European Union working through the costs associated with renewable energy introduction

EU mulls aid to industries to cope with cost of renewable energy SMH, March 18, 2014 The European Union is considering allowing state aid to 62 energy-intensive industries including aluminium- and petroleum-product manufacturers to help with the cost of boosting renewable energy, a draft EU document showed.

The European Commission, the EU regulatory arm, will approve support in the form of reductions in environmental taxes if the beneficiaries cover at least 20 per cent of the additional costs, according to state-aid guidelines for 2014-2020 obtained by Bloomberg News.

The document, to be adopted by the commission on April 9, will define state-support rules to help spur renewables as nations including Germany call for permission to use tools that would shield industry from rising power bills during the EU shift to a low-carbon economy.

“The aid should be limited to sectors that are exposed to a risk to their competitive position due to the burden resulting from the funding of support to energy from renewable sources as a function of their electro-intensity and their exposure to international trade,” the commission said in the draft document.

Governments will also be allowed to extend state aid to sectors that have electricity intensity, or power costs as a proportion of overall costs, of at least 25 per cent and trade intensity of at least 4 per cent, according to the draft guidelines. The aid could be granted in the form of a reduction from charges or as a lump sum paid to the beneficiary in the year when the costs are incurred or in the following year, the commission says.

Levies, taxes……..

While Chancellor Angela Merkel has made reforming aid to clean energy the top priority of her third-term government, she said producers exposed to international competition should keep lower levies. Every fourth job in Germany depends on exports, according to the Economy Ministry.

The draft EU guidelines also specify that renewable-energy producers can benefit from operating aid if they sell power directly in the market. As of 2015, aid under new measures and schemes would be granted as a premium in addition to the market price. Support will not be available if market prices are negative, the commission said in the document.

“In a transitional phase covering the years 2015 and 2016, aid for at least 5 per cent of the planned new electricity capacity from renewable-energy sources is granted in a genuinely competitive bidding process on the basis of clear, transparent and non-discriminatory criteria,” it said. http://www.smh.com.au/business/carbon-economy/eu-mulls-aid-to-industries-to-cope-with-cost-of-renewable-energy-20140318-34yxh.html