. This surplus situation leads to a frequent recourse to the purchase obligation imposed on DSOs. (37) Belgium explained that the surplus situation greatly impacts the certificates market and on the price at which the certificates are traded. On the spot market (the "Belpex Green Certificate Exchange") price formation has not been possible for a long time because the demand for certificates has been met mainly through bilateral transactions between producers and DSOs when producers request DSOs to buy their certificates at the minimum guaranteed price. When the DSOs place the purchased certificates back on the market – as they are required to do in line with Article 7.1.7 paragraph 2 of the Energy Decree – they find that there is no demand and this threatens to push the price down faster and further. (38) Belgium considers that unless a measure is put in place to remove the structural surplus of certificates from the market, there is no prospect of balance in the market. To remedy this surplus situation, Belgium established a transfer obligation of certificates by the DSOs to the VREG. The DSOs then receive a compensation provided by the Flemish government. (39) This compensation for the certificates that DSOs have in their portfolio will be the lower of (i) the purchase price paid for the certificate, or (ii) the accounting value of the certificate in question, and may not exceed EUR 93 per certificate issued for renewable electricity and EUR 31 per certificate issued for CHP energy savings. (40) The budget for the compensation of DSOs amounts to EUR 325 million in 2017: EUR 226 million to serve as a one-off compensation for CHP certificates and EUR 99 million to serve as a compensation for GECs. In 2018, EUR 152 million is envisaged to serve as a compensation for certificates in the portfolios of the DSOs. As of 2019 until 2021 an amount of EUR 93 million is envisaged. 2.5. Beneficiaries (41) The beneficiaries of the GECs scheme are the electricity producers from renewable energy sources (including CHP installations using renewable energy sources). (42) The beneficiaries of the CHP certificates scheme are the high-efficiency CHP installations satisfying the definition of high-efficiency cogeneration as set out in Article 2(34) of Directive 2012/27/EU25 . 25 Directive 2012/27/EU of the European Parliament and the Council of 25 October 2012 on energy- efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC (OJ L 315, 14.11.2012, p.1).
  14. 14. 14 2.6. Budget and duration (43) Over the recent years, the exchanges between access holders and RES producers amounted to around EUR 700 million per year and the exchanges between access holders or DSOs and high-efficient CHP amounted to around EUR 200 million per year. (44) The schemes are notified for a period of ten years. 2.7. Cumulation (45) Belgium indicated that the aid measures cannot be cumulated with other aid measures for the same eligible costs. (46) Belgium also indicated that a high-efficient CHP using renewable energy sources can receive both types of certificates (for the RES electricity produced and for the energy savings – see Table 2 above). To avoid double support for this type of installation, the revenues from the CHP certificates are taken into account in the calculation determining the amount of GECs the producer receives. 2.8. Transparency (47) Belgium has confirmed that the transparency requirements set out in section 3.2.7 of the Guidelines on State aid for environmental protection and energy 2014- 202026 (EEAG) will be complied with. 3. ASSESSMENT OF THE MEASURE 3.1. Existence of aid (48) Article 107(1) TFEU provides that "[s]ave as otherwise provided in th[e] Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market". (49) In determining whether a measure constitutes State aid within the meaning of Article 107(1) TFEU, the Commission has to apply the following criteria: the measure must be imputable to the State and involve State resources, it must confer an advantage on certain undertakings or certain sectors which distorts or threatens to distort competition and is liable to affect trade between Member States. The application of these cumulative conditions is examined below. (50) Belgium considers that the GECs and CHP certificates schemes do not involve State aid and notified them for legal certainty. (51) Belgium considers that the two certificates schemes do not entail a transfer of State resources as they represent a resources exchange between private parties and are therefore in line with the PreussenElektra case law. 26 OJ C 249, 31.7.2014, p. 1-28.
