Fortum's response to the consultation on the draft energy and climate state aid guideline

Fortum response to the consultation (HT-359) on the draft energy and environment state aid guideline.

​Overall we regard the draft environmental and energy guidelines as a positive development. These guidelines do not guarantee aid for any activity automatically, but constitute a binding guidance to those countries that wish to grant State aid for the energy and environment sectors.

We believe that these guidelines, that will come into effect in mid-year, will improve the functioning of the internal energy market and increase cost-efficiency as a result of more coordinated and market-based subsidies. Hence, these rules will constitute an important tool to ensure consistency across the EU.

However, it seems that plenty of room has been left for member states to exempt from the guideline principles. For example, we would welcome stronger wording on technology neutrality regarding both renewable support schemes and capacity mechanism.

Cross-border cooperation to develop the internal market for renewable energy

Also, in order to develop the internal market for renewable energy we think that there should be a stronger requirement to open national subsidy schemes to participation of operators from other EEA countries. Given that high energy prices are an increasing concern and renewable support systems play a significant role in the cost development, the member states should be encouraged to do decarbonisation in the most cost-efficient way possible. Broader cross-border cooperation would work towards that direction.

Further specifications and details are required

The guidelines make a distinction between renewable energy technologies that are already on the market and technologies which have a small market share. Since the proposed guidelines state, that aid rules can differ between technologies, it is necessary to define how the different technologies are categorized in this context.

It would have been good to have nuclear generation included in the scope of the guidelines. This way the possible criteria could have been discussed and assessed to get more clarity and transparency on the criteria what the Commission will use when considering possible nuclear state aid cases. Case by case assessment leaves uncertainty on the extent of political consideration that can be used in those cases.  

In principle, energy networks, be it transmission, distribution or district heating and cooling (DHC) networks, should be financed by the market and through network tariffs, and smart grid projects also through aid for research and development. Since the State aid guidelines already include Europe's priority projects, as well as distribution networks, we consider it important that in the name of fairness also heating and cooling networks, by definition, should be included in the state aid guidelines.

How the State aid guidelines enter into force and application of the regulations, particularly with regard to the existing aid mechanisms need to be specified.