The European Commission said on Wednesday that the EC has approved
under EU State aid rules electricity capacity mechanisms in Belgium,
France, Germany, Greece, Italy, and Poland.
The Commission said in a press release that the EC found that the
measures will contribute to ensuring the security of supply whilst
preserving competition in the Single Market.
"Capacity mechanisms can help to safeguard the security of
electricity supply, but they must be designed to avoid distortions of
competition in energy markets,” Competition Policy Commissioner
Margrethe Vestager said.
"I am glad that our close cooperation with national authorities has
enabled us to approve well-designed capacity mechanisms in six EU
countries. They will foster competition among all potential capacity
providers to the benefit of consumers and our European energy market,”
he added.
Capacity mechanisms have the important objective of ensuring the
security of electricity supply. But if they are not well designed they
may cause higher electricity prices for consumers, give undue advantages
to certain energy operators or hinder electricity flows across EU
borders, the Commission said, explaining this is why the EC has, in
close cooperation with the relevant national authorities, assessed six
mechanisms in Belgium, France, Germany, Greece, Italy, and Poland to
ensure that they meet strict criteria under EU state aid rules,
particularly pertaining to the Commission’s 2014 Guidelines on State Aid
for Environmental Protection and Energy.
In this context, the Commission said the EC has also taken into
account insights from its 2016 State aid sector inquiry on capacity
mechanisms. The six capacity mechanisms approved today concern more than
half of the EU population. They cover a range of different types of
mechanism that address the specific need in each Member State.
In the cases of Belgium and Germany, the Commission has authorised
the creation of strategic reserves. These reserves keep certain
generation capacities outside the electricity market for only in
emergency situations. In Italy and Poland, the Commission has authorised
market-wide capacity mechanisms, according to the Commission. These can
be necessary where electricity markets face structural security of
supply problems.
The Commission has authorised capacity mechanisms for France and
Germany, specifically promoting demand response. Demand response schemes
pay customers to reduce their electricity consumption in hours when
electricity is scarce.
The advantage of such schemes is that demand response operators may
be able to react more quickly than electricity generators and are
generally more environmentally friendly, the Commission said, adding
that Wednesday’s decisions complement the Commission’s Energy Union
Strategy to deliver secure, sustainable and competitive energy in
Europe.
https://www.neweurope.eu/article/eu-approves-mechanisms-electricity-supply-belgium-france-germany-greece-italy-poland/