  15. 15. 15 (52) Firstly, Belgium refers to the previous Commission decisions (N 550/2000, N 608/2004 and N 254/2006) and contests the approach taken by the Commission regarding the application of the judgment in case C-279/08 P – Commission v Netherlands regarding the NOx emission allowances27 to certificates scheme (see paragraphs (59) to (62) below). It considers that the granting by the VREG of green certificates free of charge to RES producers is merely a proof the green energy was actually produced and that in that situation there is no loss of revenue for the Flemish government. Belgium considers that it is necessary to draw a distinction between systems for tradable emission or pollution allowances (like in the NOx case), in which governments have reason to sell or auction these allowances since the negotiable allowances grant the party concerned the right to emit or pollute and, on the other hand, certificate systems in which the certificate has no value for its recipient with respect to the State, and will serve only as recognised proof of a certain production and for which governments have no reason to sell or auction those certificates to the producers. (53) Secondly, Belgium refers to the judgment of the General Court of 10 May 201628 about State aid decision SA.33995 appealed by Germany. In this judgment, the Court confirmed the PreussenElektra judgment and that "it is apparent, […] from the analysis of the factual background of the case giving rise to the judgment of 13 March 2001 in PreussenElektra that, unlike the German measure forming the subject matter of the present proceedings, the mechanism laid down by the previous German law provided neither for the additional costs to be expressly passed on to final consumers nor for the intervention of intermediaries entrusted with the collection or administration of the sums constituting aid and, therefore, did not provide for entities comparable, in their structure or their role, to the TSOs taken together." Belgium considers that this is also the case for the GECs and CHP certificates schemes where there is no guarantee for access holders that the costs which they bear for the purchase obligation will be covered in full by end consumers. As well, under the two certificates schemes, access holders are bound to purchase certificates with their own financial resources and there is no mechanism compensating extra costs arising from the purchase obligation and with which the State acts as surety for access holders that those extra costs will be covered in full. In Flanders, neither the TSO, DSOs, nor any other public or private entity play the part of settlement centre or intermediary for the collection and administration of revenues contrary to other certificates mechanisms implemented in the Netherlands, France, Germany, Austria and Romania. Belgium adds that there are no separate accounts for the revenue originating from the support mechanism imposed on access holders. (54) The Commission considers that the support to electricity produced from renewable energy sources and to primary energy savings granted by way of certificates can constitute State aid within the meaning of Article 107(1) TFEU. It is why it has introduced a special section in its Guidelines setting out the conditions for the compatibility of such support mechanisms, based on certificates, with the Internal Market (see paragraph (109) and Section 3.3.2.4 of the EEAG). 27 Judgment of 8 September 2011, Commission v Netherlands, C-279/08 P, EU:C:2011:551. 28 Judgment of 10 May 2016, Germany v Commission, T-47/15, EU:T:2016:281, paragraph 99.
  16. 16. 16 3.1.1. Existence of State resources (55) Under the GECs and CHP certificates schemes, Belgium is granting certificates for free to RES producers and high-efficiency CHP. At the same time, it creates a market for the certificates by imposing on access holders to purchase a quota of those certificates and thus creates a demand for the GECs and CHP certificates. (56) Contrary to the position expressed by Belgium that the two certificates schemes do not involve a transfer of State resources, the Commission will demonstrate below that the opposite is true for two reasons. First, by granting certificates for free to the RES producers and to high-efficiency CHP while setting up a quota obligation for access holders, Belgium foregoes State resources (see section 3.1.1.1 below). Secondly, the control exercised by the State over the financial flows between RES producers or high-efficiency CHP and access holders proves that the support comes from State resources (see section 3.1.1.2 below). Both lines of reasoning elements lead independently from each other the Commission to the conclusion that State resources are involved. 3.1.1.1. The granting for free of green certificates (57) The GECs and CHP certificates schemes are based on the principle that the Flemish government grants the certificates to the RES producers and high- efficiency CHP (beneficiaries) for free. The State has also created an artificial market (i.e. a market that would not exist without intervention by the Flemish government) for these certificates by imposing a quota obligation on access holders. The quota obligation has been set up pursuant to Articles 7.1.6 (for green certificates) and 7.1.7 (for energy savings certificates) of the Energy Decree. (58) Firstly, by giving certificates for free to RES producers and high-efficiency CHP, the State is actually providing them, for free, with intangible assets. Secondly, the certificates can be traded on a specific market and by selling them the RES producers and high-efficiency CHP obtain revenues. (59) In a judgment29 from 8 September 2011, the Court of Justice observed that NOx emission allowances were tradable30 , as (i) the State authorises the sale of these allowances and (ii) it allows those undertakings which have emitted a surplus of NOx to acquire from other undertakings the missing emission allowances. This creates a market for the allowances. By making allowances tradable, the State conferred on them a market value. (60) In the case of the GECs and CHP certificates schemes in Flanders, the market is created by the principles of the support system itself, i.e. the State imposes through legally binding provisions an obligation on access holders to submit annually a certain number of certificates (quota obligation). Similar as in the NOx case, here the legal framework creates, without real consideration supplied to the State, certificates, which, because of the demand created by the State and their tradable character, have an economic value. 29 Judgment of 8 September 2011, Commission v Netherlands, C-279/08 P, EU:C:2011:551 (the NOx case). 30 Judgment of 8 September 2011, Commission v Netherlands, C-279/08 P, EU:C:2011:551, paragraph 88.
