CJEU annuled Commission decision that preferencial prices for Renewable Energy (feed-in tariff) constitute state aid

CJEU has ruled on a long waited case, in which the plaintiff Germany successfuly defended its thesis that preferencial price for purchasing renewable sourses energy does not constitute state aid, when they are not payd by budget means and the state does not have effective control over the incoming funds. This is a landmark case, as in essence the bulgarian support scheme "preferencial prices", introduced in Bulgaria and notified with the National Plan for Development of Renewable Energy Sourses is not a state aid as the bulgarian state and the Commission claimed. Bulgaria has esencially stated that:

"Разходите, свързани с тази схема не се покриват от бюджета. Те се включват в цената за пренос на електрическа енергия, като по този начин се заплащат от всички потребители, пропорционално на тяхното потребление."

 The court decision essencialy nulls Notification for State Aid SA.44840 (2016/NN) with №04.080.2016 C(2016) 5205 final 

Case C-405/16 revokes the claim for double financing in cases where the "preferencial price" support scheme is involved. Serious corrections in the Bulgarian legislature are to be expected, as well as a new notification of the Bulgarian Renewable Energy Law.

Some of the highlights of the Case are as follows:

On the one hand, the EEG surcharge cannot be assimilated to a levy since the EEG 2012 does not require suppliers to final customers to pass on the amounts paid in respect of the EEG surcharge to those customers. The fact that ‘in practice’ the financial burden resulting from the EEG surcharge was passed on to the final customers is not sufficient in that regard.

On the other hand, the General Court failed to establish that the State held a power of disposal over the funds generated by the EEG surcharge or even that it exercised public control over the TSOs responsible for managing those funds.

The Court of Justice finds in particular that the fact that the funds from the EEG surcharge are allocated exclusively to the financing of the support and compensation schemes, by virtue of the provisions of the EEG 2012, tends rather to show that the State was specifically not entitled to dispose of those funds, that it is say to decide on a different allocation.

Moreover, while the factors accepted by the General Court permit the conclusion that the public authorities monitor the proper implementation of the EEG 2012, they cannot, by contrast, permit the conclusion that there is public control over the funds generated by the EEG surcharge.

Full text here

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