Industry SectorsEnergy/MiningEU Investigates State Aid to Power Companies

EU Investigates State Aid to Power Companies

The European Union (EU) is to review government subsidies used to help power companies avoid electricity blackouts; the latest in a series of investigations launched by the bloc’s combative new competition watchdog.

The latest inquiry follows EU competition commissioner Margarethe Vestager’s announcement that she had opened high-profile anti-trust cases against US Internet firm Google and Russian gas giant Gazprom.

The review will consider whether EU state aid rules are breached by so-called capacity mechanisms either used or under consideration in Belgium, Croatia, Denmark, France, Germany, Ireland, Italy, Poland, Portugal, Spain and Sweden.

Capacity mechanisms ensure that sufficient electricity supplies are available to meet demand during peak times.

“This sector inquiry sends a clear signal to member states to respect EU state aid rules when implementing capacity mechanisms, and contributes to the (European) Commission’s goal to build a true energy union in Europe,” said Vestager.

She added that although EU governments had to protect against blackouts, investments should “not unduly favour particular producers or technologies, or create obstacles to trade across national borders.”

Vestager suggested that it might be more efficient in some cases to invest in improving electricity connections between EU countries instead of building more power generating capacity.

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