  17. 17. 17 (61) In the NOx case, the Court of Justice also found31 that the emission allowances had the character of intangible assets provided by the State free of charge to selected undertakings. By conferring on the emission allowances the character of tradable intangible assets and by making them available to the undertakings concerned free of charge the State foregoes public resources. (62) The Commission considers that the same reasoning can be applied to the GECs and CHP certificates schemes. The State has created tradable assets in form of certificates and made them available to RES producers and high-efficiency CHP. Further, the State has conferred an economic value on them by creating a genuine market for the certificates with a demand stemming from the quota obligation imposed on access holders and determining the compensation fee. Instead of selling the certificates or putting them up for auction, the State allocates the certificates for free and thus it foregoes public resources. (63) In case of non-compliance with the quota obligation, under Article 13.3.5 of the Energy Decree, access holders are liable for a fine. The fine is established at EUR 100 per missing GEC and EUR 38 per missing CHP certificate and functions as a cap for the transaction prices on the certificates market. The fine also constitutes an incentive for access holders to purchase certificates and ensures therefore that there is a demand for those certificates. (64) In this respect, Belgium argues that the green certificates simply ascertain the nature of RES electricity and the CHP certificates are the proof of primary energy savings and could not be sold or put for auction. However, the Commission notes that GECs and CHP certificates are commodities with a value largely determined by the State. In particular, the Flemish government has fixed the minimum and maximum value of the certificates, as explained at recitals (26), (30) and (33) above. Thus, they do not only certify the nature of a certain type of electricity as guarantees of origin pursuant to Directives 2001/77/EC and 2009/28/EC. By contrast to guarantees of origin, the State has created here a quota obligation for GECs and CHP certificates whose non-fulfilment is sanctioned by a fine. Therefore, in line with the conclusions of the Court of Justice in the NOx case, the Commission notes that Belgium could have designed the system differently so that certificates are sold or auctioned. (65) The Commission considers that the above element alone suffices to conclude that the GECs and CHP certificates schemes involve State aid, and Belgium has been aware of this circumstance at least since 8 September 2011 when the judgment in the case C-279/08 P – Commission v Netherlands was rendered. 3.1.1.2. The financing of the GECs and CHP certificates schemes and the general control of the State over the financial flow between the parties (66) The concept of "intervention through State resources" is intended to cover not only advantages which are granted directly by the State but also "those granted through a public or private body appointed or established by that State to 31 Judgment of 8 September 2011, Commission v Netherlands, C-279/08 P, EU:C:2011:551, paragraph 107.
  18. 18. 18 administer the aid"32 . In this sense, Article 107(1) TFEU covers all the financial means by which the public authorities may actually support undertakings, irrespective of whether or not those means are permanent assets of the public sector33 . (67) For the measure at hand, the State establishes in detail throughout legally binding rules how the demand and supply of GECs and CHP certificates is formed, how the market for certificates is organised, who can participate in it and how the financial flows are organised. The costs from the acquisition of GECs and CHP certificates by access holders can be passed on to end consumers within the price of electricity sold (see recital (34) above). (68) Therefore, the Commission considers that, even if there is no mandatory obligation for access holders to pass on costs to end consumers, in practice this is the case, as it is not forbidden to do so. (69) Although the certificates and, thus, the revenues obtained by the RES producers and high-efficiency CHP are ultimately financed by end consumers, the mere fact that the advantage is not financed directly from the State budget is not sufficient to exclude that State resources are involved34 . It results from the case-law of the Court that it is not necessary to establish in every case that there has been a transfer of money from the budget or from a public entity35 . (70) The relevant criterion in order to assess whether the resources are public, whatever their initial origin, is that of the degree of intervention of the public authority in the definition of the measures in question and their methods of financing36 . Hence, the mere fact that a subsidy scheme benefitting certain economic operators in a given sector is wholly or partially financed by contributions imposed by the public authority and levied on certain undertakings is not sufficient to take away from that scheme its status of aid granted by the State37 . Equally, the fact that the resources would at no moment be the property of the State does not prevent that the resources might constitute State resources, if 32 Judgment of 22 March 1977, Steinike & Weinlig v Germany, C-78/76, EU:C:1977:52, paragraph 21; Judgment of 13 March 2001, PreussenElektra, C-379/98, EU:C:2001:160, paragraph 58; Judgment of 30 May 2013, Doux Elevage and Coopérative agricole UKL-ARREE, C-677/11, EU:C:2013:348, paragraph 26; Judgment of 19 December 2013, Vent de Colère and others, C-262/12, EU:C:2013:851, paragraph 20; Judgment of 17 March 1993, Sloman Neptun, joined cases C-72/91 and C-73/91, EU:C:1993:97, paragraph 19. 33 Judgment of 30 May 2013, Doux Elevage and Coopérative agricole UKL-ARREE, C-677/11, EU:C:2013:348, paragraph 34; Judgment of 27 September 2012, France v Commission, T-139/09, EU:T:2012:496, paragraph 36; Judgment of 19 December 2013, Vent de Colère and others, C-262/12, EU:C:2013:851, paragraph 21. 34 Judgment of 12 December 1996, Air France v Commission, T-358/94, EU:T:1996:194, paragraphs 63 to 65. 35 Judgment of 30 May 2013, Doux Elevage and Coopérative agricole UKL-ARREE, C-677/11, EU:C:2013:348, paragraph 34; Judgment of 27 September 2012, France v Commission, T-139/09, EU:T:2012:496, paragraph 36; Judgment of 19 March 2013, Bouygues Telecom v Commission, joined cases C-399/10 P and C-401/10 P, EU:C:2013:175, paragraph 100; Judgment of 19 December 2013, Vent de Colère and others, C-262/12, EU:C:2013:851, paragraph 19. 36 Judgment of 27 September 2012, France v Commission, T-139/09, EU:T:2012:496, paragraphs 63 and 64. 37 Judgment of 27 September 2012, France v Commission, T-139/09, EU:T:2012:496, paragraph 61.
  19. 19. 19 they are under the control of the State38 .The Court found State resources in case of funds financed through compulsory contributions imposed by State legislation and they were managed and apportioned in accordance with the provisions of that legislation39 . (71) This has been confirmed by the Court in the Vent de Colère case40 where the Court has also ruled that a mechanism for offsetting in full the additional costs imposed on undertakings because of an obligation to purchase wind-generated electricity at a price higher than the market price that is financed by all final consumers of electricity in the national territory, constitutes an intervention through State resources. (72) In the light of those principles, the Commission has examined whether the financing of GECs and CHP certificates and the revenues of the RES producers and high-efficiency CHP stemming from their sales, involves State resources. (73) In the case of the GECs and CHP certificates schemes although the financial flows take place between private parties (access holders and RES producers or high-efficiency CHP) they have to be considered as involving State resources because the State controls and manages them. (74) Moreover, the VREG is entrusted with the legal task to collect the fines of access holders that fail to provide, at the end of a given year, an amount of certificates corresponding to their quota obligation (see recital (25) above). (75) The DSOs are by law entrusted with the task to act as a “buyer of last resort”, in that they have to buy any amount of certificates offered to them by market parties at a legally set minimum price. They can subsequently either try to sell these certificates again on the market if there would be an upsurge in demand for certificates, or simply pass on the costs incurred in the purchase to consumers in the grid tariffs. Ultimately, the Flemish government does intervene, as explained at recital (38), and oblige them to transfer a certain amount of certificates to the VREG in exchange for compensation. All of the above attest to the fact that the DSOs act as agents of the State in managing the flows of money within the GECs and CHP certificates schemes. (76) As described in paragraphs (17) to (33) above, every part of the GECs scheme and the CHP certificates scheme is designed by the State through the Energy Decree and the Energy Decision. (77) It follows from the above that the GECs and CHP certificates schemes and their financing involve State resources. The Commission observes in particular that the State can control, direct and influence the administration of GECs and CHP certificates and their financing. The State has defined to whom the advantage is to 38 Judgment of 12 December 1996, Air France v Commission, T-358/94, EU:T:1996:194, paragraphs 65 to 67; Judgment of 16 May 2002, France v Commission, C-482/99, EU:C:2002:294, paragraph 37; Judgment of 30 May 2013, Doux Elevage and Coopérative agricole UKL-ARREE, C-677/11, EU:C:2013:348, paragraph 35. 39 Judgment of 2 July 1974, Italy v Commission, C-173/73, EU:C:1974:71, paragraph 16; Judgment of 17 July 2008, Essent Netwerk Noord and Others, C-206/06, EU:C:2008:413, point 66. 40 Judgment of 19 December 2013, Vent de Colère and others, C-262/12, EU:C:2013:851.
  20. 20. 20 be granted, the eligibility criteria and the level of support, but it has also influenced the financial resources to cover the costs of the support. 3.1.2. Imputability (78) The GECs and CHP certificates schemes have been established and are regulated by way of legislative acts (see recital (15) above); they are therefore imputable to the State. 3.1.3. Advantage favouring certain undertakings or the production of certain goods (79) Under the GECs and CHP certificates schemes, the Flemish authorities are granting for free GECs to RES producers and CHP certificates to high-efficiency CHP. At the same time, the Flemish authorities create a market for such producers to sell the certificates. The RES producers and the high-efficiency CHP receive an advantage, as they get certificates for free and are able to sell them on the certificates market obtaining additional revenues. The support is aimed to favour the production of electricity from renewable energy sources as compared to electricity produced from other sources and to reduce primary energy consumption through the use of high-efficiency CHP installations. (80) The GECs and CHP certificates schemes therefore grant an advantage favouring only certain undertakings producing electricity. 3.1.4. Distortion of competition and effect on trade between Member States (81) The GECs and CHP certificates schemes provide a selective advantage to producers of renewable electricity and to high-efficiency CHP. These producers have to sell their electricity in the market which is a liberalised electricity market where cross-border trade takes place. (82) The GECs and CHP certificates schemes therefore provide a selective advantage to producers of renewable electricity and to high-efficiency CHP that threatens to distort competition and is likely to affect trade between Member States. 3.1.5. Conclusion on the presence of State aid (83) Taking the above into consideration, the Commission concludes that the GECs and CHP certificates schemes involves State aid within the meaning of Article 107(1) TFEU. 3.2. Compatibility of the aid (84) The Commission notes that the notified GECs and CHP certificates schemes aim at promoting the generation of electricity from renewable energy sources and primary energy savings. Consequently, the notified schemes fall within the scope of the Guidelines on State aid for environmental protection and energy 2014- 2020. The Commission has therefore assessed the GECs scheme on the basis of the general compatibility provisions of the EEAG (set out in its section 3.2) and the specific compatibility criteria for operating aid granted by way of certificates for energy from renewable sources (section 3.3.2.4 of the EEAG). The CHP certificates scheme is assessed on the basis of the general compatibility provisions
  21. 21. 21 of the EEAG (set out in its section 3.2) and the specific compatibility criteria for energy efficiency measures (section 3.4 of the EEAG). 3.2.1. Compatibility of the GECs scheme 3.2.1.1. Objective of common interest (85) The aim of the aid measure is to help Belgium to achieve the binding target of 13% share of renewable energy in gross final consumption of energy by 2020 set by the Directive 2009/28/EC (see also recital (17) above). The Commission therefore considers that, in line with paragraph (31) of the EEAG, the notified scheme is clearly aimed at an objective of common interest in accordance with Article 107(3) TFEU. 3.2.1.2. Need for State aid and appropriate instrument (86) In paragraph (107) of the EEAG, the Commission acknowledges that "under certain conditions State aid can be an appropriate instrument to contribute to the achievement of the EU objectives and related national targets". For this aid scheme, Belgium showed that the system is necessary to ensure the viability of the RES producers, given that the costs of generating electricity from RES are higher than the electricity market price. Belgium refers in particular to the last "OT-report"41 from June 2017 of the Flemish Energy Agency showing that generation costs for producing electricity from RES exceed the market price of electricity. Given the current electricity prices, RES installations would not generate enough revenues to cover their costs (see Tables 1 and 2 above). The green certificates are therefore a necessary incentive for beneficiaries to produce electricity from renewable energy sources. (87) According to paragraph (116) of the EEAG, in order to allow Member States to achieve their national energy target, the Commission presumes aid to energy from renewable sources to be appropriate and have limited distortive effects provided all other compatibility conditions are met. (88) Consequently, given the assessment of the other compatibility conditions (see sub-sections 3.2.1.3; 3.2.1.4; 3.2.1.5 and 3.2.3 below) the Commission considers that the GECs scheme is necessary and that it is an appropriate instrument to address the objective of common interest. 3.2.1.3. Incentive effect (89) In line with paragraph (49) of the EEAG, the incentive effect occurs if the aid induces the beneficiary to change his behaviour towards reaching the objective of common interest which it would not do without the aid. The Commission notes on the basis of the calculations submitted by Belgium that in the absence of aid electricity produced from renewable energy technologies will probably not be generated, as without the aid such installations would not be financially viable. 41 http://www2.vlaanderen.be/economie/energiesparen/milieuvriendelijke/monitoring_evaluatie/2017/20170 901Rapport_VEA_2017-Deel1-Berekeningen_OT_Bf_SD2018_Def-vs2.pdf.
  22. 22. 22 (90) Belgium confirmed that any party wishing to receive aid in relation to an eligible project has to submit a prior application to the Flemish Energy Agency. No aid can be paid prior to this application process being successfully completed. The Commission therefore considers that the GECs scheme complies with the obligation to use an application form for obtaining aid, set out in paragraph (51) of the EEAG. 3.2.1.4. Proportionality (91) According to paragraph (69) of the EEAG, environmental aid is considered to be proportionate if the aid amount per beneficiary is limited to the minimum needed to achieve the environmental protection or energy objective aimed for. (92) In line with paragraph (135) of the EEAG, the price of GECs is not fixed in advance but depends on market supply and demand. The notified GECs scheme is a State aid with market-based system elements. The beneficiaries sell their electricity on the market in the normal market way, subject to competitive pressure from other market participants. They receive GECs that they can sell in order to obtain additional revenues. The price of the GECs is not fixed in advance but is capped by the law which establishes a minimum price of GECs per technology and a maximum price (being the established price of the fine, see recitals (26) and (27) above). (93) As indicated in recital (86) above, Belgium provided evidence that the GECs scheme is necessary to ensure the viability of the renewable energy sources concerned. Belgium also explained that the GECs scheme does not dissuade RES producers from becoming more competitive as it is a market based mechanism which do not protect the beneficiaries from market risks. The incentive for investors to develop more efficient projects is therefore preserved. The Commission notes that the reforms introduced by the Flemish authorities (transfer obligation from DSOs to VREG, banding factor and Gr factor) aim at improving the functioning of the GECs market. (94) Belgium also demonstrated that the beneficiaries would not receive overcompensation. As shown in Tables 1 and 2 above, the current prices of the certificates, added to the revenues from electricity sales on the market, do not exceed the LCOE for each type of supported installations. As explained in recital (19) above, the Flemish authorities can modulate the level of support through the adjustment of the banding factor in order to take into account the evolution of prices and costs and therefore ensure the absence of overcompensation over time. (95) Given the above, the Commission considers that conditions set out in paragraph (136) of the EEAG are fulfilled. (96) Belgium indicated that all technologies supported under the GECs scheme would receive one GEC per one MWh of electricity produced from renewable energy sources at a guaranteed minimum price of EUR 93. The number of GECs is then modulated via the application of the banding factor, depending on the technology supported. Belgium indicated that this differentiation is aimed at achieving diversification that is necessary to attain the EU 2020 target as, given dense urban development and poor climatic conditions; the Flemish region offers only limited potential for renewable energy large-scale projects. It is therefore also important
  23. 23. 23 for small-scale projects to be carried out as well and to allow support to various types of renewable technologies. The differentiation implemented through the banding factor is made so as to ensure that there will be no overcompensation as explained in recital (94) above. (97) On the basis of the explanations provided by Belgium, the Commission considers that the differentiated level of support between technologies is in line with the requirements of paragraph (126) of the EEAG as it is justified by the need to achieve diversification and therefore the differentiation is justified in compliance with paragraph (137) of the EEAG. (98) Paragraph (137) of the EEAG further states that for certificates aid systems, the conditions set out in paragraph (124) and (125) should apply when technically possible, and that any investment aid previously received must be deducted from the operating aid. (99) The RES producers sell their electricity on the electricity market and the price they receive for the GECs comes in addition to the market electricity price. The support received by RES producers through the GECs certificates scheme can therefore be considered as a premium in addition to the market price within the meaning of paragraph (124(a)) of the EEAG. (100) Belgium indicated that RES producers can only sell their electricity to suppliers who possess a supply permit. Those suppliers are all subject to balancing responsibilities, as required under paragraph (124(b)) of the EEAG. (101) Belgium will also put into force the following mechanism to avoid creating incentives to produce when electricity prices are negative: no support is granted during (i) each quarter hour with positive imbalance prices below -20 EUR/MWh (the negative imbalance event) or (ii) periods where the Belpex day-ahead prices are negative (i.e. below 0 EUR/MWh) for at least 6 consecutive hours (the negative day ahead event) provided that periods without support caused solely by negative imbalance events shall be limited to 288 quarters hours per calendar year, reduced by the total duration of the negative day ahead event in the same calendar year (the negative price commitment). Periods without support caused by negative day-ahead events are not capped. The Energy Decree is currently going through the legislative process of being amended aimed at implementing the negative price commitment. (102) As Belgium already indicated for the federal regime governing renewable energy certificates (Commission decision SA.45867 (2016/N)42 ), the measure will provide an incentive to RES producers to actively participate in the balancing market. Further to the explanations provided by Belgium (see recitals (89) to (92) of the SA.45867 decision), the Commission considered that the combination of the imbalance and day-ahead market mechanisms are able to ensure that there is no incentive for the beneficiaries of the aid measure to produce during negative 42 Commission decision of 8 December 2016 in State aid case SA.45867 (2016/N) – Belgium – The Belgian federal regime governing renewable energy certificates and aid to the Rentel and Norther wind farm projects, OJ C 36, 03.02.2017, p.1.
  24. 24. 24 pricing events. Therefore, the conditions of paragraph (124(c)) of the EEAG are met (see recital (93) of the SA.45867 decision). (103) Belgium indicated that it would apply the conditions set out in paragraph (124) of the EEAG also to installations with an installed electricity capacity of less than 500 kW and to wind energy installations with an installed electricity capacity of less than 3 MW or three generation units. Therefore, provisions set out in paragraph (125) of the EEAG are not applicable to the GECs scheme. (104) In line with the requirement set out in paragraph (137) of the EEAG, Belgium confirmed that any investment aid previously received is deducted from the operating aid received by beneficiaries. (105) Based on the above, the Commission considers that paragraph (137) of the EEAG is complied with. 3.2.1.5. Distortion of competition and balancing test (106) According to paragraph (90) of the EEAG, the Commission considers that aid for environmental purposes will by its very nature tend to favour environmentally friendly products and technologies at the expense of other, more polluting ones. Moreover, the effect of the aid will in principle not be viewed as an undue distortion of competition since it is inherently linked to its very objective. (107) According to paragraph (116) of the EEAG, the Commission presumes aid to energy from renewable sources to have limited distortive effects provided all other compatibility conditions are met. The Commission considers that the aid to RES producers under assessment does not have undue distortive effects on competition and trade because the applicable conditions laid out in Sections 3.2 and 3.3.2.4 of the EEAG are fulfilled, as discussed above. (108) Consequently, the Commission concludes that the distortion of competition caused by the GECs scheme under assessment is limited. 3.2.2. Compatibility of the CHP certificates scheme 3.2.2.1. Objective of common interest (109) The aim of the aid measure is to help achieving the Union target to reduce its primary energy consumption, and to reduce greenhouse gas emissions as indicated in recital (31) above. The Commission therefore considers that, in line with paragraph (31) of the EEAG, the notified scheme is clearly aimed at an objective of common interest in accordance with Article 107(3) TFEU. (110) As indicated in recital (42) above, Belgium confirmed that beneficiaries of the notified scheme are high-efficiency CHP installations, in line with paragraph (139) of the EEAG.
  25. 25. 25 (111) In line with paragraph (140) of the EEAG, Belgium confirmed that the waste hierarchy principles set out in Directive 2008/98/EC43 on waste are not circumvented by support granted to high-efficiency CHP installations incinerating waste. 3.2.2.2. Need for State aid and appropriate instrument (112) Pursuant to paragraph (142) of the EEAG, energy-efficiency measures target negative externalities as referred in paragraph (35) of the EEAG by creating individual incentives to attain environmental targets for energy-efficiency and for the reduction of greenhouse gas emissions. (113) For this aid scheme, Belgium showed that the system is necessary to ensure the viability of the high-efficiency CHP, given the costs of generating electricity and heat from cogeneration installations and the market prices. Belgium refers in particular to the last "OT-report"44 from June 2017 of the Flemish Energy Agency showing that costs incurred by cogeneration installations are still higher than the revenues that can be expected from the electricity and heat markets. Given the current electricity and heat prices, high-efficiency cogeneration installations would not generate enough revenues to cover their costs (see Tables 2, 3 and 4 above). (114) Pursuant to paragraph (40) of the EEAG, the proposed aid measure must be an appropriate instrument to address the policy objective concerned. Paragraph (145) of the EEAG states that State aid may be considered an appropriate instrument to finance energy efficiency measures independently of the form in which it is granted. (115) Therefore, the measure can be considered to be appropriate. 3.2.2.3. Incentive effect, proportionality, distortion of competition and balancing test (116) Given the similarities between the GECs scheme and the CHP certificates scheme and given that the criteria set out in the EEAG for operating aid granted to energy from renewable energy sources also apply to aid to high-efficiency CHP (as paragraph (151) of the EEAG refers to conditions set out in sections 3.3.2.1 and 3.3.2.4 of the EEAG), the elements developed in sub-sections 3.3.1.3 (incentive effect), 3.3.1.4 (proportionality) and 3.3.1.5 (distortion of competition and balancing test) are also valid for the CHP certificates scheme. (117) The Commission therefore considers that the CHP certificates scheme has an incentive effect, is proportionate and that its potential distortion of competition is limited. 43 Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ L 312, 22.11.2008, p.3). 44 See footnote 41.
  26. 26. 26 3.2.3. Transparency (118) According to paragraph (104) of the EEAG, Member States have the obligation to ensure the transparency of the aid granted, by publishing certain information on a comprehensive State aid website. Belgium declared that the transparency requirements set out in paragraphs (104)-(106) of the EEAG will be complied with. 3.3. Authentic language (119) As set out in recital (3) above, Belgium has waived its right to have the decision adopted and notified in Dutch and French. The authentic language of this decision will therefore be English. 4. CONCLUSION The Commission has accordingly decided not to raise objections to the aid granted to the green energy certificates and combined heat and power certificates schemes on the grounds that the aid is compatible with the internal market pursuant to Article 107(3)(c) of the Treaty on the Functioning of the European Union. If this letter contains confidential information which should not be disclosed to third parties, please inform the Commission within fifteen working days of the date of receipt. If the Commission does not receive a reasoned request by that deadline, you will be deemed to agree to the disclosure to third parties and to the publication of the full text of the letter in the authentic language on the Internet site: http://ec.europa.eu/competition/elojade/isef/index.cfm. Your request should be sent electronically to the following address: European Commission, Directorate-General Competition State Aid Greffe B-1049 Brussels Stateaidgreffe@ec.europa.eu Yours faithfully For the Commission Margrethe VESTAGER Member of the Commission

×